<PAGE>
As filed with the Securities and Exchange Commission on May 10, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
ALEXION PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3648318
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
25 Science Park
New Haven, CT 06511
(203) 776-1790
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
------------------
LEONARD BELL, M.D.
ALEXION PHARMACEUTICALS, INC.
25 SCIENCE PARK
NEW HAVEN, CT 06511
(203) 776-1790
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
------------------
Copies of all communications, including all communications sent to the agent for
service, should be sent to:
MERRILL M. KRAINES, ESQ.
LAWRENCE A. SPECTOR, ESQ.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plan, please check the following
box: / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
Title of Each Class Amount To Be Proposed Maximum Price Proposed Maximum Amount of
of Securities Registered Per Unit Aggregate Offering Price Registration Fee(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5 3/4% Convertible Senior
Subordinated Notes due 2007 $120,000,000 100% $120,000,000 $31,680.00
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.0001 par value
per share 1,127,555 shares (2) N/A N/A N/A
==================================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(i) there is no filing fee with respect to the shares
of Common Stock issuable upon conversion of the Notes because no
additional consideration will be received in connection with the exercise
of the conversion privilege.
(2) Plus such additional indeterminate number of shares as may become issuable
upon conversion of the Notes being registered hereunder by means of
adjustment of the conversion price.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and we are not soliciting offers to buy these
securities, in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 10, 2000
PROSPECTUS
[ALEXION LOGO]
$120,000,000 5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2007
1,127,555 SHARES OF COMMON STOCK
The notes and the shares may be offered from time to time by the selling
securityholders (and their donees and pledgees) in negotiated transactions or
otherwise, at market prices prevailing at the time of sale or at negotiated
prices. See "Plan of Distribution." Holders may convert the notes into our
common stock at any time before March 15, 2007, at a conversion price of
$106.425 per share, subject to adjustment in specified events. We will pay
interest on the notes each March 15 and September 15. The first interest payment
will be made on September 15, 2000.
We may redeem some or all of the notes on or after March 20, 2003 at the
redemption prices listed in this prospectus, plus accrued interest. You may
require us to repurchase your notes upon a repurchase event in cash or, at our
option, common stock, at 105% of the principal amount of the notes, plus accrued
interest.
Our common stock is listed on The Nasdaq National Market under the symbol
"ALXN." On May 9, 2000, the reported last sale price of our common stock on The
Nasdaq National Market was $43 63/64 per share.
Pursuant to a registration rights agreement we have agreed to file a shelf
registration statement, of which this prospectus is a part, covering resales of
the notes and common stock issuable upon conversion of the notes. If we fail to
comply with our obligations under the registration rights agreement we will have
to pay liquidated damages.
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INVESTING IN THESE NOTES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 8.
May , 2000
<PAGE>
IN MAKING YOUR INVESTMENT DECISION, YOU SHOULD RELY ONLY ON THE INFORMATION
CONTAINED IN THIS PROSPECTUS. WE HAVE NOT, AND THE SELLING SECURITYHOLDERS HAVE
NOT, AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH ANY OTHER INFORMATION. IF
ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT
RELY ON IT. WE ARE NOT, AND THE SELLING SECURITYHOLDERS ARE NOT, MAKING AN OFFER
TO SELL THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT
PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS
IS ACCURATE AS OF THE DATE ON THE FRONT COVER OF THIS PROSPECTUS ONLY. OUR
BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE
CHANGED SINCE THAT DATE. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE ON THE COVER
OF THIS PROSPECTUS.
------------------
TABLE OF CONTENTS
PAGE PAGE
---- ----
- --------------------------------------- ---------------------------------------
Summary...............................2 United States Federal Income Tax
Risk Factors..........................8 Consequences.......................37
Use of Proceeds......................21 Plan of Distribution.................44
Description of Notes.................23 Legal Matters........................46
Ratio of Earnings to Fixed Charges...36 Experts..............................46
Where You Can Find More Information..46
------------------
This prospectus has been prepared based on information provided by us and by
other sources that we believe are reliable. This prospectus summarizes certain
documents and other information in a manner we believe to be accurate but we
refer you to the actual documents for a more complete understanding of what we
discuss in this prospectus. In making a decision to invest in the notes or
common stock, you must rely on your own examination of our company and the terms
of this offering, the notes, including the merits and risks involved.
Neither we nor the selling securityholders are making any representation to you
regarding the legality of an investment in the notes by you under any legal
investment or similar laws or regulations. You should not consider any
information in this prospectus to be legal, business or tax advice. You should
consult your own attorney, business advisor and tax advisor for legal, business
and tax advice regarding an investment in the notes or common stock.
You should contact us or the selling securityholders with any questions about
this offering or if you require additional information to verify the information
contained in this prospectus.
Each prospective purchaser of the notes must comply with all applicable laws and
regulations in force in any jurisdiction in which it purchases, offers or sells
the notes or possesses or distributes this prospectus and must obtain any
consent, approval or permission required by it for the purchase, offer or sale
by it of the notes under the laws and regulations in force in any jurisdiction
to which it is subject or in which it makes such purchases, offers or sales.
Neither we nor the selling securityholders shall have any responsibility
therefor.
i
<PAGE>
SUMMARY
THIS SUMMARY PROVIDES AN OVERVIEW OF SELECTED INFORMATION AND DOES NOT CONTAIN
ALL THE INFORMATION YOU SHOULD CONSIDER. YOU SHOULD READ THE ENTIRE PROSPECTUS,
INCLUDING THE SECTION ENTITLED "RISK FACTORS," CAREFULLY BEFORE MAKING AN
INVESTMENT DECISION. WHEN USED IN THIS PROSPECTUS, UNLESS OTHERWISE INDICATED,
THE TERMS "WE," "OUR," AND "US" REFER TO ALEXION AND ITS SUBSIDIARY.
ALEXION
We are engaged in the development of products for the treatment of
cardiovascular, autoimmune and neurologic diseases caused by undesired effects
of the human immune system. Our product development programs are based on
proprietary technologies which are designed to block selected components of the
human immune system in order to reduce undesired inflammation while allowing
other beneficial aspects of the immune system to remain functional. We are
currently conducting Phase II clinical trials of our two lead product
candidates, 5G1.1-SC for the treatment of acute inflammation caused by
cardiopulmonary bypass surgery and acute myocardial infarction and 5G1.1 for the
chronic treatment of the autoimmune diseases rheumatoid arthritis and membranous
nephritis.
5G1.1-SC and 5G1.1 are C5 Complement Inhibitors designed to selectively block
the production of inflammation-causing proteins in a process of the human immune
system known as the complement cascade. We believe that selective suppression of
this immune response will provide a significant therapeutic advantage relative
to existing therapies.
In January 1999, we entered into a collaboration with Procter & Gamble
Pharmaceuticals Inc. to develop and commercialize 5G1.1-SC. Under this
collaboration, we intend to initially pursue the development of 5G1.1-SC for the
treatment of inflammation caused by cardiopulmonary bypass surgery, myocardial
infarction (heart attack) and angioplasty. Procter & Gamble has agreed to fund
all clinical development and manufacturing costs relating to 5G1.1-SC for these
indications. In addition, under this agreement, Procter & Gamble has agreed to
pay us up to $95 million in license, milestone and additional research and
development fees. We will also receive royalties on worldwide sales of 5G1.1-SC
for all indications. We share co-promotion rights with Procter & Gamble to sell,
market and distribute 5G1.1-SC in the United States, and have granted Procter &
Gamble the exclusive rights to sell, market and distribute 5G1.1-SC outside of
the United States.
In the initial Phase I/II and IIa clinical trials treating 35 cardiopulmonary
bypass patients, as compared to placebo, 5G1.1-SC:
- was safe and well tolerated in the study population; and
- produced statistically significant results in the following adverse
clinical effects of cardiopulmonary bypass surgery in the study
population:
- 40% less heart tissue damage;
- 80% less new cognitive deficits; and
- 400 ml. less blood loss.
In order to augment and extend previous findings regarding the safety and
efficacy of 5G1.1-SC, together with our partner Procter & Gamble, we:
- commenced in January 1999, a multi-center, double-blind, randomized,
placebo-controlled Phase IIb clinical trial in which we expect to
enroll 1,000 cardiopulmonary bypass patients; and
2
<PAGE>
- commenced in December 1999, two Phase II clinical trials with
approximately 1,000 patients each for the treatment of acute
myocardial infarction.
In 1998, the American Heart Association estimated that in the United States,
approximately 500,000 cardiopulmonary bypass operations were performed in 1996
and approximately 1.0 million people would have a heart attack in 1999.
We are currently developing 5G1.1 for the chronic treatment of autoimmune
diseases such as rheumatoid arthritis, and a kidney disease known as membranous
nephritis and are initiating clinical development in diseases such as psoriasis,
dermatomyositis and pemphigoid. In the initial Phase I/II clinical trial
treating rheumatoid arthritis patients and a Phase I clinical trial in lupus
patients, a single dose of 5G1.1:
- was safe and well tolerated in each study population as compared to
placebo;
- significantly reduced C-reactive protein, an objective measurement
of disease activity, in rheumatoid arthritis patients;
- demonstrated that 50% of rheumatoid arthritis patients receiving 8.0
mg/kg of 5G1.1 achieved an ACR20 score, a measure of clinical
benefit, as compared to 10% of placebo-treated patients;
- and resulted in significantly lower incidence of proteinuria, a
measure of kidney disease, in lupus patients as compared to placebo.
In order to augment and extend previous findings regarding the safety and
efficacy of 5G1.1, we commenced in August 1999:
- a multi-center, double-blind, randomized, placebo-controlled Phase
II clinical trial in which we expect to enroll 200 rheumatoid
arthritis patients; and
- a multi-center, double-blind, randomized, placebo-controlled Phase
II clinical trial in which we expect to enroll 150 membranous
nephritis patients.
It is estimated that more than 2.0 million people are currently affected by
rheumatoid arthritis in the United States. We estimate that there are
approximately 100,000 to 300,000 people afflicted with membranous nephritis in
the United States.
We are also developing a second type of anti-inflammatory drug, known as
Apogens. In contrast to our C5 Complement Inhibitors, Apogens are designed to
affect disease-causing T-cells. We are currently completing preclinical studies
of our first Apogen, known as MP4, targeting the treatment of patients with
multiple sclerosis.
In addition, we are developing methods of blocking the immune system which are
designed to permit the transplantation of cells from other species into humans,
known as xenotransplantation, that may be useful in treating several neurologic
diseases. Through a series of preclinical models, our scientists are currently
developing two xenotransplant product candidates, UniGraft-PD and UniGraft-SCI,
which are designed to permit the replacement of damaged human brain and other
neurologic cells with potentially genetically modified and proprietary porcine,
or pig, cells. Our UniGraft program is initially targeting the treatment of
patients with Parkinson's disease and patients with spinal cord injury.
In the normal course of our business from time to time we evaluate the potential
acquisition of other companies and technologies. We intend to continue to review
acquisition opportunities as they arise.
We were incorporated in Delaware in January 1992. Our principal executive
offices are located at 25 Science Park, New Haven, Connecticut 06511, and our
telephone number is (203) 776-1790.
3
<PAGE>
RECENT DEVELOPMENTS
CLINICAL STUDIES
In February 2000, we filed an Investigational New Drug Application with the FDA
to commence a Phase Ib pilot clinical study trial with 5G1.1 in patients with
dermatomyositis, a severe inflammatory muscle disorder.
In February 2000, the FDA designated our humanized monoclonal antibody C5
complement inhibitor 5G1.1 for the treatment of patients with the kidney disease
known as membranous glomerulonephritis as a "fast track" product eligible for
expedited development and FDA review. We began enrolling patients with
idiopathic membranous glomerulonephritis in a Phase II efficacy trial in 1999.
In March 2000, we announced preclinical results at the 5th World Congress on
Trauma, Shock, Inflammation and Sepsis in Munich, Germany that administration of
our anti-inflammatory C5 inhibitor substantially prevented intestinal and lung
damage associated with gastrointestinal ischemia. Further, in these preclinical
studies, our C5 inhibitor therapy also substantially prevented increases in
levels of cytokine TNF-alpha in the intestine associated with placebo therapy.
In March 2000, we also announced that the National Institutes of Health awarded
a grant of approximately $1.0 million to the University of Colorado Health
Sciences Center to fund a multi-center Phase II study of our C5 inhibitor,
5G1.1, in patients with lupus nephritis.
In March 2000, we and scientists from the Yale University School of Medicine,
presented results at the 49th Annual Scientific Session of the American College
of Cadiology from a collaborative study in eleven patients with acute coronary
syndrome and four patients with stable angina, indicating that patients with
acute coronary syndrome have severe inflammation including significant
production of injurious complement components in their coronary arteries.
In April 2000 we filed an Investigational New Drug Application with the FDA to
commence a Phase Ib pilot clinical trial with 5G1.1 in patients with pemphigoid,
a severe inflammatory skin disorder.
In April 2000, a scientific study demonstrating that animals deficient in the
complement component C5 are not susceptible to the onset of active arthritis was
published in the Journal of Immunology. The study resulted from preclinical
studies that are part of a collaboration between Alexion and Yale University
scientists.
In May 2000, we entered into a new lease for our headquarters and research and
development facility in Chesire, Connecticut. The lease is expected to commence
in August 2000 and has a term of ten years and six months. Our occupancy of
this lease, however, is contingent upon the timely departure of the current
tenant and subsequent additional work to be completed by the landlord. We
cannot be certain that either event will be completed in a timely manner. At
this site, we will lease and occupy a total of approximately 82,000 square
feet of space, which includes approximately 35,000 square feet of research
laboratories. In addition we will be required to pay a pro rata percentage of
real estate taxes and operating expenses. Our monthly rent is expected to
start at approximately $80,000. Our pilot manufacturing plant, which is used
for producing compounds for our current clinical trials, will remain in our
current facility encompassing approximately 10,000 square feet at 25 Science
Park, New Haven, Connecticut. We believe the new space and our pilot
manufacturing facility will be adequate for our activities.
COLLABORATIVE AGREEMENTS
In February 2000, we entered into a collaborative research and license agreement
with The Brigham and Women's Hospital, Inc. covering a newly discovered pathway
of complement mediated inflammation, the
4
<PAGE>
Lectin Pathway. Under such license agreement, we received exclusive worldwide
rights to these novel anti-inflammatory technologies and to associated
therapeutic products, including the already identified monoclonal antibodies to
Mannan Binding Lectin, a lectin that activates the complement system. These
products may have broad therapeutic applications in patients suffering from
atherosclerosis, unstable angina, strokes and other vascular disorders.
5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
UNAUDITED
SIX MONTHS ENDED
JANUARY 31, Fiscal Year Ended July 31,
-------------------- -------------------------------------------------------
CONSOLIDATED STATEMENT OF 2000 1999 1999 1998 1997 1996 1995
-------- -------- --------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS DATA:
Contract research revenues(1) $ 12,679 $ 425 $ 18,754 $ 5,037 $ 3,811 $ 2,640 $ 136
-------- -------- --------- -------- -------- ------- -------
Operating expenses:
Research and development 20,980 8,465 23,710 12,323 9,079 6,629 5,637
General and administrative 1,765 1,418 2,953 2,666 2,827 1,843 1,592
-------- -------- --------- -------- -------- ------- -------
Total operating expenses 22,745 9,883 26,663 14,989 11,906 8,472 7,229
-------- -------- --------- -------- -------- ------- -------
Operating loss (9,778) (9,458) (7,909) (9,952) (8,095) (5,832) (7,093)
Other income (expense), net 962 918 1,514 2,087 843 397 (29)
-------- -------- --------- -------- -------- ------- -------
Net loss (8,816) (8,540) (6,395) (7,865) (7,252) (5,435) (7,122)
Preferred stock dividends -- -- -- (900) -- -- --
-------- -------- --------- -------- -------- ------- -------
Net loss applicable to common
shareholders $ (8,816) $ (8,540) $ (6,395) $ (8,765) $ (7,252) $(5,435) $(7,122)
======== ======== ========= ======== ======== ======= =======
Net loss per common share,
basic and diluted(2) $ (0.69) $ (0.76) $ (0.57) $ (0.87) $ (.97) $ (1.02) $ (2.02)
======== ======== ========= ======== ======== ======= =======
Shares used in computing net
loss per common share 12,779 11,246 11,265 10,056 7,451 5,351 3,528
======== ======== ========= ======== ======== ======= =======
</TABLE>
<TABLE>
<CAPTION>
UNAUDITED
AS OF JANUARY 31, 2000
----------------------
Consolidated Balance Sheet Data: ACTUAL PRO FORMA(3)
-------- ------------
<S> <C> <C>
Cash, cash equivalents, and marketable securities...... $62,261 $178,350
Total current assets .................................. 71,560 187,649
Total assets .......................................... 80,330 200,330
Notes payable, less current position .................. 4,199 4,199
Convertible subordinated notes ........................ -- 120,000
Total stockholders' equity ............................ 71,132 71,132
</TABLE>
- --------------------
(1) Staff Accounting Bulletin No. 101 (SAB 101), Revenue Recognition, was
issued in December 1999. SAB 101 will require companies to recognize
certain upfront non-refundable fees over the life of the related
collaboration agreement when such fees are received in conjunction with
collaboration agreements which have multiple elements. We are required to
adopt this new accounting principle through a cumulative charge to
retained earnings, in accordance with the provisions of APB Opinion No.
20, no later than the first quarter of fiscal 2001. We believe that the
adoption of SAB 101 will have a material impact on our future operating
results as it applies to the $10,000,000 upfront non-refundable payment
received by us in connection with our collaboration with Procter & Gamble.
Our historical financial statements reflect this payment as revenue in the
year ended July 31, 1999. Based on guidance currently available, we will
be required to record the $10,000,000 fee as revenue over the future life,
as defined, of the collaboration agreement. As of the date of this
prospectus, we have not yet adopted this new accounting principle.
(2) We compute and present net loss per common share in accordance with
Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings Per
Share." There is no difference in basic and diluted net loss per common
share.
(3) Gives effect to the issuance of $120 million principal amount of these
notes sold by us in March 2000 to the initial purchasers under Rule 144A.
6
<PAGE>
THE OFFERING
SECURITIES OFFERED..... $120,000,000 aggregate principal amount of 5 3/4%
convertible subordinated notes due 2007 convertible
into an aggregate of 1,275,555 shares of our common
stock.
INTEREST............... 5 3/4% per annum on the principal amount, payable
semi- annually in arrears in cash on March 15 and
September 15 of each year, commencing September 15,
2000. The first interest payment will include interest
from March 8, 2000, the closing date.
MATURITY............... March 15, 2007.
CONVERSION............. The notes will be convertible into common stock of
Alexion at the option of the holder at any time prior
to redemption, repurchase or maturity at a conversion
price of $106.425 per share, subject to adjustment in
specified events. The conversion price is equivalent
to a conversion rate of approximately 9.396 shares per
$1,000 principal amount of notes. Upon conversion,
except as otherwise described in this prospectus, you
will not receive any cash representing accrued
interest. See "Description of Notes --- Conversion of
the Notes."
SUBORDINATION.......... The notes are subordinated to all of our existing and
future senior indebtedness and are effectively
subordinated to all of the indebtedness and other
liabilities (including trade and other payables) of
our subsidiaries. As of April 30, 2000, we had
approximately $4.5 million of indebtedness outstanding
that would have constituted senior indebtedness. The
indenture governing the notes does not limit the
amount of indebtedness, including senior indebtedness,
that we and our subsidiaries may incur. See
"Description of Notes --- Subordination of the Notes."
OPTIONAL REDEMPTION.... At any time or from time to time on or after March 20,
2003, we may redeem some or all of the notes at the
declining redemption prices listed herein, plus
accrued interest. See "Description of Notes--Optional
Redemption by Alexion."
REPURCHASE AT
HOLDER'S OPTION UPON
A REPURCHASE EVENT..... You may require us to repurchase your notes upon a
repurchase event in cash, or, at our option, in common
stock, at 105% of the principal amount of the notes,
plus accrued and unpaid interest.
SINKING FUND........... None.
REGISTRATION RIGHTS;
LIQUIDATED DAMAGES..... If we do not comply with certain covenants set forth
in the Registration Rights Agreement, we will be
required to pay liquidated damages. See "Description
of the Notes --- Registration Rights."
USE OF PROCEEDS........ We will not receive any cash proceeds from the sale of
the notes or underlying common stock by the selling
securityholders. We are using the proceeds from the
sale of the notes to fund research and clinical
development activities, manufacturing development,
manufacturing and commercialization of our product
candidates and drug discovery, as well as for working
capital and general corporate purposes, including for
potential acquisitions of additional technologies and
compounds.
NASDAQ NATIONAL
MARKET SYMBOL FOR
COMMON STOCK........... ALXN.
7
<PAGE>
RISK FACTORS
THIS PROSPECTUS INCLUDES FORWARD-LOOKING STATEMENTS. IN PARTICULAR, STATEMENTS
ABOUT OUR EXPECTATIONS, BELIEFS, PLANS, OBJECTIVES, ASSUMPTIONS OR FUTURE EVENTS
OR PERFORMANCE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. WE
HAVE BASED THESE FORWARD-LOOKING STATEMENTS ON OUR CURRENT EXPECTATIONS ABOUT
FUTURE EVENTS. WHILE WE BELIEVE THESE EXPECTATIONS ARE REASONABLE, SUCH
FORWARD-LOOKING STATEMENTS ARE INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES,
MANY OF WHICH ARE BEYOND OUR CONTROL. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE SUGGESTED BY THESE FORWARD-LOOKING STATEMENTS FOR VARIOUS REASONS,
INCLUDING THOSE DISCUSSED BELOW. SOME OF THE KEY FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER FROM OUR EXPECTATIONS ARE DESCRIBED BELOW. GIVEN THESE RISKS
AND UNCERTAINTIES, YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH
FORWARD-LOOKING STATEMENTS. THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS
PROSPECTUS ARE MADE ONLY AS OF THE DATE HEREOF. WE DO NOT UNDERTAKE AND
SPECIFICALLY DECLINE ANY OBLIGATION TO UPDATE ANY SUCH STATEMENTS OR TO PUBLICLY
ANNOUNCE THE RESULTS OF ANY REVISIONS TO ANY OF SUCH STATEMENTS TO REFLECT
FUTURE EVENTS OR DEVELOPMENTS.
RISKS RELATED TO OUR BUSINESS
IF WE CONTINUE TO INCUR OPERATING LOSSES, WE MAY BE UNABLE TO CONTINUE OUR
OPERATIONS.
We have incurred losses since our inception. As of January 31, 2000, we had an
accumulated deficit of approximately $55.8 million. If we continue to incur
operating losses and fail to become profitable or are unable to sustain
profitability, we may be unable to continue our operations. Since we began our
operations in January 1992, we have been engaged primarily in the research and
development of potential drug products. We currently have no products that are
available for commercial sale. We expect to continue to operate at a net loss
for at least the next several years as we increase our research and development
efforts, continue to conduct clinical trials and develop manufacturing, sales,
marketing and distribution capabilities. Our future profitability depends on our
receiving regulatory approval of our product candidates and our ability to
successfully manufacture and market approved drugs, either by ourselves or
jointly with others. The extent of our future losses and the timing of our
profitability are highly uncertain.
IF WE FAIL TO OBTAIN REGULATORY APPROVAL OF OUR PRODUCT CANDIDATES, OR IF
REGULATORY APPROVAL IS DELAYED FOR ANY REASON, WE WILL BE UNABLE TO
COMMERCIALIZE AND SELL OUR PRODUCTS AS WE EXPECT.
WE MUST OBTAIN REGULATORY APPROVAL TO MARKET OUR PRODUCTS IN THE U.S. AND
FOREIGN JURISDICTIONS.
We must obtain regulatory approval before marketing or selling our products. In
the United States, we must obtain approval from the U.S. Food and Drug
Administration, or FDA, for each product that we intend to commercialize. The
FDA approval process is typically lengthy and expensive, and approval is highly
uncertain. Products distributed outside the United States are also subject to
foreign government regulation. None of our product candidates has received
regulatory approval to be commercially marketed and sold and we do not
anticipate receiving approval of any of our product candidates for at least the
next several years. If we fail to obtain regulatory approval we will be unable
to market and sell our future products. Because of the risks and uncertainties
in biopharmaceutical development, our product candidates could take a
significantly longer time to gain regulatory approval than we expect or may
never gain approval. If regulatory approval is delayed, the value of our company
and our results of operations may be harmed.
The process of obtaining FDA and other required regulatory approvals, including
foreign approvals, often takes many years and can vary substantially based upon
the type, complexity and novelty of the products involved. Furthermore, this
approval process is extremely expensive and uncertain. We cannot guarantee that
any of our products under development will be approved for marketing by the FDA.
Even if regulatory
8
<PAGE>
approval of a product is granted, we cannot be certain that we will be able to
obtain the labeling claims necessary or desirable for the promotion of that
product.
WE MAY NEED TO CONDUCT ADDITIONAL PRECLINICAL STUDIES AND WILL NEED TO CONDUCT
COSTLY AND LENGTHY CLINICAL TRIALS BEFORE ANY OF OUR PRODUCT CANDIDATES CAN BE
COMMERCIALIZED; THE RESULTS OF THESE STUDIES AND TRIALS ARE HIGHLY UNCERTAIN.
Many of our product candidates are in an early stage of development. As part of
the regulatory approval process, we may need to conduct preclinical studies on
animals and will need to conduct clinical trials in humans with each product
candidate and for each clinical indication. We may need to perform multiple
preclinical studies using various doses and formulations both before and after
we have commenced clinical trials, which could result in delays in our ability
to market any of our product candidates. Furthermore, even if we obtain
favorable results in preclinical studies on animals, the results in humans may
be different.
After we have conducted preclinical studies in animals we must, among other
requirements, demonstrate that our product candidates are safe and effective for
use in humans suffering from targeted indications in order to receive regulatory
approval for commercial sale. Currently, only two of our product candidates are
being tested in clinical trials. Adverse or inconclusive preclinical or clinical
results could cause us to abandon a product development program.
The completion of clinical trials of our potential products may be delayed or
terminated by many other factors. One factor is the rate of enrollment of
patients, which can vary greatly. Enrollment depends on many factors, including:
- patient receptivity to participate in experimental clinical trials;
- the size of the patient population and the number of clinical trial
sites;
- the proximity of patients to clinical trial sites;
- the performance of the clinical trial sites;
- the eligibility criteria for the clinical trial;
- the existence of competing clinical trials;
- the emergence of newly improved competing products; and
- the performance and reliability of contract research organizations.
We cannot control the rate of patient enrollment. For example, we are conducting
clinical trials in patients with acute cardiovascular conditions, the timing and
frequency of which cannot be predicted. The rate of patient enrollment may not
be sufficient to enable our clinical trials to be completed as expected, if at
all. Further, we cannot be certain that clinical trial research results will be
analyzed or produced in a timely manner, if at all.
Additional factors that can cause delay or termination of our clinical trials
include:
- longer treatment time required to demonstrate efficacy;
- lack of sufficient supplies of the product candidate;
- adverse medical events or side effects in treated patients;
- lack of effectiveness of the product candidate being tested; and
- lack of sufficient funds.
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Typically, if a drug product is intended to treat a chronic disease, safety and
efficacy data must be gathered over an extended period of time. In addition,
clinical trials on humans are typically conducted in three phases. In the final
phase of clinical testing, the FDA generally requires two pivotal clinical
trials that demonstrate substantial evidence of safety and efficacy and
appropriate dosing in a broad patient population at multiple sites to support an
application for regulatory approval.
Results from initial clinical trials may not reflect results that are obtained
in later stage clinical trials. Further, clinical trials of our product
candidates may demonstrate that our product candidates are not sufficiently safe
or effective to obtain the requisite regulatory approvals. Ultimately, our
product candidates may not result in marketable products.
WE WILL NOT BE ABLE TO SELL OUR PRODUCTS IF WE OR OUR THIRD-PARTY MANUFACTURERS
FAIL TO COMPLY WITH MANUFACTURING REGULATIONS.
Before we can begin commercially manufacturing our products we must either
secure manufacturing in an approved manufacturing facility or obtain regulatory
approval of our own manufacturing facility and process. In addition, manufacture
of our drug products must comply with the FDA's current Good Manufacturing
Practices requirements, commonly known as cGMP. The cGMP requirements govern,
among other things, quality control and documentation policies and procedures.
Our manufacturing facilities are continuously subject to inspection by the FDA,
before and after product approval. We cannot guarantee that we, or any
third-party manufacturer of our drug products, will be able to comply with cGMP
requirements. Material changes to the manufacturing processes of our drug
products after approvals have been granted are also subject to review and
approval by the FDA or other regulatory agencies.
IF WE FAIL TO OBTAIN THE CAPITAL NECESSARY TO FUND OUR OPERATIONS, WE WILL BE
UNABLE TO COMPLETE OUR PRODUCT DEVELOPMENT PROGRAMS.
In the future, we will need to raise substantial additional capital to fund
operations and complete our product development and commercial manufacturing
programs. Funding, whether from a public or private offering of debt or equity,
a bank loan or a collaborative agreement, may not be available when needed or on
favorable terms. If we raise additional funds by selling stock, the percentage
ownership of our then current stockholders will be reduced. If we cannot raise
adequate funds to satisfy our capital requirements, we may have to limit, delay,
scale-back or eliminate our research and development activities or future
operations. We might be forced to license our technology or to commercialize our
products with the help of others when it would be more profitable or
strategically important for us to not take these actions. Any of these actions
may harm our business.
We expect to continue to spend substantial amounts of capital for our operations
for the foreseeable future, including funds for:
- research and development programs;
- preclinical studies and clinical trials;
- regulatory approval processes;
- production of product candidates for clinical trials;
- establishment of commercial scale manufacturing capabilities; and
- establishment of sales and marketing capabilities.
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The amount of capital we may need depends on many factors, including:
- the progress, timing and scope of our research and development
programs;
- the progress, timing and scope of our preclinical studies and
clinical trials;
- the time and cost necessary to obtain regulatory approvals;
- the time and cost necessary to further develop manufacturing
processes, arrange for contract manufacturing or build manufacturing
facilities and obtain the necessary regulatory approvals for those
facilities;
- the time and cost necessary to respond to technological and market
developments;
- the time and cost necessary to develop sales, marketing and
distribution capabilities;
- any changes made or new developments in our existing collaborative,
licensing and other commercial relationships; and
- any new collaborative, licensing and other commercial relationships
that we may establish.
IF OUR COLLABORATION WITH PROCTER & GAMBLE IS TERMINATED, WE MAY BE UNABLE TO
COMMERCIALIZE 5G1.1-SC IN THE TIME EXPECTED, IF AT ALL.
We rely exclusively on Procter & Gamble to provide funding and additional
resources for the development and commercialization of 5G1.1-SC. These include
funds and resources for:
- clinical development and manufacturing;
- obtaining regulatory approvals; and
- sales, marketing and distribution efforts worldwide.
We cannot guarantee that Procter & Gamble will devote the resources necessary to
successfully develop and commercialize 5G1.1-SC. Either party may terminate the
agreement for specified reasons, including if the other party is in material
breach of the agreement or has experienced a change of control. We have granted
Procter & Gamble an exclusive worldwide license to our intellectual property
related to 5G1.1-SC, with a right to sublicense. Pursuant to the collaboration
agreement, Procter & Gamble has the right to develop 5G1.1-SC for any other
indication, including those that we may be pursuing independently with other
product candidates.
If our agreement with Procter & Gamble is terminated, we will need to fund the
development and commercialization of 5G1.1-SC on our own or identify a new
development partner, either of which would cause significant delays and result
in additional development costs. A termination may also require us to repeat
development stages already completed with Procter & Gamble, which could result
in significant additional delay or costs.
IF WE ARE UNABLE TO ENGAGE AND RETAIN THIRD-PARTY COLLABORATORS, OUR RESEARCH
AND DEVELOPMENT EFFORTS MAY BE DELAYED.
We depend upon third-party collaborators, including manufacturers, to assist us
in the development of our product candidates. If any of our collaborators
breaches or terminates its agreement with us or otherwise fails to conduct its
collaborative activities in a timely manner, we may experience significant
delays in the development or commercialization of the product candidate or the
research program covered by the agreement.
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In addition, we may be required to devote additional funds or other resources to
these activities or to terminate them.
Our continued success will depend in large part upon the efforts of outside
parties. For the research, development, manufacture and commercialization of our
products, we will likely enter into various arrangements with other
corporations, licensors, licensees, outside researchers, consultants and others.
However, we cannot assure you that:
- we will be able to negotiate acceptable collaborative arrangements
to develop or commercialize our products;
- any arrangements with third parties will be successful; or
- current or potential collaborators will not pursue treatments for
other diseases or seek alternative means of developing treatments
for the diseases targeted by our programs.
IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY, WE MAY BE UNABLE TO
COMPETE EFFECTIVELY.
Our ability to secure patent protection and the extent of protection can be very
limited. Patent protection currently only lasts approximately 17 to 20 years
depending on the time of filing and, sometimes, the time required for FDA
approval. However, it can take many more years than offered by patent protection
to transform a drug discovery through testing and development into a
commercially-viable product. Moreover, once a drug has hit the marketplace, it
is often forced to compete not only with different drugs treating the same
ailments, but also with "copy-cat" drug products or even generic versions of the
same drug if the drug has lost its patent protection. Consequently, protection
of our patents and trade secrets and those of our licensors, is very important
to our ability to commercially succeed. Other pharmaceutical companies are
similarly very focused on protecting their patents and technology, so it is also
very important for us to avoid infringing the rights of others while developing
our own drug discoveries.
Patent applications filed by us or on our behalf may not result in patents being
issued to us. Even if a patent is issued, the patent may not afford protection
against competitors with similar technology. Furthermore, others may
independently develop similar technologies or duplicate any of our technology.
It is possible that before any of our potential product candidates can be
commercialized, their related patents may expire, or remain in existence for
only a short period following commercialization, thus reducing any advantage of
the patent. Moreover, composition of matter patent protection, which gives
patent protection for a compound or a composition per se, may not be available
for some of our product candidates.
Our processes and potential product candidates may conflict with patents that
have been or may be granted to competitors, universities or others. As the
biopharmaceutical industry expands, more patents are issued. Thus, the risk
increases that our processes and potential product candidates may give rise to
claims that they infringe the patents of others. These other patent holders
could bring legal actions against us claiming damages and seeking to prevent
clinical testing, manufacturing and marketing of the affected product or
process. If any of these actions are successful, in addition to any potential
liability for damages, we could be required to obtain a license in order to
continue to conduct clinical tests, manufacture or market the affected product
or use the affected process. Required licenses may not be available on
acceptable terms, if at all. Moreover, if we become involved in litigation or
legal disputes, it could consume a substantial portion of our financial
resources and the efforts of our personnel for uncertain results. In addition,
we may have to expend resources to protect our interests from possible
infringement by others.
We are aware of broad patents owned by third parties relating to the
manufacture, use and sale of recombinant humanized antibodies, recombinant
humanized single chain antibodies and genetically engineered animals.
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We have received notice from certain of these parties regarding the existence of
certain of these patents which the owners claim may be relevant to the
development and commercialization of certain of our proposed product candidates.
We have acquired licenses with respect to certain of these patents, which we
believe are relevant for the timely development and commercialization of certain
of our product candidates. With regard to certain other patents, we have either
determined in our judgment that:
- our products do not infringe the patents;
- we do not believe the patents are valid; and/or
- we have identified and are testing various modifications which we
believe should not infringe the patents and which should permit
commercialization of our product candidates.
However, owners of these patents might still seek to enforce their patents
against our so-modified commercial products or against the development
activities related to the non-modified products. If we are unable to obtain
necessary licenses on commercially reasonable terms, we could encounter delays
in product market introductions while we attempt to design around such patent or
could find that the development, manufacture or sale of products requiring such
a license could be nearly impossible. Further, owners of patents that we do not
believe are relevant to our product development and commercialization might seek
to enforce their patents against us. Such action could result in litigation
which would be costly and time consuming.
In addition, our business requires using sensitive technology, techniques,
proprietary compounds, as well as cultivating relationships with outside
parties, including suppliers, outside scientists and potential customers and
sources of funding. Moreover, since we are a small pharmaceutical company with
no commercial products and limited resources, we rely heavily on collaboration
with other companies and other scientists in our research and development
efforts and expect to continue to do so since collaboration is important for
scientific research. Unfortunately, such arrangements and relationships carry
with them a strong risk of exposing our trade secrets often to the scrutiny of
others. As a result, we are susceptible to the loss of our trade secrets.
We cannot assure you that:
- others will not independently develop substantially equivalent
proprietary information and techniques;
- others will not gain access to our trade secrets;
- our trade secrets will not be disclosed; or
- we can effectively protect our rights to unpatented trade secrets.
IF THE TESTING OR USE OF OUR PRODUCTS HARMS PEOPLE, WE MAY BE SUBJECT TO COSTLY
AND DAMAGING PRODUCT LIABILITY CLAIMS.
Our business exposes us to product liability risks that are inherent in the
testing, manufacturing, marketing and sale of drugs for use in humans, including
but not limited to, unacceptable side effects. Such side effects and other risks
could give rise to product liability claims against us or force us to recall our
products, if any, from the marketplace. Some of these risks are unknown at this
time. For example, little is known about the potential long-term health risks of
transplanting non-human tissue into humans, a goal of our UniGraft program.
In addition to product liability risks associated with sales of products, we may
be liable to the claims of individuals who participate in clinical trials of our
products. A number of patients who participate in such trials are already
critically ill when they enter a study. We cannot assure you that any waivers we
may obtain will protect us from liability or the costs of product liability
litigation. Our product liability insurance may not
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provide adequate protection against potential liabilities. Moreover, we may not
be able to maintain our insurance on acceptable terms. As a result of these
factors, a product liability claim, even if successfully defended, could have a
material adverse effect on our business, financial condition and results of
operations.
IF WE ARE UNABLE TO MANUFACTURE OUR DRUG PRODUCTS IN SUFFICIENT QUANTITIES AND
AT ACCEPTABLE COST, WE MAY BE UNABLE TO MEET DEMAND FOR OUR PRODUCTS WHICH WOULD
RESULT IN A LOSS OF POTENTIAL REVENUES.
We have no experience manufacturing drug products in volumes that will be
necessary to support commercial sales. Our unproven manufacturing process may
not meet initial expectations as to schedule, reproducibility, yields, purity,
costs, quality, and other measurements of performance. Improvements in
manufacturing processes typically are very difficult to achieve and are often
very expensive. We cannot know with any certainty how long it might take to make
improvements if it became necessary to do so. If we contract for manufacturing
services with an unproven process, our, contractor is subject to the same
uncertainties, high standards and regulatory controls. If we are unable to
establish and maintain commercial scale manufacturing within our planned time
and cost parameters, sales of our products and our financial performance will be
adversely affected.
We may encounter problems with any of the following if we attempt to increase
the scale, process or size of manufacturing:
- design, construction and qualification of manufacturing facilities
that meet regulatory requirements;
- production yields from the manufacturing process;
- purity of our drug products;
- quality control and assurance;
- shortages of qualified personnel; and
- compliance with FDA regulations.
IF WE ARE UNABLE TO ESTABLISH SALES, MARKETING AND DISTRIBUTION CAPABILITIES OR
TO ENTER INTO AGREEMENTS WITH THIRD PARTIES TO DO SO, WE MAY BE UNABLE TO
SUCCESSFULLY MARKET AND SELL ANY FUTURE DRUG PRODUCTS.
We currently have no sales, marketing or distribution capabilities. If we are
unable to establish sales, marketing or distribution capabilities either by
developing our own sales, marketing and distribution organization or by entering
into agreements with others, we may be unable to successfully sell our products.
If we are unable to effectively sell our drug products, our ability to generate
revenues will be harmed. We cannot guarantee that we will be able to hire in a
timely manner, the qualified sales and marketing personnel we need, if at all.
In addition, we cannot guarantee that we will be able to enter into any
marketing or distribution agreements on acceptable terms, if at all. If we
cannot establish sales, marketing and distribution capabilities as we intend,
either by developing our own capabilities or entering into agreements with third
parties, sales of our future drug products may be harmed.
We have entered into a collaboration with Procter & Gamble relating to 5G1.1-SC.
Under the agreement, Procter & Gamble will be responsible for selling, marketing
and distributing 5G1.1-SC. We cannot guarantee Procter & Gamble or any future
collaborators will successfully sell any of our future drug products.
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EVEN IF OUR PRODUCT CANDIDATES RECEIVE REGULATORY APPROVAL, WE MAY STILL FACE
DEVELOPMENT AND REGULATORY DIFFICULTIES RELATING TO THE DRUG PRODUCTS IN THE
FUTURE.
If we receive regulatory approval of any of our product candidates, the FDA or a
comparable foreign regulatory agency may, nevertheless, limit the indicated uses
of the product candidate. In addition, a marketed product, its manufacturer and
the manufacturer's facilities are subject to continual review and periodic
inspections by regulatory agencies. The discovery of previously unknown problems
with a product, manufacturer or facility may result in restrictions on the
product or manufacturer, including withdrawal of the product from the market.
The failure to comply with applicable regulatory requirements can, among other
things, result in:
- warning letters;
- fines and other civil penalties;
- suspended regulatory approvals;
- refusal to approve pending applications or supplements to approved
applications;
- refusal to permit exports from the United States;
- product recalls;
- seizure of products;
- injunctions;
- operating restrictions;
- total or partial suspension of production; and/or
- criminal prosecutions.
Even if we obtain regulatory approval, we may be required to undertake
post-marketing trials. In addition, identification of side effects after a drug
is on the market or the occurrence of manufacturing problems could result in
withdrawal of approval, or require reformulation of the drug, additional
preclinical testing or clinical trials, changes in labeling of the product,
and/or additional marketing applications.
If we receive regulatory approval, we will also be subject to ongoing FDA
obligations and continued regulatory review. In particular, we or our
third-party manufacturers will be required to adhere to requirements pertaining
to cGMP. Under cGMP, we are required to manufacture our products and maintain
our records in a prescribed manner with respect to manufacturing, testing and
quality control activities. Furthermore, we or our third-party manufacturers
must pass a preapproval inspection of manufacturing facilities by the FDA before
the product can obtain marketing approval. We will also be subject to ongoing
FDA requirements for submission of safety and other post-market information.
We have not made significant investments in the development of commercial
manufacturing, marketing, distribution or sales capabilities. Moreover, we have
insufficient capacity to manufacture more than one product candidate at a time
or to manufacture our product candidates for later stage clinical development or
commercialization. If we are unable to find an acceptable outside manufacturer
on reasonable terms, we will have to divert resources. As a result, our ability
to conduct human clinical testing would be materially adversely affected,
resulting in delays in the submission of products for regulatory approval and in
the initiation of new development programs. Our competitive position and our
prospects for achieving profitability could be materially and adversely
affected.
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In addition, as our product development efforts progress, we may need to hire
additional personnel skilled in, or enter into collaborations with corporate
partners for, clinical testing, regulatory compliance and, if we develop
products with commercial potential, manufacturing, marketing and sales. We
cannot assure you that we will be able to acquire, or establish third-party
relationships to provide, any or all of these resources on a timely or
economically feasible basis, if at all.
IF WE ARE UNABLE TO OBTAIN ADEQUATE REIMBURSEMENT FROM GOVERNMENT HEALTH
ADMINISTRATION AUTHORITIES, PRIVATE HEALTH INSURERS AND OTHER ORGANIZATIONS, OUR
FUTURE BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION COULD BE HARMED.
Our ability to commercialize our products successfully may depend in part on the
extent to which reimbursement for the cost of such products and related
treatments will be available from government authorities, private health
insurers and other organizations. Third-party payors are attempting to control
costs by limiting coverage of products and treatments and the level of
reimbursement for medical products and services. Significant uncertainty exists
as to the reimbursement status of newly approved healthcare products. If we
succeed in bringing any products to market, these products may not be considered
cost-effective and reimbursement may not be available. If reimbursement becomes
available, the payor's reimbursement policies may affect the market for our
product, thus materially adversely affecting the profitability of our products.
XENOTRANSPLANTATION IS AN UNPROVEN TECHNOLOGY AND MAY ACHIEVE LIMITED MARKET
ACCEPTANCE DUE TO ETHICAL OR MEDICAL CONCERNS.
Our UniGraft Program may never result in the development of any therapeutic
products. Xenotransplantation technology is subject to extensive clinical
testing. We are not aware of any xenotransplantation technology that has been
approved for sale by the FDA or comparable foreign regulatory authorities. In
addition, there is currently very little regulatory guidance for how to conduct
research or use products developed in this area since the FDA has only issued
interim guidelines.
Xenotransplantation also poses a risk that viruses, prions or other animal
pathogens may be unintentionally transmitted not only to a human patient
recipient, but other human beings. While these viruses have not been shown to
cause any disease in pigs or humans, it is not known what effect, if any, such
viruses might have on humans. Recent scientific publications by others
demonstrate, under laboratory conditions, that porcine retroviruses have the
potential to infect human cells. The introduction of previously
non-transmittable viruses to the human species poses ethical concerns. Further
detection of infection of porcine virus in our preclinical and clinical testing
or the testing by our competitors in this field could adversely affect the
commercial acceptability of this research and our future ability to secure
research funding.
Consequently, even if we succeed in developing xenotransplantation products, our
products may not be widely accepted by the medical community or third-party
payors until more facts are established and ethical consensus is reached. In
addition, such concerns may also create additional regulatory hurdles for FDA
approval or for consideration in use of our products by hospital ethics
committees. If accepted, the degree of acceptance may limit the size of the
market for our products. Moreover, due to the controversial nature of
xenotransplantation, market prices for our securities may be subject to
increased volatility.
IF WE FAIL TO COMPETE SUCCESSFULLY WITH OUR COMPETITORS, OUR REVENUES AND
OPERATING RESULTS WILL BE HARMED.
Our competitors may develop, manufacture and market products that are more
effective or less expensive than ours, or simply market their products more
successfully to patients or doctors. They may also obtain regulatory approvals
faster than we can obtain them or commercialize products before we do. These
companies also compete with us to attract qualified personnel and parties for
acquisitions, joint ventures or other
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collaborations. They also compete with us to attract academic research
institutions as partners, including for licensing these institutions'
proprietary technology. If our competitors successfully enter into such
arrangements with academic institutions, we will then be precluded from pursuing
those specific unique opportunities and may not be able to find equivalent
opportunities elsewhere. In addition, products or treatments developed in the
future by third parties may adversely affect the marketability of our products
by rendering them less competitive or obsolete. For example, the recent
development of tumor necrosis factor inhibitors for rheumatoid arthritis may
render obsolete a number of current drugs used for treating such ailment from
the marketplace.
IF WE FAIL TO RECRUIT AND RETAIN PERSONNEL, OUR RESEARCH AND PRODUCT DEVELOPMENT
PROGRAMS MAY BE DELAYED.
We are highly dependent upon the efforts of our senior management and scientific
personnel. There is intense competition for qualified scientific and technical
personnel. Since our business is very science-oriented and specialized, we need
to continue to attract and retain such people. We may not be able to continue to
attract and retain the qualified personnel necessary for developing our
business. If we lose the services of, or fail to recruit, key scientific and
technical personnel, our research and product development programs would be
significantly and detrimentally affected.
In particular, we highly value the services of Dr. Leonard Bell, our President
and Chief Executive Officer. The loss of his services could materially and
adversely affect our ability to achieve our development objectives.
FUTURE ACQUISITIONS OF OUR COMPANY MAY BE DISCOURAGED DUE TO ANTI-TAKEOVER
MEASURES ADOPTED BY OUR BOARD OF DIRECTORS, PROVISIONS OF DELAWARE LAW AND
FUTURE ISSUANCES OF PREFERRED STOCK.
Anyone seeking to acquire control of our company may encounter difficulties as a
result of our anti-takeover measures. Our board of directors has adopted a
shareholder rights plan, or "poison pill," which enables our board of directors
to issue preferred stock purchase rights triggered by an acquisition of 20% or
more of the outstanding shares of our common stock. In addition, our board of
directors is authorized to issue one or more series of preferred stock with
those preferences and rights that it may designate. These provisions and
specific provisions of Delaware Law relating to business combinations with
interested stockholders are intended to encourage any person interested in
acquiring us to negotiate with and obtain the approval of our board of directors
in connection with an acquisition or merger. However, these provisions could
have an opposite effect of delaying, deterring or preventing a merger or change
in control. Some of these provisions may discourage a future acquisition of our
company even if stockholders would receive an attractive value for their shares
or if a significant number of our stockholders believed that such a proposed
transaction to be in their best interest. As a result, stockholders who desire
to participate in such a transaction may not have the opportunity to do so.
UNFORESEEN YEAR 2000 PROBLEMS MAY HAVE ADVERSE EFFECTS ON OUR BUSINESS AND
RESULTS OF OPERATIONS.
While we have not experienced any Year 2000 problems as of the date of this
prospectus, such problems could arise in the future. In that event, our
operations could be affected in several adverse ways. Failure of a scientific
instrument or laboratory facility or by any of our suppliers could result, among
other things, in the loss of experiments that would take weeks to set up and
repeat. Such delays in the progress of research could have an adverse impact on
our stock price and on our ability to raise capital, and the cost of repeating
lost experiments cannot reasonably be estimated at this time. In addition,
research delays could occur due to the impact of Year 2000 problems at major
vendors, government research funding agencies, or development partners.
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RISKS RELATED TO THE NOTES
TO SERVICE OUR DEBT, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH, WHICH DEPENDS
ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make payments on and to refinance our debt, including the notes,
will depend on our ability to generate cash. We currently have no products that
are available for commercial sale. Our sole sources of revenue, today and for
the foreseeable future, consist of research and development support payments,
license fees and milestone payments under collaborations with third parties and
awards under various government grants. For more detailed information, see
footnote 4 to our unaudited financial statements included in our Quarterly
Report on From 10-Q for the fiscal quarter ended January 31, 2000 and footnote 8
to our audited financial statements included in our Annual Report on Form 10-K
for the year ended July 31, 1999. Our ability to continue to generate these
revenues will depend on the results of our research and development efforts and
other factors, including general economic, financial, competitive, legislative
and regulatory conditions, some of which are beyond our control. In addition,
the indenture does not limit our ability to incur additional indebtedness in the
future. If new indebtedness is incurred, the related risks that we now face
could intensify. Our ability to make required payments on the notes and to
satisfy any other debt obligations will depend upon our future operating
performance and our ability to obtain additional debt or equity financing.
THE NOTES ARE SUBORDINATED AND UNSECURED.
The notes are unsecured and subordinated in right of payment in full to all of
our existing and future senior indebtedness. As a result, in the event of our
bankruptcy, liquidation or reorganization or upon acceleration of the notes due
to an event of default under the indenture and in certain other events, our
assets will be available to pay obligations on the notes only after all senior
indebtedness has been paid in full. After retiring our senior indebtedness, we
may not have sufficient assets remaining to pay amounts due on any or all of the
notes then outstanding. In addition, in the event of any acceleration of the
notes because of an event of default, holders of any senior indebtedness would
be entitled to payment in full in cash or other payment satisfactory to holders
of all senior indebtedness before the holders of the notes are entitled to
receive any payment or distribution.
THE NOTES ARE NOT PROTECTED BY RESTRICTIVE COVENANTS.
The indenture governing the notes does not contain any financial or operating
covenants or restrictions on the payments of dividends, the incurrence of
indebtedness or the issuance or repurchase of securities by us or any of our
subsidiaries. The indenture contains no covenants or other provisions to afford
protection to holders of the notes in the event of a fundamental change
involving Alexion Pharmaceuticals, Inc. except to the extent described under
"Description of Notes---Redemption at Option of the Holder."
WE MAY BE REQUIRED TO REPURCHASE THE NOTES UPON A REPURCHASE EVENT.
You may require us to repurchase all or any portion of your notes upon a
repurchase event. We may not have sufficient cash funds to repurchase the notes
upon a repurchase event. We may elect, subject to certain conditions, to pay the
repurchase price in common stock. Although there are currently no restrictions
on our ability to pay the repurchase price, future debt agreements may prohibit
us from repaying the repurchase price in either cash or common stock. If we are
prohibited from repurchasing the notes, we could seek consent from our lenders
to repurchase the notes. If we are unable to obtain their consent, we could
attempt to refinance the notes. If we were unable to obtain a consent or
refinance, we would be prohibited from repurchasing the notes. If we were unable
to repurchase the notes upon a repurchase event, it would result in an event of
default under the indenture. An event of default under the indenture could
result in a further event of default under our other then-existing debt. In
addition, the occurrence of the repurchase event may be an event of default
under our
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other debt. As a result, we would be prohibited from paying amounts due on the
notes under the subordination provisions of the indenture.
THE TRADING PRICE OF OUR SECURITIES COULD BE SUBJECT TO SIGNIFICANT
FLUCTUATIONS.
The trading price of our common stock has been volatile, and the trading price
for the notes and the common stock may be volatile in the future. Factors such
as announcements of fluctuations in our or our competitors' operating results,
changes in our prospects and market conditions for biotechnology stocks in
general could have a significant impact on the future trading prices of our
common stock and the notes. In particular, the trading price of the common stock
of many biotechnology companies, including us, has experienced extreme price and
volume fluctuations, which have at times been unrelated to the operating
performance of such companies whose stocks were affected. In particular, since
August 1, 1999, the intraday sales price of our common stock has ranged from a
low of $10.00 per share to a high of $119.88 per share.
Some of the factors that may cause volatility in the price of our securities
include:
- quarterly variations in results;
- business and product market cycles;
- fluctuations in customer requirements;
- the availability and utilization of manufacturing capacity;
- the timing of new product introductions; and
- the ability to develop and implement new technologies.
The price of our securities may also be affected by the estimates and
projections of the investment community, general economic and market conditions,
and the cost of operations in our product markets. While we cannot predict the
individual effect that these factors may have on the price or our securities,
these factors, either individually or in the aggregate, could result in
significant variations in price during any given period of time. There can be no
assurance that these factors will not have an adverse effect on the trading
prices of our common stock and the notes.
THE NOTES AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES
WILL NOT BE FREELY TRADABLE ON THE OPEN MARKET.
The notes and the shares of common stock issuable upon conversion of the notes
have not been registered under the Securities Act of 1933 or under any state
securities laws. Unless the notes and the shares of common stock issuable upon
conversion of the notes are registered, you cannot offer or sell them, except in
a transaction that is exempt from, or not subject to, the registration
requirements of the Securities Act of 1993 and applicable state securities laws.
See "Notice to Investors."
WE CANNOT ASSURE YOU THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THE NOTES.
The notes constitute a new issue of securities for which there is no established
trading market. We have been informed by the selling securityholders that they
intend to make a market in the notes after the offering is completed. Any
initial purchaser may cease its market-making at any time without notice.
Although the notes are eligible for trading in The Portal Market, we do not
expect the notes to remain eligible for trading on that
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market. We do not intend to list the notes for trading on any national
securities exchange or the Nasdaq National Market. We cannot assure you that an
active trading market for the notes will develop or, if such market develops,
how liquid it will be. If a trading market does not develop or is not
maintained, holders of the notes may experience difficulty in reselling, or an
inability to sell, the notes and the trading price of the notes may decline.
THE MARKET PRICE OF OUR COMMON STOCK COULD BE AFFECTED BY THE SUBSTANTIAL NUMBER
OF SHARES THAT ARE ELIGIBLE FOR FUTURE SALE.
As of April 30, 2000, we had 15,075,110 shares of common stock outstanding,
excluding 39,759 shares issuable upon the exercise of warrants and 2,160,128
shares issuable upon the exercise of options granted under our existing stock
option plans. We cannot predict the effect, if any, that future sales of the
notes or shares of common stock, including common stock issuable upon conversion
of the notes, or the availability of the notes or shares of common stock for
future sale, will have on the market price of common stock prevailing from time
to time.
We have agreed not to, and our executive officers and directors will agree that
they will not, offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file a registration statement under the Securities
Act relating to, any shares of common stock or securities convertible or
exchangeable or exercisable for any shares of our common stock for a period of
90 days after March 3, 2000, subject to limited exceptions as described under
"Plan of Distribution," without the prior written consent of J.P. Morgan
Securities Inc.
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USE OF PROCEEDS
We will not receive any cash proceeds from the sale of the notes or underlying
common stock by the selling securityholders. See "Selling Securityholders" for a
list of those persons and entities receiving the proceeds from the sales of the
notes or the underlying common stock.
We are using the proceeds of approximately $116.1 million from the sale of the
notes to fund research and clinical development activities, manufacturing
development, manufacturing and commercialization of our product candidates; drug
discovery; as well as for working capital and general corporate purposes,
including for potential acquisitions of additional technologies and compounds.
Our management retained broad discretion in the allocation of the net proceeds
of the offering. Pending such uses, we invested the net proceeds in short-term,
investment grade, interest-bearing securities.
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SELLING SECURITYHOLDERS
We originally sold the notes to the initial purchasers on March 3, 2000. The
initial purchasers have advised us that they resold the notes in transactions
exempt from the registration requirements of the Securities Act of 1933 to
"qualified institutional buyers" (as defined in Rule 144A of the Securities
Act). These subsequent purchasers, or their transferees, pledgees, donees or
successors, may from time to time offer and sell any of the notes and/or shares
of our common stock issuable upon conversion of the notes pursuant to this
prospectus.
We are registering these notes and shares of common stock pursuant to a
registration rights agreement, dated March 3, 2000, between us and the initial
purchasers. Under the agreement, we must file a registration statement with
regard to the notes and the shares of common stock within 90 days of March 8,
2000. This prospectus is part of that registration statement. We must also keep
the registration statement effective until March 8, 2002 or the earlier of (a)
the sale pursuant to the registration statement of all the securities registered
thereunder, (b) the date on which all the securities (x) held by the persons who
are not our affiliates may sell such securities under Rule 144(k) or (y) cease
to be outstanding or (c) a subsequent shelf registration statement covering all
of these securities has been declared effective under the Securities Act.
As of the date of this prospectus, the aggregate principal amount of notes
outstanding is $120,000,000. Prior to any use of this prospectus in connection
with an offering of the notes and/or shares of common stock, this prospectus
will be supplemented to set forth the name and number of shares beneficially
owned by the selling securityholder intending to sell these notes and/or shares
of common stock and the number of these securities to be offered. The prospectus
supplement will also disclose whether any selling securityholder selling in
connection with the prospectus supplement has held any position or office with,
been employed by or otherwise has had a material relationship with us or any of
our affiliates during the three years prior to the prospectus supplement.
Because the selling securityholders may offer all or some of the notes and
shares of common stock issued upon conversion thereof pursuant to the offering
contemplated by this prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the notes or
shares of common stock that will be held by the selling securityholders after
completion of this offering, no estimate can be given as to the principal amount
of notes or shares of common stock that will be held by the selling
securityholders after completion of this offering. See "Plan of Distribution."
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DESCRIPTION OF NOTES
We issued the notes under an indenture, dated as of March 8, 2000, between
Alexion Pharmaceuticals, Inc. and The Chase Manhattan Bank, as trustee. The
following summarizes some, but not all, of the provisions of the notes and the
indenture. As used in this section, the words "we," "us," "our" or "Alexion"
refer to Alexion Pharmaceuticals, Inc. and its successors under the indenture
and do not include any current or future subsidiary of Alexion Pharmaceuticals,
Inc.
GENERAL
The notes are unsecured general obligations of Alexion and will be subordinate
in right of payment as described under "---Subordination of the Notes." The
notes are convertible into common stock of Alexion as described under
"---Conversion of the Notes." The notes will be limited to $120,000,000
aggregate principal amount. The notes will be issued only in denominations of
$1,000 or in multiples of $1,000.
The notes bear interest at 5-3/4% per annum from March 8, 2000, or from the most
recent payment date to which interest has been paid or duly provided for.
Interest will be payable semi-annually in arrears on March 15 and September 15,
commencing on September 15, 2000, to holders of record at the close of business
on the preceding March 1 and September 1, respectively, except:
- that the interest payable upon redemption or repurchase, unless the
date of redemption or repurchase is an interest payment date, will
be payable to the person to whom principal is payable; and
- as set forth in the next succeeding paragraph.
In the case of any note, or portion of any note, that is converted into common
stock of Alexion during the period from, but excluding, a record date for any
interest payment date to, but excluding, that interest payment date, either:
- if the note, or portion of the note, has been called for redemption
on a redemption date that occurs during that period, or is to be
repurchased on a repurchase date, as defined below, that occurs
during that period, Alexion will not be required to pay interest on
that interest payment date in respect of any note, or portion of any
note, that is so redeemed or repurchased; or
- if otherwise, any note or portion of any note that is not called for
redemption is submitted for conversion during that period must be
accompanied by funds equal to the interest payable on that interest
payment date on the principal amount so converted.
See "---Conversion of the Notes."
Interest will be paid, at Alexion's option, either:
- by check mailed to the address of the person entitled to the
interest as it appears in the note register, provided that a holder
of notes with an aggregate principal amount in excess of $10 million
will, at the written election of the holder, filed on or before the
relevant record date with the trustee, be paid by wire transfer in
immediately available funds; or
- by transfer to an account maintained by that person located in the
United States.
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Payments to The Depository Trust Company, New York, New York, or DTC, will be
made by wire transfer of immediately available funds to the account of DTC or
its nominee. Interest will be computed on the basis of a 360-day year composed
of twelve 30-day months.
The notes will mature on March 15, 2007 unless earlier converted, redeemed or
repurchased as described below. The indenture does not contain any financial
covenants or restrictions on the payment of dividends, the incurrence of
indebtedness, or the issuance or repurchase of securities by Alexion or any of
its subsidiaries. The indenture contains no covenants or other provisions to
protect holders of the notes in the event of a highly leveraged transaction or a
change in control of Alexion except to the extent described below under
"---Repurchase at Option of Holders."
CONVERSION OF THE NOTES
Any registered holder of notes may, at any time prior to close of business on
the business day prior to the date of repurchase, redemption or final maturity
of the notes, as appropriate, convert the principal amount of any notes or
portions thereof, in denominations of $1,000 or integral multiples of $1,000,
into common stock of Alexion, at $106.425 per share, subject to adjustment as
described below. Except as described below, no payment or other adjustment will
be made on conversion of any notes for interest accrued thereon or for dividends
on any common stock issued upon conversion. If any notes not called for
redemption are converted between a record date and the next interest payment
date, those notes must be accompanied by funds equal to the interest payable on
the next interest payment date on the principal amount so converted. Alexion is
not required to issue fractional shares of common stock upon conversion of the
notes and, instead, will pay a cash adjustment based upon the market price of
common stock on the last trading day prior to the date of conversion. In the
case of notes called for redemption or tendered for repurchase, conversion
rights will expire at the close of business on the business day preceding the
day fixed for redemption or repurchase unless Alexion defaults in the payment of
the redemption or repurchase price. A note which the holder has elected to be
repurchased may be converted only if the holder withdraws its election to have
its notes repurchased in accordance with the terms of the indenture before the
close of business on the business day prior to the repurchase date.
The initial conversion price is subject to adjustment upon specified events,
including:
(1) the issuance of common stock of Alexion as a dividend or
distribution on the common stock;
(2) the issuance to all holders of common stock of rights or warrants to
purchase common stock;
(3) specified subdivisions and combinations of the common stock;
(4) the distribution to all holders of common stock of capital stock,
other than common stock, or evidences of indebtedness of Alexion or
of assets, including securities, but excluding those rights,
warrants, dividends and distributions referred to above or paid in
cash;
(5) a dividend or distribution consisting exclusively of cash to all
holders of common stock if the aggregate amount of these
distributions combined together with (A) all other all-cash
distributions made within the preceding 12 months in respect of
which no adjustment has been made plus (B) any cash and the fair
market value of other consideration payable in any tender offers by
Alexion or any of its subsidiaries for common stock concluded within
the preceding 12 months in respect for which no adjustment has been
made, exceeds 10% of Alexion's market capitalization, being the
product of the then current market price of the common stock
multiplied by the number of shares of common stock then outstanding;
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(6) the purchase of common stock pursuant to a tender offer made by
Alexion or any of its subsidiaries involves an aggregate
consideration that, together with (A) any cash and the fair market
value of any other consideration payable in any other tender offer
by Alexion or any of its subsidiaries for common stock expiring
within the 12 months preceding such tender offer plus (B) the
aggregate amount of any such all-cash distributions referred to in
(5) above to all holders of common stock within the 12 months
preceding the expiration of the tender offer for which no adjustment
has been made, exceeds 10% of Alexion's market capitalization on the
expiration of such tender offer, or
(7) payment on tender offers or exchange offers by a third party other
than Alexion or any of its subsidiaries if, as of the closing date
of the offer, Alexion's board of directors does not recommend
rejection of the offer. This adjustment will be made if a tender
offer increases the person's ownership to more than 25% of Alexion's
outstanding common stock and the payment per share is greater than
the current market price of the common stock. This adjustment will
not be made if the tender offer is a merger or transaction described
below under "-Consolidation, Merger and Sale of Assets."
In the case of:
- any reclassification or change of the outstanding shares of the
common stock, or
- a consolidation, merger or combination involving Alexion or a sale
or conveyance to another person of the property and assets of
Alexion as an entirety or substantially as an entirety, in each case
as a result of which holders of common stock will be entitled to
receive stock, other securities, other property or assets, including
cash, with respect to or in exchange for all shares of common stock,
then the holders of the notes then outstanding will generally be entitled
thereafter to convert the notes into the kind and amount of shares of stock and
other securities or other property or assets, including cash, which they would
have owned or been entitled to receive upon such reclassification, change,
consolidation, merger, combination, sale or conveyance had the notes been
converted into common stock immediately prior to that reclassification, change,
consolidation, merger, combination, sale or conveyance assuming that a holder of
notes would not have exercised any rights of election as to the stock, other
securities or other property or assets, including cash, receivable in connection
with that transaction.
If Alexion makes a taxable distribution to holders of common stock or in
specified other circumstances requiring an adjustment to the conversion price,
the holders of notes may, in some circumstances, be deemed to have received a
distribution subject to U.S. income tax as a dividend. In some other
circumstances, the absence of an adjustment to the conversion price may result
in a taxable dividend to the holders of common stock. See "---United States
Federal Income Tax Consequences."
Alexion may from time to time, to the extent permitted by law, reduce the
conversion price by any amount for any period of at least 20 days, in which case
Alexion will give at least 15 days' notice of the reduction. Alexion may, at its
option, make reductions in the conversion price, in addition to those described
above, as Alexion's board of directors deems advisable to avoid or diminish any
income tax to holders of common stock resulting from any dividend or
distribution of stock, or rights to acquire stock, or from any event treated as
dividends or distributions of, or rights to acquire, stock for income tax
purposes. See "---United States Federal Income Tax Consequences."
No adjustment in the conversion price will be required unless that adjustment
would require an increase or decrease of at least 1% in the conversion price
then in effect; however, any adjustment that would otherwise be
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required to be made will be carried forward and taken into account in any
subsequent adjustment. Except as stated above, the conversion price will not be
adjusted for the issuance of common stock or any securities convertible into or
exchangeable for common stock or carrying the right to purchase any of the
foregoing.
OPTIONAL REDEMPTION BY ALEXION
The notes are not entitled to any sinking fund. At any time on or after March
20, 2003, Alexion may redeem the notes on at least 30 days' notice as a whole
or, from time to time, in part at the following prices, expressed as a
percentage of the principal amount, together with accrued interest to, but
excluding, the date fixed for redemption:
REDEMPTION
PERIOD PRICE
------ ----------
Beginning March 20, 2003 and ending on March 14, 2004........... 103.286%
Beginning March 15, 2004 and ending on March 14, 2005........... 102.464%
Beginning March 15, 2005 and ending on March 14, 2006........... 101.643%
Beginning March 15, 2006 and ending on March 14, 2007........... 100.822%
and 100% on March 15, 2007. Any accrued interest becoming due on the date fixed
for redemption will be payable to the holders of record on the relevant record
date of the notes being redeemed.
If less than all of the outstanding notes are to be redeemed, the trustee will
select the notes to be redeemed in principal amounts of $1,000 or integral
multiples of $1,000 by lot, pro rata or by another method the trustee considers
fair and appropriate. If a portion of a holder's notes is selected for partial
redemption and that holder converts a portion of that holder's notes, the
converted portion will be deemed to be of the portion selected for redemption.
REPURCHASE AT OPTION OF HOLDERS
Within 15 days after a repurchase event occurs, we are required to give notice
of the repurchase event to the holders of notes. You will have the right, at
your option, to require us to repurchase all or any portion of your notes 40
days after the notice of repurchase event is mailed.
The repurchase price will be 105% of the principal amount of the notes submitted
for repurchase, plus accrued and unpaid interest to, but excluding, the
repurchase date. If a repurchase date is an interest payment date, then the
interest payable on that date will be paid to the holder of record on the
preceding record date.
At our option, instead of paying the repurchase price in cash, we may pay the
repurchase price in common stock, valued at 95% of the average of the closing
prices for the five trading days immediately before and including the third
trading day preceding the repurchase date. The repurchase price may be paid in
shares of common stock only if the following conditions are satisfied:
- such shares have been registered under the Securities Act or are
freely transferable without such registration;
- the issuance of such common stock does not require registration with
or approval of any governmental authority under any state law or any
other federal law, which registration or approval has not been made
or obtained;
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- such shares have been approved for quotation on the Nasdaq National
Market or listing on a national securities exchange; and
- such shares will be issued out of our authorized but unissued common
stock and, upon issuance, will be duly and validly issued and fully
paid and non-assessable and free of any preemptive rights.
A repurchase event will be considered to have occurred if:
(1) our common stock or other common stock into which the notes are
convertible is neither listed for trading on a United States
national securities exchange nor approved for trading on an
established automated over-the-counter trading market in the United
States, or
(2) one of the following "change in control" events occurs:
- any person or group is or becomes the beneficial owner of more
than 50% of the voting power of our outstanding securities
entitled to generally vote for directors;
- our stockholders approve any plan or proposal for our
liquidation, dissolution or winding up;
- we consolidate with or merge into any other person or any
other person merges into Alexion and, as a result, our
outstanding common stock is changed or exchanged for other
assets or securities unless our stockholders immediately
before the transaction own, directly or indirectly,
immediately following the transaction more than 50% of the
combined voting power of the person resulting from the
transaction in substantially the same proportion as their
ownership of our voting stock immediately before the
transaction;
- we convey, transfer or lease all or substantially all of our
assets to any person other than our subsidiaries; or
- the continuing directors do not constitute a majority of our
board of directors at any time.
However, a change in control will not be deemed to have occurred if:
- the last sale price of our common stock for any five trading days
during the 10 trading days immediately before the change in control
is equal to at least 105% of the conversion price, or
- all of the consideration, excluding cash payments for fractional
shares in the transaction constituting the change in control,
consists of common stock traded on a United States national
securities exchange or quoted on the Nasdaq National Market, and as
a result of the transaction the notes become convertible solely into
that common stock.
The term "continuing director" means at any date a member of our board of
directors:
- who is a member of our board of directors on the date hereof; or
- who was nominated or elected by at least a majority of the directors
who were continuing directors at the time of the nomination or
election or whose election to our board of directors was
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recommended by at least a majority of the directors who were
continuing directors at the time of the nomination or election or by
a nominating committee approved by our continuing directors.
Under the above definition of continuing director, if the current board of
directors approved a new director or directors and then resigned, no change in
control would occur.
We will be required to mail you a notice within 15 days after the occurrence of
a repurchase event. The notice must describe, among other things, the repurchase
event, your right to elect repurchase of the notes and the repurchase date. We
must deliver a copy of the notice to the trustee and cause a copy, or a summary
of the notice, to be published in a newspaper of general circulation in New
York, New York. You may exercise your repurchase rights by delivering written
notice to us and the trustee. The notice must be accompanied by the notes duly
endorsed for transfer to Alexion. You must deliver the exercise notice on or
before the close of business on the thirty-fifth calendar day after the
repurchase notice is delivered.
The interpretation of the phrase "all or substantially all" used in the
definition of change in control would likely depend on the facts and
circumstances existing at such time. As a result, there may be uncertainty as to
whether or not a sale or transfer of "all or substantially all" assets has
occurred.
We may not have sufficient cash funds to repurchase the notes upon a repurchase
event. We may elect, subject to certain conditions, to pay the repurchase price
in common stock. Although there are currently no restrictions on our ability to
pay the purchase price, future debt agreements may prohibit us from repaying the
repurchase price in either cash or common stock. If we are prohibited from
repurchasing the notes, we could seek consent from our lenders to repurchase the
notes. If we are unable to obtain their consent, we could attempt to refinance
the notes. If we were unable to obtain a consent or refinance, we would be
prohibited from repurchasing the notes. If we were unable to repurchase the
notes upon a repurchase event, it would result in an event of default under the
indenture. An event of default under the indenture could result in a further
event of default under our other then-existing debt. In addition, the occurrence
of the repurchase event may be an event of default under our other debt. As a
result, we would be prohibited from paying amounts due on the notes under the
subordination provisions of the indenture.
The change in control feature may not necessarily afford you protection in the
event of a highly leveraged transaction, a change in control or similar
transactions involving Alexion. We could, in the future, enter into
transactions, including recapitalizations, that would not constitute a change in
control but that would increase the amount of our senior indebtedness or other
debt. We are not prohibited from incurring senior indebtedness or debt under the
indenture. If we incur significant amounts of additional debt, this could have
an adverse effect on our ability to make payments on the notes. In addition, our
management could undertake leveraged transactions that could constitute a change
in control. The board of directors does not have the right under the indenture
to limit or waive the repurchase right in the event of these types of leveraged
transaction.
The requirement to repurchase notes upon a repurchase event could delay, defer
or prevent a change of control. As a result, the repurchase right may
discourage:
- a merger, consolidation or tender offer;
- the assumption of control by a holder of a large block of our
shares; and
- the removal of incumbent management.
The repurchase feature was a result of negotiations between Alexion and the
selling securityholders. The repurchase feature is not the result of any
specific effort to accumulate shares of common stock or to obtain control of
Alexion by means of a merger, tender offer or solicitation, or part of a plan by
Alexion to adopt a
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series of anti-takeover provisions. We have no present intention to engage in a
transaction involving a change of control, although it is possible that it would
decide to do so in the future.
The Securities Exchange Act of 1934 and the rules thereunder require the
distribution of specific types of information to security holders in the event
of issuer tender offers. These rules may apply in the event of a repurchase. We
will comply with these rules to the extent applicable.
SUBORDINATION OF THE NOTES
The indebtedness evidenced by the notes is subordinated to the extent provided
in the indenture to the prior payment in full in cash or other payment
satisfactory to holders of existing and future senior indebtedness of all senior
indebtedness. Upon any distribution of our assets, upon any dissolution, winding
up, liquidation or reorganization, payments on the notes will be subordinated in
right of payment to the prior payment of senior indebtedness in full in cash or
other payment satisfactory to holders of senior indebtedness.
In the event of any acceleration of the notes because of an event of default,
holders of any senior indebtedness would be entitled to payment in full in cash
or other payment satisfactory to holders of senior indebtedness of all senior
indebtedness before the holders of the notes are entitled to receive any payment
or distribution.
We are required to promptly notify holders of designated senior indebtedness if
payment of the notes is accelerated because of an event of default.
As a result of these subordination provisions, in the event of our bankruptcy,
dissolution or reorganization, holders of senior indebtedness may receive more,
ratably, and holders of the notes may receive less, ratably, than our other
creditors.
We also may not make payment on the notes if:
- a default in the payment of senior indebtedness occurs and is
continuing beyond any grace period,
- any other default occurs and is continuing with respect to
designated senior indebtedness that permits holders or their
representatives of designated senior indebtedness to accelerate its
maturity, and the trustee receives a payment blockage notice from us
or some other person permitted to give the notice under the
indenture, or
- any judicial proceeding shall be pending with respect to any payment
default or non-payment default.
We may and shall resume payments on the notes:
- in case of a payment default, the date on which the default is cured
or waived or ceases to exist, and
- in case of a nonpayment default, the earlier of the date on which
the default is cured or waived or ceases to exist or 179 days after
the receipt of the payment blockage notice.
Any number of additional payment blockage periods may be commenced during an
existing payment blockage period; PROVIDED, HOWEVER, that no such additional
payment blockage period shall extend beyond the initial payment blockage period.
Notwithstanding anything in the subordination provisions of the indenture or the
notes to the contrary, (x) in no event will a payment blockage period extend
beyond 179 days from the date of
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the payment blockage notice in respect thereof was given and (y) there shall be
a period of at least 181 consecutive days in each 360-day period when no payment
blockage period is in effect. No nonpayment default that existed or was
continuing on the date of delivery of any payment blockage notice to the trustee
shall be the basis for a subsequent payment blockage notice.
The subordination provisions will not prevent the occurrence of any event of
default under the notes.
If the trustee, any paying agent or any holder receives any payment or
distribution of assets in contravention of these subordination provisions before
all senior indebtedness is paid in full in cash or other payment satisfactory to
holders of senior indebtedness, then such payment or distribution will be held
in trust for the holders of senior indebtedness to the extent necessary to make
payment in full in cash or payment satisfactory to the holders of senior
indebtedness of all unpaid senior indebtedness.
A holder of notes by its acceptance of notes agrees to be bound by the
subordination provisions in the indenture and authorizes and expressly directs
the trustee, on its behalf, to take such action as may be necessary or
appropriate to effectuate the subordination provided for in the indenture and
appoints the trustee its attorney-in-fact for this purpose.
DEFINITIONS
"DESIGNATED SENIOR INDEBTEDNESS" means any senior indebtedness that expressly
provides that it is "designated senior indebtedness."
"INDEBTEDNESS" with respect to any person means:
(1) all obligations
- for borrowed money,
- evidenced by a note, debenture, bond or written instrument,
- in respect of leases required, in conformity with generally
accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet,
- all obligations and other liabilities under any lease or
related document in connection with the lease of real property
which provides that such person is contractually obligated to
purchase or cause a third party to purchase the leased
property and as a result guarantee a minimum residual value of
the leased property to the lessor and the obligations of such
person under such lease or related document to purchase or to
cause a third party to purchase such leased property, or
- in respect of letters of credit, local guarantees or bankers'
acceptances;
(2) all obligation of others of the type described in clause (1) above
or clause (3), (4) or (5) below assumed by or guaranteed or in
effect guaranteed by such person;
(3) all obligations secured by a mortgage, pledge or similar arrangement
encumbering property or assets;
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(4) all obligations under interest rate and currency swap agreements,
cap, floor and collar agreements, spot and forward contracts and
similar agreements and arrangements; and
(5) all obligations under deferrals or renewals of (1) through (4)
above.
"SENIOR INDEBTEDNESS" means the principal, premium, if any, and interest,
including bankruptcy interest and fees, and rent payable on all our
indebtedness, whether outstanding on the date of the indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by us, including
all renewals or extensions.
However, senior indebtedness shall not include:
- indebtedness evidenced by the notes,
- indebtedness to any of our subsidiaries, except if it is pledged as
security for any senior indebtedness,
- our accounts payable to trade creditors arising in the ordinary
course of business, and
- any indebtedness that expressly provides that it shall not be senior
in right of payment to, or on the same basis with, or is
subordinated or junior to, the notes.
As of April 30, 2000, we had approximately $4.5 million of indebtedness
outstanding that would have constituted senior indebtedness. The indenture will
not limit the amount of additional indebtedness, including senior indebtedness,
which we can create, incur, assume or guarantee, nor will the indenture limit
the amount of indebtedness or other liabilities that any subsidiary can create,
incur, assume or guarantee. We are obligated to pay compensation to the trustee
and to indemnify the trustee against certain losses, liabilities or expenses
incurred by it in connection with its duties relating to the notes. The
trustee's claims for such payments will generally be senior to those of the
holders of the notes in respect to all funds collected and held by the trustee.
SATISFACTION AND DISCHARGE
We may be discharged from our obligations on the notes if they mature within six
months or will be redeemed within one year and we deposit with the trustee
enough cash and/or U.S. government obligations to pay all the principal,
premium, if any, and interest due to the stated maturity date or redemption date
of the notes.
DEFEASANCE
The indenture also contains a provision that permits us to elect:
- to be discharged from all of our obligations, subject to limited
exceptions, with respect to the notes then outstanding; and/or
- to be released from our obligations under the covenants relating to
the required offer to repurchase upon a repurchase event,
maintenance of our corporate existence and reports to holders.
To make either of the above elections, we must deposit in trust with the trustee
enough money to pay in full the principal, premium, if any, and interest on the
notes. This amount may be made in cash and/or U.S. government obligations. As a
condition to either of the above elections, we must deliver to the trustee an
opinion of counsel that the holders of the notes will not recognize income, gain
or loss for Federal income tax purposes as a result of the action. If we elect
to be discharged from all of our obligations as outlined above in
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the first bullet point in this section, the holders of the notes will not be
entitled to the benefits of the indenture, except for registration of transfer
and exchange of notes and replacement of lost, stolen or mutilated notes.
EXCHANGE AND TRANSFER
Notes may be transferred or exchanged at the office of the security registrar or
at the office of any transfer agent designated by us. We will not impose a
service charge for any transfer or exchange, but we may require holders to pay
any tax or other governmental charges associated with any transfer or exchange.
In the event of any potential redemption of the notes, we will not be required
to:
- issue, authenticate or register the transfer of or exchange any note
during a period beginning at the opening of business 15 days before
the mailing of a notice of redemption and ending at the close of
business on the day of the mailing, or
- register the transfer of or exchange any note selected for
redemption, in whole or in part, except the unredeemed portion of
notes being redeemed in part.
We have initially appointed the trustee as the security registrar and transfer
agent. We may designate additional transfer agents or change transfer agents or
change the office of the transfer agent. However, we will be required to
maintain a transfer agent in the place of payment for the notes.
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with or merge into any other person, in a transaction in
which we are not the surviving corporation, or convey, transfer or lease our
properties and assets substantially as an entirety to, any person, unless:
- the successor, if any, is a U.S. corporation, limited liability
company, partnership, trust or other business entity,
- the successor assumes our obligations under the notes, the indenture
and the registration rights agreement,
- immediately after giving effect to the transaction, no default or
event of default shall have occurred and be continuing, and
- certain other conditions are met.
EVENTS OF DEFAULT
The indenture defines an event of default with respect to the notes as one or
more of the following events:
(1) our failure to pay principal of or any premium on the notes when
due,
(2) our failure to pay any interest on the notes for 30 days when due,
(3) our failure to perform any other covenant in the indenture continued
for 90 days after being given the notice required in the indenture,
and
(4) our bankruptcy, insolvency or reorganization.
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If an event of default, other than an event of default described in clause (4)
above, occurs and continues, either the trustee or the holders of at least 25%
in aggregate principal amount of the outstanding notes may declare the principal
amount including any accrued and unpaid interest on the notes to be due and
payable immediately. If an event of default described in clause (4) above
occurs, the principal amount of all the notes will automatically become
immediately due and payable. Any payment by us on the notes following any
acceleration will be subject to the subordination provisions described above
under "-Subordination of the Notes."
After acceleration but before a judgment or decree of the money due in respect
of the notes has been obtained, the holders of a majority in aggregate principal
amount of the outstanding notes may rescind such acceleration and its
consequences if all events of default, other than the non-payment of accelerated
principal, or other specified amount, have been cured or waived.
Other than the duty to act with the required care during an event of default,
the trustee will not be obligated to exercise any of its rights or powers at the
request of the holders unless the holders offer the trustee reasonable
indemnity. Generally, the holders of a majority in aggregate principal amount of
the notes will 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.
A holder will have the right to begin a proceeding under the indenture, or for
the appointment of a receiver or a trustee, or for any other remedy under the
indenture only if:
(1) the holder gives to the trustee written notice of a continuing event
of default,
(2) holders of at least 25% in aggregate principal amount of notes then
outstanding made a written request to the trustee to pursue the
remedy,
(3) such holder or holders offer to the trustee indemnity satisfactory
to the trustee against any loss, liability or expense,
(4) the trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity, and
(5) during such 60-day period the holders of a majority in aggregate
principal amount of the notes then outstanding do not give the
trustee a direction inconsistent with the request.
Holders may, however, sue to enforce the payment of principal, premium or
interest on or after the due date or their right to convert without following
the procedures listed in (1) through (4) above.
We will furnish the trustee an annual statement by our officers as to whether or
not we are in default in the performance of the indenture and, if so, specifying
all known defaults.
MODIFICATION AND WAIVER
We and the trustee may make modifications and amendments to the indenture with
the consent of the holders of a majority in aggregate principal amount of the
outstanding notes affected by the modification or amendment. However, neither we
nor the trustee may make any modification or amendment without the consent of
the holder of each outstanding note affected by the modification or amendment if
such modification or amendment would:
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- change the stated maturity of the notes,
- reduce the principal, premium, if any, or interest on the notes,
- change the place of payment from New York, New York or the currency
in which the notes are payable,
- waive a default in payment of the principal of or interest on any
note,
- impair the right to sue for any payment after the stated maturity or
redemption date,
- modify the subordination provisions in a materially adverse manner
to the holders,
- adversely affect the right to convert the notes, or
- change the provisions in the indenture that relate to modifying or
amending the indenture.
NOTICES
Notices to holders will be given by mail to the addresses of the holders in the
security register.
GOVERNING LAW
The indenture and the notes will be governed by, and construed under, the law of
the State of New York, without regard to conflicts of laws principles.
REGARDING THE TRUSTEE
The indenture limits the right of the trustee, should it become a creditor of
Alexion, to obtain payment of claims or secure its claims. The trustee is
permitted to engage in certain other transactions. However, if the trustee
acquires any conflicting interest, and there is a default under the notes, the
trustee must eliminate the conflict or resign.
REGISTRATION RIGHTS
The following summary of the registration rights provided in the registration
rights agreement is not complete. You should refer to the registration rights
agreement for a full description of the registration rights that apply to the
notes and common stock into which the notes are convertible.
Pursuant to a registration rights agreement dated March 8, 2000 between Alexion
and the initial purchasers of the notes, we filed a shelf registration
statement, of which this prospectus is a part, with the Securities and Exchange
Commission to register resales of the notes and the shares of common stock into
which the notes are convertible (referred to as registrable securities). We will
use our reasonable best efforts to have this shelf registration statement
declared effective as soon as practicable and, in any event, By September 4,
2000, and to keep it effective until the earliest of (1) March 8, 2002, (2) the
date when all registrable securities shall have been registered under the
Securities Act of 1933 and disposed of, and (3) the date on which all
registrable securities are eligible to be sold to the public pursuant to Rule
144(k) under the Securities Act of 1933 (such shortest time period referred to
as the effectiveness period). A holder of registrable securities that sells
registrable securities pursuant to the shelf registration statement generally
will be required to provide information about itself and the specifics of the
sale, be named as a selling security holder in the related
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prospectus and deliver a prospectus to purchasers, be subject to relevant civil
liability provisions under the Securities Act of 1933 in connection with such
sales and be bound by the provisions of the registration rights agreement which
are applicable to such holder (including certain indemnification obligations).
If we fail to comply with the above provisions of the registration rights
agreement, liquidated damages will become payable in respect of the registrable
securities as follows:
(1) if the shelf registration statement is not declared effective by the
SEC on or prior to the 180th day following March 8, 2000, then
commencing on day after such date, liquidated damages shall accrue
on the registrable securities at a rate of 0.50% per annum on the
amount of registrable securities for the first 90 days immediately
following, such liquidated damages increasing by an additional 0.50%
per annum at the beginning of each subsequent 90-day period; and
(2) if the shelf registration statement has been declared effective and
the shelf registration ceases to be effective at any time during the
effectiveness period (other than for permitted suspension, as
described below), then liquidated damages shall accrue on the
registrable securities at a rate of 0.50% per annum on the amount of
registrable securities for the first 90 days commencing on the day
the shelf registration ceases to be effective, such liquidated
damages increasing by an additional 0.50% per annum at the beginning
of each such subsequent 90-day period;
PROVIDED, HOWEVER, that liquidated damages on the registrable securities may not
accrue under more than one of the foregoing clauses (1) or (2) at any one time
and at no time shall the aggregate amount of liquidated damages accruing exceed
in the aggregate 1.0% per annum of the amount of registrable securities;
PROVIDED, FURTHER, HOWEVER, that (a) upon the effectiveness of the shelf
registration as required hereunder (in the case of clause (1) above), or (b)
upon the effectiveness of a shelf registration which had ceased to remain
effective (in the case of (2) above), liquidated damages on the registrable
securities as a result of such clause (or the relevant subclause thereof), as
the case may be, shall cease to accrue. It is understood and agreed that,
notwithstanding any provision to the contrary, so long as any registrable
security is then covered by an effective shelf registration statement, no
liquidated damages shall accrue on such registrable security.
"AMOUNT OF REGISTRABLE SECURITIES" means (a) with respect to the notes, the
aggregate principal amount of all such notes outstanding, (b) with respect to
the shares of common stock into which the notes are convertible, the aggregate
number of such shares of common stock outstanding multiplied by the conversion
price (as defined in the indenture relating to the notes) or, if no notes are
then outstanding, the last conversion price that was in effect under such
indenture when any such notes were last outstanding, and (c) with respect to
combinations thereof, the sum of (a) and (b) for the relevant registrable
securities.
We shall have the right to suspend the effectiveness of the shelf registration
statement for up to 30 consecutive days in any 90 day period, and for up to a
total of 60 days in any 365 day period, without being required to pay liquidated
damages.
Any amounts of liquidated damages due pursuant to clause (1), (2) or (3) above
will be payable in cash on the same dates as the original interest payment dates
as the notes.
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RATIO OF EARNINGS TO FIXED CHARGES
Our deficiency in earnings to cover fixed charges for each of the periods
indicated is as follows (in thousands):
<TABLE>
<CAPTION>
Six Months Ended January 31, Year Ended July 31,
- ------------------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
$(8,839) $(8,555) $(6,426) $(7,893) $(7,278) $(5,459) $(7,148)
</TABLE>
The ratio of earnings to fixed charges is computed by dividing (a) income before
interest expense, income taxes and other fixed charges by (b) fixed charges
including interest expense, amortization of debt issuance costs and the portion
of rent expense which represents interest. For each of the periods indicated
above, earnings were insufficient to cover fixed charges by the amounts noted
above. The deficiency in earnings to cover fixed charges is computed by adding
net loss to the portion of rent expense which represents interest for all
periods presented.
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UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material US federal income tax consequences
relating to the purchase, ownership, and disposition of the notes and of common
stock into which notes may be converted, but does not purport to be a complete
analysis of all the potential tax consequences that may be material to an
investor based on his or her particular tax situation (such as the alternative
minimum tax provisions of the Code). This summary is based on the provisions of
the Internal Revenue Code of 1986, as amended, or the Code, the applicable
Treasury Regulations, promulgated or proposed thereunder, or Treasury
Regulations, judicial authority and current administrative rulings and practice,
all of which are subject to change, possibly on a retroactive basis. This
summary deals only with the initial beneficial owner of a note or common stock
that will hold notes and common stock into which notes may be converted as
"capital assets," within the meaning of Section 1221 of the Code, and does not
address tax consequences applicable to US Holders that may be subject to special
tax rules, such as financial institutions, tax-exempt organizations,
expatriates, pension funds, insurance companies, dealers in securities or
foreign currencies, persons that will hold notes as a position in a hedging
transaction, "straddle," "conversion transaction" or other risk reduction
transaction for tax purposes, persons who hold notes through a partnership or
other pass through entity, or persons that have a "functional currency" other
than the US dollar (except as disclosed below under "Non-US Holders"). This
summary discusses the tax consequences applicable to the holders who purchase
the notes at their "issue price" as defined in Section 1273 of the Code (i.e.,
the first price at which a substantial portion of the notes is sold to the
public) and generally does not discuss the tax consequences applicable to
subsequent purchasers of the notes. Alexion has not sought any ruling from the
Internal Revenue Service, or IRS, with respect to the statements made and the
conclusions reached in the following summary, and there can be no assurance that
the IRS will agree with such statements and conclusions. Moreover, this
discussion does not address the effect of any applicable state, local or foreign
tax laws. INVESTORS CONSIDERING THE PURCHASE OF NOTES SHOULD CONSULT THEIR OWN
TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE US FEDERAL INCOME AND ESTATE
TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING
UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY
APPLICABLE TAX TREATY.
As used herein, the term "US Holder" means a holder of a note or common stock
that is for US federal income tax purposes, (i) a citizen or resident of the US,
(ii) a corporation created or organized in or under the laws of the US or any
political subdivision thereof, (iii) an estate, the income of which is subject
to US federal income taxation regardless of its source, or (iv) (a) a trust, the
administration or which is subject to the primary supervision of a court within
the US and which has one or more US persons with authority to control all
substantial decisions, or (b) a trust in existence on August 20, 1996 and has
elected to continue to be treated as a US trust. As used herein, the term
"Non-US Holder" means a holder of a note or common stock that is not a US
Holder.
US HOLDERS
The following is a summary of the principal US federal income tax consequences
resulting from the ownership and disposition of the notes and common stock by US
Holders.
PAYMENT OF INTEREST
Interest on a note generally will be includable in the income of a US Holder as
ordinary income at the time such interest is received or accrued, in accordance
with such US Holder's method of accounting for US federal income tax purposes.
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SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a note, a US Holder generally will
realize and recognize capital gain or loss equal to the difference between the
amount realized on the sale, exchange or redemption and the US Holder's tax
basis in such note. For these purposes, the amount realized on the sale,
exchange or redemption of the notes does not include any amount attributable to
accrued but unpaid interest, which will be taxable as such unless previously
taken into account. A US Holder's tax basis in a note generally will be the US
dollar value of the purchase price of such note on the date of purchase. Gain or
loss so recognized will generally be capital gain or loss and will be long-term
capital gain or loss if, at the time of the sale, exchange or redemption, the
note was held for more than one year.
In regard to a note purchased with "market discount" (as defined below), a US
Holder's tax basis in a note generally will equal the purchase price paid
therefor, increased by market discount previously included in income by such US
Holder and decreased by any amortized premium applied to reduce interest and any
principal payments on the note. Upon the sale, exchange or retirement, including
redemption, of a note, a US Holder of a note generally will recognize gain or
loss equal to the difference between the amount of cash and the fair market
value of other property received from the sale, exchange or retirement of the
note (other than in respect of accrued and paid interest on the note) and the
adjusted tax basis in the note. Such gain or loss generally will be capital gain
or loss, except to the extent of any accrued market discount, which will be
taxed as ordinary income. Amounts received attributable to accrued but unpaid
interest will be treated as ordinary interest income.
CONSTRUCTIVE DIVIDENDS ON NOTES
The conversion price of the notes is subject to adjustment under certain
circumstances. Section 305 of the Code treats as a distribution taxable as a
dividend (to the extent of the Company's current or accumulated earnings and
profits) certain actual or constructive distributions of stock with respect to
stock or convertible securities. Under Treasury regulations, an adjustment of
conversion price may, under certain circumstances, be treated as a constructive
dividend to the extent it increases the proportional interest of a US Holder
of a note in our fully diluted common stock, whether or not the holder ever
converts the notes into our common stock. Generally, a holder's tax basis in a
note will be increased by the amount of any such constructive dividend.
Similarly, a failure to adjust the conversion price of the notes to reflect a
stock dividend or similar event could in some circumstances give rise to
constructive dividend income to US Holders of common stock.
CONVERSION OF THE NOTES
A US Holder generally will not recognize any income, gain or loss upon
conversion of a note into common stock, except with respect to cash received in
lieu of a fractional share of common stock, and except to the extent that the
common stock issued upon conversion is treated as attributable to accrued
interest on the note. A US Holder's tax basis in the common stock received on
conversion of a note will be the same as such US Holder's adjusted tax basis in
the note at the time of conversion reduced by any basis allocable to a
fractional share. The holding period for the common stock received on conversion
will generally include the holding period of the note converted. However, a
holder's tax basis in shares of common stock attributable to accrued interest
generally will equal the amount of such interest included in income and the
holding period will begin on the day following the date of conversion.
Cash received in lieu of a fractional share of common stock upon conversion will
be treated as a payment in exchange for the fractional share of common stock.
Accordingly, the receipt of cash in lieu of a fractional share of common stock
generally will result in capital gain or loss (measured by the difference
between the cash received for the fractional share and the US Holder's adjusted
tax basis in the fractional share). The fair
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market value of the shares of common stock received which is attributable to
accrued interest will be taxable as ordinary interest income.
A US Holder of a note with market discount will not recognize income on the
conversion of the note with respect to such market discount that has accrued but
has not been taken into account. Market discount not recognized on such
conversion will carry over to the common stock so acquired and will be
recognized as ordinary income to the extent of gain recognized upon the
disposition of such common stock, including any deemed disposition of fractional
shares of common stock for cash at the time of conversion.
DIVIDENDS ON COMMON STOCK
Generally, distributions will be treated as a dividend, subject to tax as
ordinary income, to the extent of Alexion's current or accumulated earnings and
profits as of the year of distribution, then as a tax-free return of capital to
the extent of the US Holder's tax basis in the common stock and thereafter as
gain from the sale of exchange of such stock.
In general, a dividend distribution to a corporate US Holder may qualify for the
70% dividends received deduction if the US Holder owns less than 20% of the
voting power and value of our stock (other than any non-voting, non-convertible,
non-participating preferred stock). A corporate US Holder that owns 20% or more
of the voting power and value of our stock (other than any nonvoting,
non-convertible, non-participating preferred stock) generally will qualify for
an 80% dividends received deduction.
SALE OF COMMON STOCK
Upon the sale or exchange of common stock, a US Holder generally will recognize
capital gain or loss equal to the difference between (i) the amount of cash and
the fair market value of any property received upon the sale or exchange and
(ii) such US Holder's adjusted tax basis in the common stock. Such capital gain
or loss will be long-term if the US Holder's holding period is more than one
year and will be short-term if the holding period is equal to or less than one
year. In the case of certain noncorporate taxpayers, including individuals,
long-term capital gains are taxed at a maximum rate of 20% and short-term
capital gains are taxed at a maximum rate of 39.6%. A US Holder's basis and
holding period in common stock received upon conversion of a note are determined
as discussed above under "Description of Notes---Conversion of the Notes."
Corporate taxpayers are subject to a maximum regular tax rate of 35% on all
capital gains and ordinary income.
MARKET DISCOUNT
If a US Holder purchases a note for an amount that is less than its "stated
redemption price at maturity" (which is the stated principal amount), the amount
of the difference will be treated as "market discount" for federal income tax
purposes unless such difference is less than a specified de minimis amount.
Under the de minimis exception, a note is considered to have no market discount
if the excess of the stated redemption price at maturity of the note over the
US Holder's tax basis in such note immediately after its acquisition is less
than 0.25% of the stated redemption price at maturity of the note multiplied by
the number of complete years to the maturity date of the note after the
acquisition date.
Under the market discount rules, a US Holder of a note that does have market
discount is required to treat any principal payment on, or any gain from the
sale, exchange, retirement or other disposition of a note as ordinary income to
the extent of the accrued market discount not previously included in income at
the time of such payment or disposition. In addition, such a US Holder may be
required to defer until maturity of the note or its earlier disposition in a
taxable transaction the deduction of all or a portion of the interest expense on
any indebtedness incurred or continued to purchase or carry such note.
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Any market discount will be considered to accrue ratably during the period from
the date of acquisition to the maturity date of the note, unless the US Holder
elects to accrue the market discount on a constant interest method. A US Holder
of a note may elect to include market discount in income currently as it accrues
(on either a ratable or constant interest method), in which case the rule
described above regarding deferral of interest deductions will not apply. This
election to include market discount in income currently, once made, applies to
all market discount obligation acquired on or after the first taxable year to
which the election applies and may not be revoked without the consent of the
Internal Revenue Service.
In its fiscal year 2000 budget proposal, the Clinton Administration recently
proposed altering the taxation of market discount. Under the proposal, subject
to certain limitations, accrual basis US Holders would be required to include
market discount in income as it accrues. The proposal would affect US Holders of
debt instruments, such as the notes, acquired on or after the date of enactment.
BOND PREMIUM
A US Holder who purchases a note for an amount in excess of its stated
redemption price at maturity will be considered to have purchased the note with
"amortizable bond premium" equal to the amount of such excess. A US Holder
generally may elect to amortize the premium on the constant yield to maturity
method. The amount amortized in any year under such method will be treated as a
reduction of the US Holder's interest income from the note during such year and
will reduce the US Holder's adjusted tax basis in the note by such amount. A
US Holder of a note that does not make the election to amortize the premium will
not reduce its tax basis in the note, and thus effectively will realize a
smaller gain, or a larger loss, on a taxable disposition of the note than it
would have realized had the election been made. The election to amortize the
premium on a constant yield to maturity method, once made, applies to all
debt obligations held or acquired by the electing US Holder on or after the
first day of the first taxable year to which the election applies and may not
be revoked without the consent of the Internal Revenue Service.
NON-US HOLDERS
The following discussions is a summary of the principal US federal income and
estate tax consequences resulting from the ownership of the notes or common
stock by Non-US Holders.
PAYMENT OF INTEREST
Subject to the discussion below of backup withholding, interest paid on the
notes to a Non-US Holder generally will not be subject to US federal income tax
if:
(1) such interest is not effectively connected with the conduct of a trade or
business within the US by such Non-US Holder;
(2) the Non-US Holder does not actually or constructively own 10% or more of
the total voting power of all classes of our stock entitled to vote;
(3) the Non-US Holder is not a controlled foreign corporation that is related
to us through stock ownership (for this purpose, the holder of notes would
be deemed to own constructively the common stock into which it could be
converted);
(4) the Non-US Holder, under penalty or perjury, certifies that the owner is
not a US person and provides the owner's name and address; and
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(5) the Non-US Holder is not a bank receiving interest pursuant to a loan
agreement entered into in the ordinary course of its trade or business.
If certain requirements are satisfied, the certification described in item 4
above may be provided by a securities clearing organization, a bank, or other
financial institution that holds customers' securities in the ordinary course of
its trade or business.
Under Treasury Regulations, which generally are effective for payments made
after December 31, 2000, subject to certain transition rules, the certification
described in clause 4 above may also be provided by a qualified intermediary on
behalf of one or more beneficial owners (or other intermediaries), provided that
such intermediary has entered into a withholding agreement with the IRS and
certain other conditions are met.
A US Holder that is not exempt from tax under these rules will be subject to US
federal income tax withholding at a rate of 30% on payments of interest, unless
the interest is effectively connected with the conduct of a US trade or business
of the holder or a lower treaty rate applies and, in either case, the Non-US
Holder provides us with proper certification as to the holder's exemption from
withholding. If the interest is effectively connected to the conduct of a US
trade or business, it will be subject to the US federal income tax on net income
that applies to US persons generally (and, with respect to corporate holders and
under certain circumstances, the branch profits tax). Non-US Holders should
consult applicable income tax treaties, which may provide different rules.
CONVERSION OF THE NOTES
A Non-US Holder generally will not be subject to US federal income tax on the
conversion of a note into shares of common stock. To the extent a Non-US Holder
receives cash in lieu of a fractional share on conversion, such cash may give
rise to gain that would be subject to the rules described below with respect to
the sale or exchange of a note or common stock.
DIVIDENDS
Subject to the discussion below of backup withholding, dividends, if any, paid
on the common stock to a Non-US Holder generally will be subject to a 30% US
federal withholding tax, subject to reduction for Non-US Holders eligible for
the benefits of certain income tax treaties. Dividends for this purpose may
include stock distributions treated as deemed dividends as discussed in "US
Holders-Constructive Dividends on Notes" above. Currently, for purposes of
determining whether tax is to be withheld at the 30% rate or at a reduced treaty
rate, we will ordinarily presume that dividends paid to an address in a foreign
country are paid to a resident of such country absent knowledge that such
presumption is not warranted. Under Treasury Regulations effective for payments
after December 31, 2000, holders will be required to satisfy certain
certification requirements to claim treaty benefits.
Except to the extent otherwise provided under an applicable tax treaty, a Non-US
Holder generally will be taxed in the same manner as a US Holder on dividends
paid (or deemed paid) that are effectively connected with the conduct of a trade
or business in the US by the Non-US Holder. If such Non-US Holder is a foreign
corporation, it may also be subject to a US branch profits tax on such
effectively connected income at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.
41
<PAGE>
GAIN ON DISPOSITION OF THE NOTES AND COMMON STOCK
A Non-US Holder generally will not be subject to US federal income tax on gain
realized on the sale, exchange or redemption of a note including any gain
representing accrued market discount, or the sale or exchange of common stock,
unless:
(i) in the case of an individual Non-US Holder, such holder is present
in the US for 183 days or more in the year of such sale, exchange or
redemption and certain other requirements are met;
(ii) the Non-US Holder is subject to tax pursuant to the provisions of US
tax law applicable to certain US expatriates; or
(iii) the gain is effectively connected with the conduct of a US trade or
business of the Non-US Holder.
US FEDERAL ESTATE TAX
A note held by an individual who at the time of death is not a citizen or
resident of the US (as specially defined for US federal estate tax purposes)
will not be subject to US federal estate tax if the individual did not actually
or constructively own 10% or more of the total combined voting power of all
classes of stock of Alexion and, at the time of the individual's death, payments
with respect to such note would not have been effectively connected with the
conduct by such individual of a trade or business in the US. Common stock held
by an individual who at the time of death is not a citizen or resident of the US
(as specially defined for US federal estate tax purposes) will be included in
such individual's estate for US federal estate tax purposes, and the rate of tax
applies thereto may be reduced or eliminated if an applicable estate tax treaty
otherwise applies.
BACKUP WITHHOLDING AND INFORMATION REPORTING
US HOLDERS
A US Holder of notes or common stock may be subject to "backup withholding" at a
rate of 31% with respect to certain "reportable payments," including interest
payments, dividend payments and, under certain circumstances, principal payments
on the notes. These backup withholding rules apply if the US Holder, among other
things, (i) fails to furnish a social security number or other taxpayer
identification number ("TIN") certified under penalties of perjury within a
reasonable time after the request therefor, (ii) furnishes an incorrect TIN,
(iii) fails to report properly interest or dividends or (iv) under certain
circumstances, fails to provide a certified statement, signed under penalties of
perjury, that the TIN furnished is the correct number and that such US Holder is
not subject to backup withholding. A US Holder who does not provide Alexion with
its correct TIN may also be subject to penalties imposed by the IRS. Any amount
withheld from a payment to a holder under the backup withholding rules is
creditable against the US Holder's federal income tax liability. Backup
withholding will not apply, however, with respect to payments made to certain
US Holders, including corporations and tax-exempt organizations, provided
their exemption from backup withholdings is properly established. We will
report to US Holders of notes and common stock and to the IRS the amount of
any "reportable payments" for each calendar year and the amount of tax
withheld, if any, with respect to such payments.
NON-US HOLDERS
We must report annually to the IRS and to each Non-US Holder the amount of any
dividends paid to, and tax withheld with respect to, such holder, regardless of
whether any tax was actually withheld on such payments.
42
<PAGE>
Copies of these information returns may also be made available under the
provisions of a specific treaty or agreement to the tax authorities of the
country in which the Non-US Holder resides.
Under current Treasury Regulations, backup withholding and information reporting
will not apply to payments of interest or principal of the notes by us or our
agent to a Non-US Holder if the Non-US Holder certifies as to its Non-US Holder
status under penalties of perjury or otherwise establishes an exemption
(provided that neither we nor our agent has actual knowledge that the holder is
a US person or that the conditions of any other exemptions are not in fact
satisfied). The payment of the proceeds on the disposition of notes or share of
common stock to or through the US office of a US or foreign broker will be
subject to information reporting and backup withholding unless the owner
provides the certification described above or otherwise establishes an
exemption. The proceeds of the disposition by a Non-US Holder of notes or shares
of common stock to or through a foreign office of a broker generally will not be
subject to backup withholding or information reporting. However, if such broker
is a US person, a controlled foreign corporation for US tax purposes, or a
foreign person, 50% or more of whose gross income from all sources for certain
periods is from activities that are effectively connected with a US trade or
business, information reporting requirements, but not backup withholding, will
apply unless such broker has documentary evidence in its files of the holder's
Non-US status and has no actual knowledge to the contrary or unless the
Non-US Holder otherwise establishes an exemption.
New Treasury Regulations, which we refer to as the New Regulations, would
modify the application of information reporting requirements and the backup
withholding tax requirements applicable to Non-US Holders for reportable
payments made after December 31, 2000. In general, the New Regulations do not
significantly alter the current substantive withholding and information
reporting requirements but unify current certification procedures and forms
and clarify reliance standards. Under the New Regulations, special rules
apply which permit the shifting of primary responsibility for withholding to
certain financial intermediaries acting on behalf of beneficial owners. A
Non-US Holder of a note or common stock that is received upon the conversion
of a note should consult with its tax advisor regarding the application of
the backup withholding rule to its particular situation, the availability of
an exemption therefrom, the procedure for obtaining such an exemption, if
available, and the impact of the New Regulations on payments made with
respect to the notes or shares of common stock received upon the conversion
of the notes after December 31, 2000.
43
<PAGE>
PLAN OF DISTRIBUTION
The notes and the underlying common stock are being registered to permit public
secondary trading of the notes and the underlying common stock by the holders
thereof from time to time after the date of this prospectus. We have agreed,
among other things, to bear all expenses (other than underwriting discounts,
selling commissions and fees and expenses of counsel and other advisors to
holders of the notes and the underlying common stock) in connection with the
registration and sale of the notes and the underlying common stock covered by
this prospectus.
We will not receive any of the proceeds from the offering of notes and the
shares of common stock issuable upon conversion thereof by the selling
securityholders. We have been advised by the selling securityholders that the
selling securityholders (and their donees and pledgees) may sell all or a
portion of the notes and shares of common stock beneficially owned by them and
offered hereby from time to time on any exchange on which the securities are
listed on terms to be determined at the times of such sales. The selling
securityholders may also make private sales directly or through a broker or
brokers. Alternatively, any of the selling securityholders may from time to time
offer the notes or shares of common stock beneficially owned by them through
underwriters, dealers or agents, who may receive compensation in the form of
underwriting discounts, commissions or concessions from the selling
securityholders and the purchasers of the notes or shares of common stock for
whom they may act as agent. The aggregate proceeds to the selling
securityholders from the sale of the notes or shares of common stock offered by
them hereby will be the purchase price of such notes or shares of common stock
less discounts and commissions, if any.
Our outstanding common stock is listed for trading on the Nasdaq National
Market. While the notes are eligible for trading on The Portal Market, we do not
expect the notes to remain eligible for trading on that market. We do not intend
to list the notes for trading on any national securities exchange or on the
Nasdaq National Market. We cannot assure you that a trading market for the notes
will develop. If a trading market for the notes fails to develop, the trading
price of the notes may decline.
The notes and the shares of common stock may be sold from time to time in one or
more transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the holders of such securities or by agreement between such
holders and underwriters or dealers who may receive fees or commissions in
connection therewith.
We have agreed not to, and our executive officers and directors will agree that
they will not:
(1) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend or otherwise transfer or
dispose of, directly or indirectly, any shares of our common stock,
or
(2) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership
of our common stock,
whether any transaction described in clause (1) or (2) above is to be settled by
delivery of our common stock or such other securities, in cash or otherwise, for
a 90 day period after March 3, 2000, without the prior written consent of J.P.
Morgan Securities Inc.
Notwithstanding the above, we may, without the consent of J.P. Morgan Securities
Inc.:
(1) issue and sell the notes offered by this prospectus;
44
<PAGE>
(2) issue the common stock issuable upon conversion of the notes;
(3) issue the common stock issuable upon exercise of the warrants
outstanding on the date hereof;
(4) grant options or issue and sell stock upon the exercise of
outstanding stock options or otherwise under our stock option or
employee stock purchase plans; and
(5) issue common stock in connection with a merger or strategic
acquisition.
Notwithstanding the above, our executive officers may, without the consent of
J.P. Morgan Securities Inc.:
(1) sell up to an aggregate of 45,000 shares of common stock for a 90
day period after March 3, 2000;
(2) make bona fide gifts of shares so long as the donees agree to be
bound by the lock-up agreements; and
(3) make transfers to family trusts.
In order to comply with the securities laws of certain states, if applicable,
the notes and shares of common stock will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the notes and shares of common stock may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with.
The notes were originally sold by us to the initial purchasers in March 2000 in
a private placement. We agree to indemnify and hold the initial purchasers
harmless against certain liabilities under the Securities Act that could arise
in connection with the sale of the notes by the initial purchasers. The
Registration Rights Agreement provides for us and the initial purchasers or
selling securityholders to indemnify each other against certain liabilities
arising under the Securities Act.
The selling securityholders and any broker-dealers, agents or underwriters that
participate with the selling securityholders in the distribution of the notes or
shares of common stock may be deemed to be "underwriters" within the meaning of
the Securities Act, in which event any commissions received by such
broker-dealers, agents or underwriters and any profit on the resale of the notes
or shares of common stock purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
45
<PAGE>
LEGAL MATTERS
Fulbright & Jaworski L.L.P., New York, New York, will pass upon the validity of
the securities offered hereby and some other legal matters on behalf of Alexion.
Cahill Gordon & Reindel, New York, New York, will pass upon some legal matters
on behalf of the selling securityholders.
EXPERTS
The audited consolidated financial statements, incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as stated in their report
with respect thereto, and are included herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said report.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information filed by us at the Commission's
public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the regional offices of the Commission located at
Seven World Trade Center, 13th Floor, New York, New York 10048, and 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be also
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and its public reference rooms in New
York, New York and Chicago, Illinois, at prescribed rates. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. Copies of such information may also be inspected at the reading room of
the library of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006. Our filings with the Commission are also
available to the public from commercial document retrieval services and at the
Commission's web site at "http://www.sec.gov."
We "incorporate by reference" the information we file with the Commission (File
No. 0-27756), which means that we can disclose important information to you by
referring you to another document we filed with the Commission. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the Commission will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any filings made with the Commission under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended, after the date of
this prospectus but before the end of any offering made under this prospectus:
- our proxy statement, filed on January 10, 2000;
- our current reports on Form 8-K, filed on December 3, 1999, January
18, 2000 and February 25, 2000;
- our quarterly report on Form 10-Q for the quarterly periods ended
October 31, 1999 and January 31, 2000; filed on December 13, 1999
and March 15, 2000, respectively;
- our annual report on Form 10-K for the fiscal year ended July 31,
1999, as amended on Form 10-K/A, filed on November 19, 1999;
- our registration statement on Form 8-A, filed on February 21, 1997;
and
46
<PAGE>
- our registration statement on Form 8-A, filed on February 12, 1996.
You should read the information relating to us in this prospectus together with
the information in the documents incorporated by reference.
Any statement contained in a document incorporated by reference herein, unless
otherwise indicated therein, speaks as of the date of the document. Statements
contained in this prospectus may modify or replace statements contained in the
documents incorporated by reference.
We will furnish without charge to you, upon written or oral request, a copy of
any or all of the documents described above, except for exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents. Requests should be addressed to: Alexion Pharmaceuticals, Inc.,
25 Science Park, New Haven, Connecticut 06511, (203) 776-1790, Attention: David
W. Keiser, Executive Vice President and Chief Operating Officer.
47
<PAGE>
ALEXION PHARMACEUTICALS, INC.
$120,000,000 5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2007
1,127,555 SHARES COMMON STOCK
[LOGO]
-----------------
PROSPECTUS
-----------------
Until June 3, 2000 (25 days from the date of this prospectus), all dealers that
effect transactions in these securities, where or not participating in the
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
May , 2000
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth Alexion Pharmaceuticals, Inc. (the "Company")
estimates (other than the SEC registration fee) of the expenses in connection
with the issuance and distribution of the shares of common stock being
registered. None of the following expenses are being paid by the selling
stockholders.
SEC registration fee $ 31,680
Legal fees and expenses $121,500
Accounting fees and expenses $ 49,400
Miscellaneous expenses $108,420
--------
Total: $311,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a
Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. A
corporation may, in advance of the final disposition of any civil, criminal,
administrative or investigative action, suit or proceeding, pay the expenses
(including attorneys' fees) incurred by any officer, director, employee or agent
in defending such action, provided that the director or officer undertakes to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation. A corporation may indemnify such person
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
A Delaware corporation may indemnify officers and directors in an action by or
in the right of the corporation to procure a judgment in its favor under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses (including attorneys fees) which he actually and reasonably
incurred in connection therewith. The indemnification provided is not deemed to
be exclusive of any other rights to which an officer or director may be entitled
under any corporation's by-law, agreement, vote or otherwise.
In accordance with Section 145 of the DGCL, Section EIGHTH of the Company's
Certificate of Incorporation, as amended (the "Certificate") provides that the
Company shall indemnify each person who is or was a director, officer, employee
or agent of the Company (including the heirs, executors, administrators or
estate of such person) or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to the fullest extent permitted. The
indemnification provided by the Certificate shall not be deemed exclusive of any
other rights to which any of those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement,
II-1
<PAGE>
vote of shareholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. Expenses (including attorneys'
fees) incurred in defending a civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the indemnified person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Company. Section NINTH of the Certificate provides that a director of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the DGCL, or (iv) for any transaction from which the director derived an
improper personal benefit.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
4.1 Indenture under which Notes were issued.+
4.2 Forms of Note.+
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality. +
10.1 Form of Agreement of Lease, between We Knotter, L.L.C. and Alexion
Pharmaceuticals, Inc.+
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1). +
23.2 Consent of Arthur Andersen LLP. +
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility of the Trustee on Form T-1. +
- --------------------
+ Filed herewith.
(b) Financial Statement Schedules.
None.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
II-2
<PAGE>
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment of this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement of any
material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report, to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
(5) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW HAVEN
AND STATE OF CONNECTICUT ON THE 10TH DAY OF MAY, 2000.
ALEXION PHARMACEUTICALS, INC.
By: /s/ LEONARD BELL
-------------------------------------
Leonard Bell, M.D.
President, Chief Executive Officer,
Secretary and Treasurer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints LEONARD BELL, M.D. and DAVID W. KEISER, or either
of them, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/ LEONARD BELL President, Chief Executive Officer, May 10, 2000
- ---------------------------- Secretary, Treasurer and Director
Leonard Bell, M.D. (principal executive officer)
/s/ DAVID W. KEISER Executive Vice President and May 10, 2000
- ---------------------------- Chief Operating Officer
David W. Keiser (principal financial officer)
/s/ BARRY P. LUKE Vice President of Finance May 10, 2000
- ---------------------------- and Administration (principal
Barry P. Luke accounting officer)
/s/ JOHN H. FRIED Chairman of the Board of Directors May 10, 2000
- ----------------------------
John H. Fried, Ph.D.
/s/ JERRY T. JACKSON Director May 10, 2000
- ----------------------------
Jerry T. Jackson
II-4
<PAGE>
/s/ MAX LINK Director May 10, 2000
- ----------------------------
Max Link, Ph.D.
/s/ JOSEPH A. MADRI Director May 10, 2000
- ----------------------------
Joseph A. Madri, Ph.D., M.D.
/s/ LEONARD MARKS Director May 10, 2000
- ----------------------------
Leonard Marks, Jr., Ph.D.
/s/ R. DOUGLAS NORBY Director May 10, 2000
- ----------------------------
R. Douglas Norby
/s/ ALVIN S. PARVEN Director May 10, 2000
- ----------------------------
Alvin S. Parven
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
4.1 Indenture under which Notes were issued.+
4.2 Forms of Note.+
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality. +
10.2 Form of Agreement of Lease, between We Knotter, L.L.C. and Alexion
Pharmaceuticals, Inc.+
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1). +
23.2 Consent of Arthur Andersen LLP. +
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility of the Trustee on Form T-1. +
- --------------------
+ Filed herewith.
II-6
<PAGE>
Exhibit 4.1
================================================================================
ALEXION PHARMACEUTICALS, INC.
and
THE CHASE MANHATTAN BANK
as
Trustee
-------------------------------
INDENTURE
Dated as of March 8, 2000
-------------------------------
$ 120,000,000 Principal Amount*
5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2007
================================================================================
- ----------------
* Plus an additional $30,000,000 issuable at the option of the Initial
Purchasers as described herein.
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310(a)(1) .............................................. 7.10
(a)(2) .............................................. 7.10
(a)(3) .............................................. N.A.
(a)(4) .............................................. N.A.
(a)(5) .............................................. N.A.
(b) ................................................. 7.08; 7.10; 13.02
(c) ................................................. N.A.
311(a) ................................................. 7.11
(b) ................................................. 7.11
(c) ................................................. N.A.
312(a) ................................................. 2.05
(b) ................................................. 13.03
(c) ................................................. 13.03
313(a) ................................................. 7.06
(b)(1) .............................................. N.A.
(b)(2) .............................................. 7.06
(c) ................................................. 7.06; 13.02
(d) ................................................. 7.06
314(a) ................................................. 4.02
(b) ................................................. N.A.
(c)(1) .............................................. 13.04
(c)(2) .............................................. 13.04
(c)(3) .............................................. N.A.
(d) ................................................. N.A.
(e) ................................................. 13.05
(f) ................................................. N.A.
315(a) ................................................. 7.01(b)
(b) ................................................. 7.05; 13.02
(c) ................................................. 7.01(a)
(d) ................................................. 7.01(c)
(e) ................................................. 6.11
316(a)(last sentence) .................................. 2.09
(a)(1)(A) ........................................... 6.05
(a)(1)(B) ........................................... 6.04
(a)(2) .............................................. N.A.
(b) ................................................. 6.07
317(a)(1) .............................................. 6.08
(a)(2) .............................................. 6.09
(b) ................................................. 2.04
318(a) ................................................. 13.01
<PAGE>
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions ............................................. 1
SECTION 1.02. Other Definitions ....................................... 5
SECTION 1.03. Incorporation by Reference of Trust Indenture Act ....... 6
SECTION 1.04. Rules of Construction ................................... 6
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating ......................................... 7
SECTION 2.02. Execution and Authentication ............................ 7
SECTION 2.03. Registrar, Paying Agent and Conversion Agent ............ 8
SECTION 2.04. Paying Agent to Hold Money in Trust ..................... 8
SECTION 2.05. Securityholder Lists .................................... 9
SECTION 2.06. Transfer and Exchange ................................... 9
SECTION 2.07. Replacement Securities .................................. 9
SECTION 2.08. Outstanding Securities .................................. 10
SECTION 2.09. Securities Held by the Company or an Affiliate .......... 10
SECTION 2.10. Temporary Securities .................................... 10
SECTION 2.11. Cancellation ............................................ 10
SECTION 2.12. Defaulted Interest ...................................... 11
SECTION 2.13. CUSIP Numbers ........................................... 11
SECTION 2.14. Deposit of Moneys ....................................... 11
SECTION 2.15. Book-Entry Provisions for Global Securities ............. 11
SECTION 2.16. Special Transfer Provisions ............................. 12
SECTION 2.17. Restrictive Legends ..................................... 15
ARTICLE THREE
REDEMPTION; REPURCHASE
SECTION 3.01. Notices to Trustee ...................................... 15
SECTION 3.02. Selection of Securities to Be Redeemed .................. 16
SECTION 3.03. Notice of Redemption .................................... 16
SECTION 3.04. Effect of Notice of Redemption .......................... 17
SECTION 3.05. Deposit of Redemption Price ............................. 17
SECTION 3.06. Securities Redeemed in Part ............................. 17
SECTION 3.07. Repurchase at Option of Holder upon a Repurchase Event .. 18
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities ................................... 23
SECTION 4.02. Maintenance of Office or Agency ......................... 23
SECTION 4.03. Reports to Holders ...................................... 24
SECTION 4.04. Compliance Certificate .................................. 24
SECTION 4.05. Stay, Extension and Usury Laws .......................... 24
SECTION 4.06. Corporate Existence ..................................... 24
SECTION 4.07. Notice of Default ....................................... 25
ARTICLE FIVE
CONSOLIDATION, MERGER AND SALE OF ASSETS
SECTION 5.01. When Company May Merge, etc. ............................ 25
SECTION 5.02. Successor Substituted ................................... 25
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default ....................................... 26
SECTION 6.02. Acceleration ............................................ 27
SECTION 6.03. Other Remedies .......................................... 27
SECTION 6.04. Waiver of Past Defaults ................................. 28
SECTION 6.05. Control by Majority ..................................... 28
SECTION 6.06. Limitation on Suits ..................................... 28
SECTION 6.07. Rights of Holders to Receive Payment or Convert ......... 28
SECTION 6.08. Collection Suit by Trustee .............................. 29
SECTION 6.09. Trustee May File Proofs of Claim ........................ 29
SECTION 6.10. Priorities .............................................. 29
SECTION 6.11. Undertaking for Costs ................................... 29
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee ....................................... 30
SECTION 7.02. Rights of Trustee ....................................... 31
SECTION 7.03. Individual Rights of Trustee ............................ 32
SECTION 7.04. Trustee's Disclaimer .................................... 32
SECTION 7.05. Notice of Defaults ...................................... 32
SECTION 7.06. Reports by Trustee to Holders ........................... 32
SECTION 7.07. Compensation and Indemnity .............................. 32
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SECTION 7.08. Replacement of Trustee .................................. 33
SECTION 7.09. Successor Trustee by Merger etc. ........................ 34
SECTION 7.10. Eligibility; Disqualification ........................... 34
SECTION 7.11. Preferential Collection of Claims Against Company ....... 34
ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations .................... 35
SECTION 8.02. Application of Trust Money .............................. 36
SECTION 8.03. Repayment to Company .................................... 36
SECTION 8.04. Reinstatement ........................................... 36
ARTICLE NINE
AMENDMENTS
SECTION 9.01. Without Consent of Holders .............................. 37
SECTION 9.02. With Consent of Holders ................................. 37
SECTION 9.03. Compliance with Trust Indenture Act ..................... 38
SECTION 9.04. Revocation and Effect of Consents ....................... 38
SECTION 9.05. Notation on or Exchange of Securities ................... 38
SECTION 9.06. Trustee Protected ....................................... 39
ARTICLE TEN
CONVERSION
SECTION 10.01. Conversion Privilege; Restrictive Legends ............... 39
SECTION 10.02. Conversion Procedure .................................... 39
SECTION 10.03. Fractional Shares ....................................... 40
SECTION 10.04. Taxes on Conversion ..................................... 40
SECTION 10.05. Company to Provide Stock ................................ 40
SECTION 10.06. Adjustment of Conversion Price .......................... 41
SECTION 10.07. Effect of Reclassification, Consolidation,
Merger or Sale .......................................... 50
SECTION 10.08. Notice of Certain Transactions .......................... 51
SECTION 10.09. Company Determination Final ............................. 51
SECTION 10.10. Trustee's Disclaimer .................................... 51
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ARTICLE ELEVEN
[RESERVED]
ARTICLE TWELVE
SUBORDINATION
SECTION 12.01. Securities Subordinated to Senior Indebtedness .......... 52
SECTION 12.02. Subrogation ............................................. 54
SECTION 12.03. Obligation of Company Unconditional ..................... 54
SECTION 12.04. Modification of Terms of Senior Indebtedness ............ 54
SECTION 12.05. [Reserved] .............................................. 55
SECTION 12.06. Effectuation of Subordination by Trustee ................ 55
SECTION 12.07. Knowledge of Trustee .................................... 55
SECTION 12.08. Trustee's Relation to Senior Indebtedness ............... 56
SECTION 12.09. Rights of Holders of Senior Indebtedness Not Impaired ... 56
SECTION 12.10. Certain Conversions Not Deemed Payment .................. 56
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls ............................ 57
SECTION 13.02. Notices ................................................. 57
SECTION 13.03. Communication by Holders with Other Holders ............. 58
SECTION 13.04. Certificate and Opinion as to Conditions Precedent ...... 58
SECTION 13.05. Statements Required in Certificate or Opinion ........... 58
SECTION 13.06. Rules by Trustee and Agents ............................. 59
SECTION 13.07. Legal Holidays .......................................... 59
SECTION 13.08. No Recourse Against Others .............................. 59
SECTION 13.09. Duplicate Originals ..................................... 59
SECTION 13.10. Governing Law ........................................... 59
SECTION 13.11. No Adverse Interpretation of Other Agreements ........... 59
SECTION 13.12. Successors .............................................. 59
SECTION 13.13. Separability ............................................ 60
SECTION 13.14. Table of Contents, Headings, etc. ....................... 60
SIGNATURES ..............................................................S-1
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EXHIBITS
Exhibit A - Form of Security
Exhibit B - Form of Legends
Exhibit C - Form of Certificate to Be Delivered in Connection with Transfers to
Non-QIB Accredited Investors
Exhibit D - Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
Exhibit E - Form of Notice of Transfer Pursuant to Registration Statement
Exhibit F - Form of Opinion of Counsel in Connection with Registration of
Securities
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INDENTURE dated as of March 8, 2000 between ALEXION PHARMACEUTICALS,
INC., a Delaware corporation (the "Company"), and THE CHASE MANHATTAN BANK, as
trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's 5 3/4%
Convertible Subordinated Notes Due 2007:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
this purpose, "control" shall mean the power to direct the management and
policies of a Person through the ownership of securities, by contract or
otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means the Board of Directors of the Company or
any committee of the Board authorized to act for it hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of the Company and
all warrants or options to acquire such capital stock.
"Common Stock" means the common stock, par value $.0001 per share,
of the Company.
"Company" means the party named as such above until a successor
replaces it pursuant to the applicable provision hereof and thereafter means the
successor.
"Company Request" or "Company Order" means a written request or
order signed on behalf of the Company by its Chairman of the Board, its
President or any Vice President and by its Treasurer or an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
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"Conversion Price" means $106.425 per share of Common Stock, as
adjusted pursuant to Article Ten.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 13.02 or such other address as the Trustee may
give notice of to the Company.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Designated Senior Indebtedness" means any Senior Indebtedness in
which the instrument creating or evidencing the same or the assumption or
guarantee thereof (or related agreements or documents to which the Company is a
party) expressly provides that such Senior Indebtedness shall be "Designated
Senior Indebtedness" for purposes of this Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means a Person in whose name a Security is registered on
the Registrar's books.
"IAI Global Security" means a permanent Global Security in
registered form representing the aggregate principal amount of Securities
transferred to Institutional Accredited Investors.
"Indebtedness" means, with respect to any Person, (i) all
obligations, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (b) evidenced by a note, debenture, bond
or written instrument (including a purchase money obligation), (c) in respect of
leases of such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease obligations on the balance
sheet of such Person and all obligations and other liabilities (contingent or
otherwise) under any lease or related document (including a purchase agreement)
in connection with the lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property and thereby guarantee a minimum residual value of the leased
property to the lessor and the obligations of such Person under such lease or
related document to purchase or to cause a third party to purchase such leased
property or (d) in respect of letters of credit (including reimbursement
obligations with respect thereto) or bankers' acceptances; (ii) all obligations
of others of the type described in clause (i) above or in clause (iii), (iv) or
(v) below assumed by or guaranteed in any manner by such Person or in effect
guaranteed by such Person through an agreement to purchase, contingent or
otherwise (and the obligations of such Person under any such assumptions,
guarantees or other such arrangements); (iii) all obligations secured by a
mortgage, pledge, lien, encumbrance, charge or adverse claim affecting title or
resulting in an encumbrance to which the property or assets of such Person are
subject, whether or not the obligation secured thereby shall have been assumed
by or shall otherwise be such Person's legal liability; (iv) to the extent not
otherwise included, all obligations of such Person under interest rate and
currency swap agreements, cap, floor and collar agreements, spot and forward
contracts and
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similar agreements and arrangements; and (v) all obligations, contingent or
otherwise, of such Person under or in respect of any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (i), (ii), (iii) or (iv).
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Institutional Accredited Investor" means an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
that is an institutional investor.
"interest" means, with respect to any Security, interest on the
Security plus liquidated damages, if any.
"Issue Date" means (i) March 8, 2000 with respect to the
$120,000,000 aggregate principal amount of Securities issued on such date, and
(ii) with respect to any of up to $30,000,000 aggregate principal amount of
Securities that may be issued after March 8, 2000 pursuant to the option
described in Section 2.01, the respective issue date of such Securities.
"liquidated damages" has the meaning provided in the Registration
Rights Agreement.
"Maturity Date" means March 15, 2007.
"Non-U.S. Person" means a Person who is not a U.S. Person, as
defined in Regulation S under the Securities Act.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer, the Treasurer or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
"Opinion of Counsel" means a written opinion from legal counsel who
may be an employee of or counsel for the Company or other counsel reasonably
acceptable to the Trustee.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"principal" of a debt security means the principal of the security
plus the premium, if any, on the security.
"QIB" means a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act.
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"Registration Rights Agreement" means the Registration Rights
Agreement dated as of March 8, 2000 between the Company and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent Global Security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S.
"Restricted Security" means a Security that constitutes a
"Restricted Security" within the meaning of Rule 144(a)(3) under the Securities
Act; provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Security
constitutes a Restricted Security.
"Rule 144A Global Security" means a permanent Global Security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Rule 144A.
"SEC" means the Securities and Exchange Commission.
"Securities" means the 5 3/4% Convertible Subordinated Notes Due
2007 issued by the Company pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on, rent payable under, and any other amounts due on or in connection
with any and all Indebtedness of the Company (including, without limitation,
fees, costs, expenses and any interest accruing after the filing of a petition
initiating any proceeding pursuant to any bankruptcy law, but only to the extent
allowed or permitted to the holder of such Indebtedness against the bankruptcy
or other insolvency estate of the Company in such proceeding), whether
outstanding on the date of this Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions or refundings of, or amendments, modifications
or supplements to the foregoing); provided, however, that Senior Indebtedness
does not include (i) Indebtedness evidenced by the Securities, (ii) Indebtedness
of the Company to any subsidiary of the Company except to the extent such
Indebtedness is pledged by such subsidiary as security for any Senior
Indebtedness, (iii) accounts payable of the Company to trade creditors arising
in the ordinary course of business, and (iv) any particular Indebtedness in
which the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to, or is pari passu with, or is subordinated or junior to,
the Securities.
"subsidiary" means (i) a corporation a majority of whose capital
stock with voting power, under ordinary circumstances, to elect directors is at
the time, directly or indirectly, owned by the Company, by one or more
subsidiaries of the Company or by the Company and one or more subsidiaries
thereof or (ii) any other Person (other than a corporation) in which the
Company, one or more subsidiaries thereof or the Company and one or more
subsidiaries thereof, directly or indirectly, at the date of determination
thereof, have at least majority ownership interest.
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"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions hereof and thereafter
means the successor.
SECTION 1.02. Other Definitions.
Term Defined in Section
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"Bankruptcy Law" .......................... 6.01
"Business Day" ............................ 13.07
"Change in Control" ....................... 3.07(1)
"Closing Price" ........................... 10.06(h)
"Common Dividend Amount" .................. 10.06(e)
"Company Notice" .......................... 3.07(b)
"Continuing Director" ..................... 3.07(1)
"Conversion Agent" ........................ 2.03
"Current Market Price" .................... 10.06(h)
"Custodian" ............................... 6.01
"Event of Default" ........................ 6.01
"fair market value" ....................... 10.06(h)
"Global Security" ......................... 2.01
"Initial Purchasers" ...................... 2.02
"Legal Holiday" ........................... 13.07
"Market Capitalization" ................... 10.06(e)
"Participants" ............................ 2.15
"Paying Agent" ............................ 2.03
"Payment Blockage Notice" ................. 12.01(b)
"Payment Blockage Period" ................. 12.01(b)
"Payment Default" ......................... 12.01(b)
"Physical Securities" ..................... 2.15(b)
"Private Placement Legend" ................ 2.17
"Record Date" ............................. 10.06(h)
"Registrar" ............................... 2.03
"Repurchase Date" ......................... 3.07(a)
"Repurchase Event" ........................ 3.07(1)
"Repurchase Price ......................... 3.07
"Subject Securities" ...................... 10.06(d)
"Termination of Trading" .................. 3.07(1)
"Trading Day" ............................. 10.06(h)
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"Trigger Event" ........................... 10.06(d)
"U.S. Government Obligations" ............. 8.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein have the meanings so assigned to them.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein", "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
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ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication shall
be substantially in the form set forth in Exhibit A, which is incorporated in
and forms a part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each Security
shall be dated the date of its authentication.
Securities offered and sold in reliance on Rule 144A, Securities
offered and sold in reliance on Regulation S and Securities subsequently
transferred to Institutional Accredited Investors shall be issued initially in
the form of one or more Global Securities, substantially in the form set forth
in Exhibit A (the "Global Security"). The aggregate principal amount of the
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
Upon a written order of the Company signed by two Officers or by an
Officer and an Assistant Treasurer of the Company, the Trustee shall
authenticate Securities for original issue in the principal amount of
$120,000,000 and such additional principal amounts, if any, as shall be
determined pursuant to the next sentence of this Section 2.02. Upon receipt by
the Trustee of an Officers' Certificate stating that the Initial Purchasers have
elected to purchase from the Company a specified principal amount of additional
Securities, not to exceed $30,000,000, pursuant to Section 1 of the Purchase
Agreement dated as of March 3, 2000 between the Company, as issuer, and J.P.
Morgan Securities Inc., U.S. Bancorp Piper Jaffray Inc., Chase Securities Inc.
and Warburg Dillon Read LLC, as initial purchasers (the "Initial Purchasers"),
the Trustee shall authenticate and deliver such specified principal amount of
additional Securities to or upon the written order of the Company signed as
provided in the immediately preceding sentence. Such Officers' Certificate must
be received by the Trustee at least two full Business Days prior to the proposed
date for delivery of such additional Securities, but, in any case, not later
than April 5, 2000. The aggregate principal amount of Securities outstanding at
any time may not exceed $150,000,000 except as provided in Section 2.07.
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Upon a written order of the Company signed by two Officers or by an
Officer and an Assistant Treasurer of the Company, the Trustee shall
authenticate Securities not bearing the Private Placement Legend to be issued to
the transferee when sold pursuant to an effective registration statement under
the Securities Act.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 principal amount and any integral
multiple thereof.
SECTION 2.03. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain an office or agency where Securities may
be presented for registration of transfer or for exchange ("Registrar"), an
office or agency where Securities may be presented for payment ("Paying Agent")
and an office or agency where Securities may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may appoint or change one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents without notice and may act in any such capacity on its own
behalf. The term "Registrar" includes any co-registrar; the term "Paying Agent"
includes any additional paying agent; the term "Conversion Agent" includes any
additional conversion agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent or Conversion Agent,
the Trustee shall act as such.
The Company initially appoints the Trustee as Paying Agent,
Registrar and Conversion Agent.
SECTION 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the Holders
or the Trustee all moneys held by the Paying Agent for the payment of principal
of or interest on the Securities, and shall notify the Trustee of any default by
the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have no
further liability for the money. If the Company acts as Paying Agent, it shall
segregate and hold as a separate trust fund all money held by it as Paying
Agent.
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SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each interest payment date and at such other times as the
Trustee may request in writing a list, in such form and as of such date as the
Trustee may reasonably require, of the names and addresses of Holders.
SECTION 2.06. Transfer and Exchange.
Where Securities are presented to the Registrar with a request to
register their transfer or to exchange them for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transaction are met.
To permit registrations of transfer and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's request. The
Company or the Trustee, as the case may be, shall not be required (a) to issue
or authenticate, register the transfer of or exchange any Security during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of the Securities selected for redemption under Section
3.03 and ending at the close of business on the day of such mailing, or (b) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of Securities being redeemed in
part.
No service charge shall be made for any registration of transfer,
exchange or conversion of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer, registration of transfer or exchange of
Securities, other than exchanges pursuant to Sections 2.10, 3.06, 9.05 or 10.02
not involving any transfer.
SECTION 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been
mutilated, lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
are met and, in the case of a mutilated Security, such mutilated Security is
surrendered to the Trustee. In the case of lost, destroyed or wrongfully taken
Securities, if required by the Trustee or the Company, an indemnity bond must be
provided by the Holder that is sufficient in the judgment of both to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Security is replaced. The Company or the Trustee may charge for its expenses
in replacing a Security.
In case any such mutilated, lost, destroyed or wrongfully taken
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security when due.
Every replacement Security is an additional obligation of the
Company.
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SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those converted, those cancelled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Security does not cease to be outstanding because the Company
or one of its subsidiaries or Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it, or a court
holds, that the replaced Security is held by a protected purchaser.
If the Paying Agent (other than the Company) holds on a redemption
date or maturity date money sufficient to pay Securities payable on that date,
then on and after that date, such Securities shall be deemed to be no longer
outstanding and interest on them shall cease to accrue.
SECTION 2.09. Securities Held by the Company or an Affiliate.
In determining whether the Holders of the required aggregate
principal amount of Securities have concurred in any direction, waiver or
consent, Securities owned by the Company or a subsidiary or an Affiliate shall
be disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Trust Officer knows are so owned shall be so disregarded.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to
the Trustee any Securities surrendered to them for registration of transfer,
exchange, payment or conversion. The Trustee shall cancel all Securities
surrendered for registration of transfer, exchange, payment, conversion or
cancellation and the Trustee may, but shall not be required to, destroy
cancelled Securities and deliver a certificate of any such destruction to the
Company or return such cancelled Securities to the Company. The Company may not
issue new Securities to replace Securities that it has paid or delivered to the
Trustee for cancellation or that any Holder has converted pursuant to Article
Ten.
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SECTION 2.12. Defaulted Interest.
If and to the extent the Company defaults in a payment of interest
on the Securities, it shall pay the defaulted interest in any lawful manner
plus, to the extent not prohibited by applicable statute or case law, interest
payable on the defaulted interest. It may pay the defaulted interest to the
Persons who are Holders on a subsequent special record date. The Company shall
fix such record date and payment date. At least 15 days before the record date,
the Company shall mail to Holders a notice that states the record date, payment
date and amount of interest to be paid.
SECTION 2.13. CUSIP Numbers.
The Company in issuing the Securities may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided, however, that no
representation is hereby deemed to be made by the Trustee as to the correctness
or accuracy of the CUSIP numbers printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities. The Company shall promptly notify the Trustee of any change in
the CUSIP number.
SECTION 2.14. Deposit of Moneys.
Prior to 11:00 a.m., New York City time, on each interest payment
date, maturity date, redemption date and Repurchase Date, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such interest payment date, maturity date,
redemption date and Repurchase Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such interest
payment date, maturity date, redemption date and Repurchase Date, as the case
may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear the legend for
Global Securities as set forth in Exhibit B(II).
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. In addition, permanent certifi-
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cated Securities in registered form, in the form set forth in Exhibit A (the
"Physical Securities"), shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a written request from
the Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
aggregate principal amount of such Global Security in an amount equal to the
aggregate initial aggregate principal amount of the beneficial interest in the
Global Security to be transferred, and the Company shall execute and the Trustee
shall authenticate and deliver one or more Physical Securities of authorized
denominations in an aggregate principal amount equal to the aggregate principal
amount of the beneficial interest in the Global Security so transferred.
(d) In connection with the transfer of a Global Security in its
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
such Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in such
Global Security, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) or (c) of this Section 2.15 shall, except as otherwise provided by Section
2.16, bear the Private Placement Legend.
(f) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. Special Transfer Provisions.
(a)Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Security bears the Private Placement Legend,
if (x) the requested transfer is after the second anniversary of the Issue
Date for such Security; provided, however, that the transferor shall
represent to the Registrar that, to the transferor's knowledge, neither
the Company nor any Affiliate of the Company has held any beneficial
interest in such Security, or portion thereof, at any time on or prior to
the second anniversary of the Issue Date for such Security or (y)(1) in
the case of a transfer to an Institutional Accredited Investor which is
not a QIB
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(excluding Non-U.S. Persons), the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit C hereto and
any legal opinions and certifications required thereby and (2) in the case
of a transfer to a Non-U.S. Person, the proposed transferee has delivered
to the Registrar a certificate substantially in the form of Exhibit D
hereto;
(ii) if the proposed transferee is a Participant and the Securities
to be transferred consist of Physical Securities which after transfer are
to be evidenced by an interest in the Global Security, upon receipt by the
Registrar of (x) written instructions given in accordance with the
Depository's and the Registrar's procedures and (y) the appropriate
certificate, if any, required by clause (y) of paragraph (i) above, the
Registrar shall register the transfer and reflect on its books and records
the date and an increase in the aggregate principal amount of the Global
Security in an amount equal to the aggregate principal amount of Physical
Securities to be transferred, and the Trustee shall cancel the Physical
Securities so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the Rule 144A Global Security, upon receipt by the
Registrar of (x) written instructions given in accordance with the
Depository's and the Registrar's procedures and (y) the appropriate
certificate, if any, required by clause (y) of paragraph (i) above, the
Registrar shall register the transfer and reflect on its books and records
the date and (A) a decrease in the aggregate principal amount of the Rule
144A Global Security in an amount equal to the aggregate principal amount
of the Securities to be transferred and (B) an increase in the aggregate
principal amount of the Regulation S Global Security or the IAI Global
Security, as the case may be, in an amount equal to the aggregate
principal amount of the Securities to be transferred.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Security to
a QIB:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Security bears the Private Placement Legend,
if (x) the requested transfer is after the second anniversary of the Issue
Date for such Security; provided, however, that the transferor shall
represent to the Registrar that, to the transferor's knowledge, neither
the Company nor any Affiliate of the Company has held any beneficial
interest in such Security, or portion thereof, at any time on or prior to
the second anniversary of the Issue Date for such Security or (y) such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Security stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying
<PAGE>
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upon its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
(ii) if the proposed transferee is a Participant and the Securities
to be transferred consist of Physical Securities which after transfer are
to be evidenced by an interest in the Global Security, upon receipt by the
Registrar of written instructions given in accordance with the
Depository's and Registrar's procedures, the Registrar shall register the
transfer and reflect on its books and records the date and an increase in
the principal amount of the Global Security in an amount equal to the
principal amount of Physical Securities to be transferred, and the Trustee
shall cancel the Physical Security so transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in the Regulation S Global Security or the IAI Global
Security, upon receipt by the Registrar of written instructions given in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall register the transfer and reflect on its books and records
the date and (A) a decrease in the aggregate principal amount of the
Regulation S Global Security or the IAI Global Security, as the case may
be, in an amount equal to the aggregate principal amount of the Securities
to be transferred and (B) an increase in the aggregate principal amount of
the Rule 144A Global Security in an amount equal to the aggregate
principal amount of the Securities to be transferred.
(c) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(d) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar or co-Registrar shall deliver Securities that do not bear the
Private Placement Legend. Upon the registration of transfer, exchange or
replacement of Securities bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver only Securities that bear the Private Placement
Legend unless (i) the requested transfer is after the second anniversary of the
Issue Date for such Security (provided, however, that neither the Company nor
any Affiliate of the Company has held any beneficial interest in such Security,
or portion thereof, at any time prior to or on the second anniversary of the
Issue Date for such Security), (ii) there is delivered to the Trustee an Opinion
of Counsel reasonably satisfactory to the Company to the effect that neither
such legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (iii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act and the Holder selling such Securities has delivered to the
Registrar or co-Registrar a notice in the form of Exhibit E hereto. Upon the
effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement) the Company shall deliver to the Trustee a notice
of effectiveness, a Security or Securities, an authentication order in
accordance with Section 2.02 and an Opinion of Counsel in the form
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of Exhibit F hereto and, if required by the Depository, the Company shall
deliver to the Depository a letter of representations in a form reasonably
acceptable to the Depository.
(e) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain, in accordance with its customary
procedures, copies of all letters, notices and other written communications
received pursuant to Section 2.15 or this Section 2.16. The Company shall have
the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
notice to the Registrar.
(f) Transfers of Securities Held by Affiliates. Any certificate (i)
evidencing a Security that has been transferred to an Affiliate of the Company
within two years after the Issue Date for such Security, as evidenced by a
notation on the Assignment Form for such transfer or in the representation
letter delivered in respect thereof or (ii) evidencing a Security that has been
acquired from an Affiliate (other than by an Affiliate) in a transaction or a
chain of transactions not involving any public offering, shall, until two years
after the last date on which either the Company or any Affiliate of the Company
was an owner of such Security, in each case, bear the Private Placement Legend,
unless otherwise agreed by the Company (with written notice thereof to the
Trustee).
SECTION 2.17. Restrictive Legends.
Each Global Security and Physical Security that constitutes a
Restricted Security shall bear the private placement legend (the "Private
Placement Legend") as set forth in Exhibit B(I) on the face thereof until after
the second anniversary of the later of the Issue Date for such Securities and
the last date on which the Company or any Affiliate of the Company was the owner
of such Security (or any predecessor security) (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the opinion of counsel for
the Company, unless otherwise agreed by the Company and the Holder thereof).
ARTICLE THREE
REDEMPTION; REPURCHASE
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 6 of
the Securities, it shall notify the Trustee at least 45 days prior to the
redemption date (unless a shorter notice period shall be satisfactory to the
Trustee) of the redemption date and the aggregate principal amount of Securities
to be redeemed. If the Company wants to credit against any such redemption
Securities it has
<PAGE>
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not previously delivered to the Trustee for cancellation (other than Securities
repurchased pursuant to Section 3.07), it shall deliver the Securities with the
notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed on either a pro rata basis or by lot
or such other method as the Trustee shall deem fair and equitable. The Trustee
shall make the selection from Securities outstanding not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000 principal amount.
Securities and portions of them it selects shall be in amounts of $1,000
principal amount or whole multiples of $1,000 principal amount. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
The Registrar need not register the transfer of or exchange any
Securities selected for redemption. Also, the Registrar need not transfer or
exchange any Securities for a period of 15 days before selecting Securities to
be redeemed.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail by first-class mail or cause to be mailed a notice of
redemption to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities and the aggregate principal
amount thereof to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price, plus the amount of accrued and unpaid
interest to be paid on the Securities called for redemption;
(3) the then current conversion rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) the date on which the right to convert the principal of the
Securities called for redemption will terminate and the place or places
where such Securities may be surrendered for conversion;
(6) that Holders who want to convert Securities must satisfy the
requirements in Article Ten;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
<PAGE>
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(8) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(9) the CUSIP number of the Securities.
The date on which the right to convert the principal of the
Securities called for redemption will terminate shall be at the close of
business on the date prior to the redemption date, or, if the day before the
redemption date is a Legal Holiday, the close of business on the next preceding
day which is not a Legal Holiday.
At the Company's request (which request shall be furnished to the
Trustee at least 40 days prior to the redemption date (unless a shorter period
shall be acceptable to the Trustee)), the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided that the
form and content of such notice shall be prepared by the Company.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date at the redemption price
plus accrued and unpaid interest to the date of redemption, and, on and after
such date (unless the Company shall default in the payment of the redemption
price), such Securities shall cease to bear interest. Upon surrender to the
Paying Agent, such Securities shall be paid at the redemption price plus accrued
interest to the redemption date, unless the redemption date is an interest
payment date, in which case the accrued interest will be paid in the ordinary
course.
SECTION 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent pursuant to Section 2.14 money in funds immediately available on
the redemption date sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date. The Paying Agent shall
return to the Company, as soon as practicable, any money not required for that
purpose because of conversion of Securities.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
If a portion of a Holder's Securities is selected for partial
redemption and that Holder converts a portion of that Holder's Securities, the
converted portion shall be deemed (as far as may be) to be the portion selected
for redemption.
<PAGE>
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SECTION 3.07. Repurchase at Option of Holder upon a Repurchase Event.
(a) If there shall occur a Repurchase Event, then each Holder shall
have the right, at such Holder's option, to require the Company to repurchase
all of such Holder's Securities, or any portion thereof (in principal amounts of
$1,000 or integral multiples thereof), on the date (the "Repurchase Date") that
is forty (40) calendar days after the date of the Company Notice (as defined
below) of such Repurchase Event (or, if such 40th day is not a Business Day, the
next succeeding Business Day). Such repurchase shall be made in cash at a price
equal to 105% of the principal amount of Securities such Holder elects to
require the Company to repurchase, together with accrued interest, if any, to
but excluding the Repurchase Date (the "Repurchase Price") (or, at the option of
the Company, by delivery of Common Stock in accordance with the provisions of
Section 3.07(k)); provided, however, that if such Repurchase Date is March 15 or
September 15, then the interest payable on such date shall be paid to the holder
of record of the Security on the next preceding March 1 or September 1,
respectively. No Securities may be repurchased at the option of Holders upon a
Repurchase Event if there has occurred and is continuing an Event of Default,
other than a default in the payment of the Repurchase Price with respect to such
Securities on the Repurchase Date.
(b) Unless the Company shall have theretofore called for redemption
all of the outstanding Securities, on or before the fifteenth (15th) calendar
day after the occurrence of a Repurchase Event, the Company or, at the written
request of the Company, the Trustee shall mail to all holders of record of the
Securities a notice (the "Company Notice") in the form prepared by the Company
of the occurrence of the Repurchase Event and of the repurchase right set forth
herein arising as a result thereof. The Company shall also deliver a copy of
such Company Notice to the Trustee and cause a copy of such Company Notice, or a
summary of the information contained therein, to be published once in a
newspaper of general circulation in The City of New York. The Company Notice
shall contain the following information:
(1) the Repurchase Date;
(2) the date by which the repurchase right must be exercised;
(3) the last date by which the election to require repurchase, if
submitted, must be revoked;
(4) the Repurchase Price and whether the Repurchase Price shall be
payable in cash or Common Stock and, if payable in Common Stock, the
method of calculating the amount of the Common Stock to be delivered upon
the repurchase as provided in Section 3.07(k);
(5) a description of the procedure which a Holder must follow to
exercise a repurchase right;
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(6) the Conversion Price 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 Securities may be surrendered for
conversion; and
(7) the CUSIP numbers of the 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 are inconsistent with applicable
law, such law shall govern.
(c) To exercise a repurchase right, a Holder shall deliver to the
Trustee on or before the thirty-fifth (35th) day after the Company Notice was
delivered (i) written notice to the Company (or agent designated by the Company
for such purpose) 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, 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,
duly endorsed for transfer to the Company. Election of repurchase by a Holder
shall be revocable at any time prior to, but excluding, the Repurchase Date, by
delivering written notice to that effect to the Trustee prior to the close of
business on the Business Day prior to the Repurchase Date.
(d) If the Company fails to repurchase on the Repurchase Date any
Securities (or portions thereof) as to which the repurchase right has been
properly exercised, then the principal of such Securities shall, until paid,
bear interest to the extent permitted by applicable law from the Repurchase Date
at the rate borne by the Securities and each such Security shall be convertible
into Common Stock in accordance with this Indenture until the principal of such
Security 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 duly endorsed for transfer to the Company and
accompanied by appropriate evidence of genuineness and authority 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 deliver to the Holder of such Security without service
charge, a new Security or Securities, containing identical terms and conditions,
of any authorized denomination as requested by such Holder in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) On or prior to the Repurchase Date, the Company shall deposit
with the Trustee or with a Paying Agent, pursuant to Section 2.14, the
Repurchase Price in cash for payment to the Holder on the Repurchase Date;
provided that if payment is to be made in cash and such cash payment is made on
the Repurchase Date it must be received by the Trustee or paying agent, as the
case
<PAGE>
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may be, by 10:00 a.m., New York City time, on such date; provided, further, that
if the Repurchase Price is to be paid in shares of Common Stock, such shares of
Common Stock are to be paid as promptly after the Repurchase Date as
practicable.
(g) 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 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.
(h) 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 otherwise 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 of the
Common Stock on the Trading Day immediately preceding the Repurchase Date.
(i) 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 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.
(j) All Securities delivered for repurchase shall be delivered to
the Trustee to be canceled in accordance with the provisions of Section 2.11.
(k) The Company may elect to pay the Repurchase Price by delivery of
shares of Common Stock if and only if the following conditions shall have been
satisfied:
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(i) 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 this Section 3.07,
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 Prices of
the Common Stock for the five consecutive Trading Days immediately
preceding and including the third Trading Day prior to the Repurchase
Date;
(ii) such shares have been registered under the Securities Act or
are freely transferable without such registration;
(iii) the issuance of such Common Stock does not require
registration with or approval of any governmental authority under any
state law or any other federal law, which registration or approval has not
been made or obtained;
(iv) such shares have been approved for quotation on the Nasdaq
National Market or listing on a national securities exchange; and
(v) such shares will be issued out of the Company's authorized but
unissued stock and, upon issuance, will be duly and validly and fully paid
and non-assessable and free of any preemptive rights.
(l) For purposes of this Section 3.07:
(i) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3 and 13d-5, as in effect on the date of the original
execution of this Indenture, promulgated by the SEC pursuant to the
Exchange Act;
(ii) the term "Person" or "group" shall include any syndicate or
group which would be deemed to be a "person" under Section 13(d) and 14(d)
of the Exchange Act as in effect on the date of this Indenture;
(iii) the term "Continuing Director" means at any date a member of
the Company's Board of Directors (i) who was a member of such board on
March 3, 2000 or (ii) who was nominated or elected by at least a majority
of the directors who were Continuing Directors at the time of such
nomination or election or whose election to the Company's Board of
Directors was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or such lesser number comprising a majority of a nominating
committee if authority for such nominations or elections has been
delegated to a nominating committee whose authority and composition have
been approved by at least a majority of the Continuing Directors; and
(iv) the term "Repurchase Event" means a Change in Control or a
Termination of Trading, in each case defined as follows:
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A "Change in Control" shall be deemed to have occurred when
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rules 13-d3 and 13-d5 under the Exchange Act)
of shares representing more than 50% of the combined voting power of
the then outstanding securities entitled to vote generally in
elections of directors of the Company (the "Voting Stock"); (ii) the
stockholders of the Company approve any plan or proposal for the
liquidation, dissolution or winding up of the Company; (iii) the
Company (A) consolidates with or merges into any other Person or any
other Person merges into the Company, and in the case of any such
transaction, the outstanding Common Stock of the Company is changed
or exchanged into other assets or securities as a result, unless the
stockholders of the Company immediately before such transaction own,
directly or indirectly immediately following such transaction, more
than 50% of the combined voting power of the outstanding voting
securities of the Person resulting from such transaction in
substantially the same proportion as their ownership of the Voting
Stock immediately before such transaction, or (B) conveys, transfers
or leases all or substantially all of its assets to any Person other
than a subsidiary or subsidiaries; or (iv) Continuing Directors do
not at any time constitute a majority of the Board of Directors of
the Company; provided that a Change in Control shall not be deemed
to have occurred if either (x) the Closing Price of the Common Stock
for any five (5) Trading Days during the ten (10) Trading Days
immediately preceding the Change in Control is at least equal to
105% of the Conversion Price in effect on the date on which the
Change in Control occurs or (y) in the case of a merger or
consolidation otherwise constituting a Change in Control, all of the
consideration (excluding cash payments for fractional shares) in
such merger or consolidation constituting the Change in Control
consists of common stock traded on a United States national
securities exchange or quoted on the Nasdaq National Market (or
which will be so traded or quoted when issued or exchanged in
connection with such Change in Control) and as a result of such
transaction or transactions the Securities become convertible solely
into such Common Stock.
A "Termination of Trading" shall have occurred if the Common
Stock (or other common stock into which the Securities are then
convertible) is neither listed for trading on a United States
national securities exchange nor approved for trading on an
established automated over-the-counter trading market in the United
States.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal amount, premium, if any, of and
any accrued and unpaid interest on the Securities on the dates and in the manner
provided in the Securities. The principal, premium, if any, and any accrued and
unpaid interest thereon shall be considered paid on the date due if the Paying
Agent holds (or, if the Company is acting as Paying Agent, if the Company has
segregated and holds in trust in accordance with Section 2.04) on that date
money sufficient to pay the principal, premium, if any, and any accrued and
unpaid interest thereon.
The Company shall pay interest on any overdue principal at the rate
borne by the Securities. The Company shall pay interest on overdue installments
of interest at the same rate to the extent not prohibited by applicable law.
SECTION 4.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or conversion 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 of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as an agency of the Company in accordance with Section 2.03.
The Company also shall comply with the provisions of TIA ss. 314(a).
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SECTION 4.03. Reports to Holders.
(a) The Company (at its own expense) will deliver to the Trustee
within 15 days after the filing of the same with the SEC, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act.
(b) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will promptly provide the information required by Rule 144A(d)(4) to any Holder
that so requests.
(c) In addition, if and when this Indenture becomes subject to the
TIA, the Company will file a copy of all such information with the SEC for
public availability (unless the Commission will not accept such a filing) and
make such information available to investors who request it in writing. The
Company will also comply with the other provisions of TIA ss. 314(a).
SECTION 4.04. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company an Officers' Certificate stating whether
or not the signers know of any Default or Event of Default by the Company in
performing any of its obligations under this Indenture or the Securities. If
they do know of any such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status.
SECTION 4.05. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
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, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
has been enacted.
SECTION 4.06. Corporate Existence.
Subject to Article Five, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each subsidiary in accordance with the
respective organizational documents of each subsidiary and the rights (charter
and statutory), licenses and franchises of the Company and its subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate existence of any subsidiary, if in
the judgment of the Company, (i) such preservation or existence is not material
to the conduct of business of the Company and (ii) the loss of
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such right, license or franchise or the dissolution of such subsidiary does not
have a material adverse impact on the Holders.
SECTION 4.07. Notice of Default.
In the event that any Default under Section 6.01 hereof shall occur
the Company will give prompt written notice of such Default to the Trustee.
ARTICLE FIVE
CONSOLIDATION, MERGER AND SALE OF ASSETS
SECTION 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge into, or transfer or
lease all or substantially all of its assets to, another Person unless such
other Person is a corporation, limited liability company, partnership, trust or
other business entity organized under the laws of the United States, any State
thereof or the District of Columbia and such Person assumes by supplemental
indenture all the obligations of the Company under the Securities, this
Indenture and the Registration Rights Agreement, and immediately after giving
effect to the transaction, no Default or Event of Default has occurred and is
continuing.
The Company shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture will, upon consummation of the proposed transaction,
comply with this Indenture.
Notwithstanding the foregoing, any subsidiary may consolidate with,
merge into or transfer all or part of its properties and assets to the Company
or any other subsidiary or subsidiaries.
SECTION 5.02. Successor Substituted.
Upon any consolidation or merger or transfer or lease of all or
substantially all of the assets of the Company in accordance with Section 5.01,
the successor Person formed by such consolidation or into which the Company is
merged or to which such transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, and shall assume
every duty and obligation of, the Company under this Indenture with the same
effect as if such successor corporation had been named as the Company herein.
When the successor corporation assumes all obligations of the Company hereunder,
all obligations of the predecessor corporation shall terminate.
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ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay the principal of or any premium on the
Securities when due (whether or not prohibited by the provisions set forth
in Article Twelve hereof);
(2) the Company fails to pay any interest on the Securities for 30
days when due (whether or not prohibited by the provisions set forth in
Article Twelve hereof);
(3) the Company fails to perform any other covenant in this
Indenture for the period and after the notice specified in the last
paragraph of this Section 6.01;
(4) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(5) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company for all or
substantially all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90
consecutive days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
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A default under clause (3) is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company and the Trustee of the default
and the Company does not cure the default within 90 days after receipt of the
notice of such default. The notice must specify the default, demand that it be
remedied and state that the notice is a "Notice of Default". If the Holders of
25% in aggregate principal amount of the outstanding Securities request the
Trustee to give such notice on their behalf, the Trustee shall do so. When a
default is cured, it ceases.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 6.01(4) or (5)) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in principal amount of the Securities
then outstanding by notice to the Company and the Trustee, may declare the
principal of, premium, if any, and any accrued and unpaid interest on all the
Securities to be due and payable. Upon such declaration such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.01(4) or (5) occurs, the entire principal amount of the Securities
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
The Company shall promptly notify holders of Designated Senior
Indebtedness if payment of the Securities is accelerated because of an Event of
Default.
After a declaration of acceleration, but before a judgment or decree
of the money due in respect of the Securities has been obtained, the Holders of
not less than a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if (i) all existing Events of Default (other than the nonpayment of
principal of and interest on the Securities which has become due solely by
virtue of such acceleration) have been cured or waived, (ii) the rescission
would not conflict with any judgment or decree and (iii) the Company shall have
paid all amounts due pursuant to Section 7.07.
SECTION 6.03. Other Remedies.
Notwithstanding any other provision of this Indenture, if an Event
of Default occurs and is continuing, the Trustee may pursue any available remedy
by proceeding at law or in equity to collect the payment of the principal of,
premium, if any, and interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative.
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SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.02, 6.07 and 9.02, the Holders of a majority
in aggregate principal amount of the Securities then outstanding by notice to
the Trustee may waive any past Default or Event of Default and its consequences.
When a Default or an Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the
Securities then outstanding may 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 it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability;
provided that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 6.06. Limitation on Suits.
Except as provided in Section 6.07, a Holder may pursue a remedy
with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the Securities then outstanding do not give the
Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment or Convert.
Notwithstanding any other provision of this Indenture, (i) the right
of any Holder to receive payment of the principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such
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respective dates, shall not be impaired or affected without the consent of the
Holder and (ii) the right of any Holder to bring suit for the enforcement of the
right to convert the Security shall not be impaired or affected without the
consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal and interest remaining unpaid and amounts due to the Trustee under
Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee, any predecessor Trustee and the Holders allowed in any judicial
proceedings relative to the Company, its creditors or its property.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required by
Article Twelve;
Third: to Holders for amounts due and unpaid on the Securities for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal, premium, if any, and interest, respectively, and
Fourth: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment by it to Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may
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require the filing by any party litigant in the suit other than the Trustee of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 shall not apply
to a suit by the Trustee, a suit by a Holder or group of Holders of more than
10% in aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for the enforcement or the payment of the principal or
interest on any Securities on or after the respective due dates for such
Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If 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 person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; 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 examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
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(d) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document; if, however, 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.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and/or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) 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.
(d) The Trustee may consult with counsel (such counsel to be
reasonably acceptable to the Company) and the written advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(e) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
(f) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
discretion, rights or powers hereunder.
(g) 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 may, in absence of bad
faith on its part, rely upon an Officers' Certificate.
(h) 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, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against costs, expenses and liabilities that
might be incurred by it in compliance with such request or direction.
(i) The Trustee shall not be charged with knowledge of any Default
or Event of Default with respect to the Securities unless either (1) a Trust
Officer shall have actual knowledge of
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such Default or Event of Default or (2) written notice of such Default or Event
of Default shall have been given to the Trustee by the Company or by any Holder.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate thereof with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities; it shall not be accountable for the
Company's use of the proceeds from the Securities; and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.
SECTION 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it
is actually known to the Trustee, the Trustee shall mail to each Holder a notice
of the Default or Event of Default within 30 days after it occurs unless such
Default or Event of Default has been cured or waived. Except in the case of a
Default or Event of Default in payment of the principal of, premium, if any, and
interest on any Security, the Trustee may withhold the notice if and so long as
it in good faith determines that withholding the notice is in the interests of
Holders.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with May 15, 2001, the
Trustee shall mail to each Holder, to the extent required by TIA ss. 313(c), a
brief report dated as of such March 1 that complies with TIA ss. 313(a). In such
event, the Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed by the Trustee with the SEC and each stock
exchange, if any, on which the Securities are listed. The Company shall promptly
notify the Trustee when the Securities are listed on any stock exchange.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation for its services as shall be agreed upon in writing. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred by it. Such expenses shall include
the reasonable compensation and out-of-pocket expenses of the Trustee's agents
and counsel.
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The Company shall indemnify the Trustee against any loss or
liability or expense (including the reasonable fees and expenses of counsel)
incurred by it in connection with the acceptance or administration of this trust
and the performance of its duties hereunder, including the reasonable costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers and duties hereunder. The
Company need not pay for any settlement made without its consent. The Trustee
shall notify the Company promptly of any claim for which it may seek
indemnification. The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through the Trustee's negligence
or bad faith.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay the principal
of, premium, if any, and interest on particular Securities.
The indemnity obligations of the Company with respect to the Trustee
provided for in this Section 7.07 shall survive any resignation or removal of
the Trustee and the termination of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
The Trustee may resign by so notifying the Company in writing 30
days prior to such resignation. The Holders of a majority in aggregate principal
amount of the Securities then outstanding may remove the Trustee by so notifying
the Trustee and the Company in writing and may appoint a successor Trustee with
the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the Securities
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then outstanding may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee, if such successor corporation is otherwise eligible
hereunder.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA ss.
310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
<PAGE>
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ARTICLE EIGHT
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.
The Company may terminate its substantive obligations in respect of
the Securities if the Securities mature within six months, or all of them are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for giving notice of redemption, by delivering all outstanding
Securities to the Trustee for cancellation and paying all sums payable by it on
account of principal of, premium, if any, and interest on all Securities or
otherwise. In addition to the foregoing, the Company may terminate its
obligations under Sections 3.07, 4.03 and 4.06 (other than with respect to the
corporate existence of the Company), and no Default or Event of Default under
Section 6.01(3) shall thereafter apply, by (i) depositing with the Trustee,
under the terms of an irrevocable trust agreement, money or direct non-callable
obligations of the United States of America for the payment of which the full
faith and credit of the United States is pledged ("U.S. Government
Obligations") sufficient (without reinvestment) to pay the principal of,
premium, if any, and interest on the Securities at maturity or an earlier
redemption, (ii) delivering to the Trustee either an Opinion of Counsel or a
ruling directed to the Trustee from the Internal Revenue Service to the effect
that the Holders of the Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and termination of
obligations and (iii) delivering to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating compliance with all conditions precedent
provided for herein. In addition, the Company may, provided that no Default or
Event of Default has occurred and is continuing or would arise therefrom (or,
with respect to a Default or Event of Default specified in Section 6.01(4),
occurs at any time on or prior to the 91st calendar day after the date of such
deposit (it being understood that this condition shall not be deemed satisfied
until after such 91st day)), terminate all of its substantive obligations in
respect of the Securities (including its obligations to pay the principal of,
premium, if any, and interest on the Securities) by (i) depositing with the
Trustee, under the terms of an irrevocable trust agreement, money or United
States Government Obligations sufficient (without reinvestment) to pay the
principal of, premium, if any, and interest on the Securities at maturity or on
earlier redemption, (ii) delivering to the Trustee either a ruling directed to
the Trustee from the Internal Revenue Service to the effect that the Holders of
the Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and termination of obligations or an
Opinion of Counsel addressed to the Trustee based upon such a ruling or based on
a change in the applicable Federal tax law since the date of this Indenture to
such effect and (iii) delivering to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating compliance with all conditions precedent
provided for herein.
Notwithstanding the foregoing paragraph, the Company's obligations
in Article Ten and Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 2.12, 2.13
and 4.01 (but not with respect to termination of substantive obligations
pursuant to the third sentence of the foregoing paragraph), 4.02, 7.07, 7.08,
8.03 and 8.04 shall survive until the Securities are no longer outstanding.
Thereafter the Company's obligations in Sections 7.07, 8.03 and 8.04 shall
survive.
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After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 8.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Securities.
SECTION 8.02. Application of Trust Money.
Subject to the provisions of Section 8.03, the Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to Section
8.01. It shall apply the deposited money and the money from U.S. Government
obligations through the Paying Agent and in accordance with this Indenture to
the payment of the principal of, premium, if any, and interest on the
Securities. Money and securities so held in trust are not subject to the
subordination provisions of Article Twelve.
SECTION 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of the principal of, premium, if any, and interest
that remains unclaimed for two years; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may, at the
expense of the Company, cause to be published once in a newspaper of general
circulation in The City of New York or cause to be mailed to each Holder, notice
stating that such money remains and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining will be repaid to the Company.
After payment to the Company, Holders entitled to the money must look to the
Company for payment as general creditors unless an applicable abandoned property
law designates another Person.
SECTION 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 8.01; provided, however,
that to the extent the Company makes any payment of the principal of, premium,
if any, and interest on any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
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ARTICLE NINE
AMENDMENTS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, may modify,
amend or supplement this Indenture or the Securities without notice to or the
consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Sections 5.01 and 10.07;
(3) to provide for uncertificated Securities in addition to
certificated Securities; or
(4) to make any change that does not adversely affect the rights of
any Holder.
SECTION 9.02. With Consent of Holders.
The Company, when authorized by a Board Resolution, may modify,
amend or supplement this Indenture or the Securities without notice to any
Holder but with the written consent of the Holders of at least a majority in
aggregate principal amount of the outstanding Securities. Subject to Section
6.07, the Holders of a majority in aggregate principal amount of the outstanding
Securities may waive compliance by the Company with any provision of this
Indenture or the Securities without notice to any other Holder. However, without
the consent of each Holder affected, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may not:
(1) change the stated maturity of the Securities:
(2) reduce the principal, premium, if any. or interest on the
Securities:
(3) change the place of payment from New York, New York or change
the currency in which the Securities are payable;
(4) waive a default in the payment of the principal of, premium, if
any, or interest on any Security;
(5) make any change in Section 6.04, Section 6.07 or this Section
9.02;
(6) modify the provisions of Article Twelve in a materially adverse
manner to the Holders; or
(7) make any change that adversely affects the right to convert any
Security.
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Furthermore, an amendment under this Article Nine may not make any
change that adversely affects the rights of any holder of Senior Indebtedness
under Article Twelve unless the holders of such Senior Indebtedness consent to
such change pursuant to the terms governing such Senior Indebtedness. It shall
not be necessary for the consent of the Holders under this Section 9.02 to
approve the particular form of any proposed amendment or supplement, but it
shall be sufficient if such consent approves the substance thereof.
Promptly after an amendment under this Section 9.02 becomes
effective, the Company shall mail to Holders a notice briefly describing the
amendment.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment, waiver or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to its Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
After an amendment, supplement or waiver becomes effective with
respect to the Securities, it shall bind every Holder unless it makes a change
described in any of clauses (1) through (7) of Section 9.02. In that case the
amendment, supplement or waiver shall bind each Holder of a Security who has
consented to it and, provided that notice of such amendment, supplement or
waiver is reflected on a Security that evidences the same debt as the consenting
Holder's Security, every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security as
directed and prepared by the Company about the changed terms and return it to
the Holder. Alternatively, if the Company so determines, the Company in exchange
for the Security shall issue and the Trustee shall authenticate a new Security
that reflects the changed terms.
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SECTION 9.06. Trustee Protected.
The Trustee need not sign any amendment, supplement or waiver
authorized pursuant to this Article that adversely affects the Trustee's rights.
The Trustee shall be entitled to receive and rely upon, in addition to the
documents required by Section 13.04, an Opinion of Counsel and an Officers'
Certificate that any supplemental indenture, modification, amendment or waiver
complies with the Indenture.
ARTICLE TEN
CONVERSION
SECTION 10.01. Conversion Privilege; Restrictive Legends.
A Holder of a Security may convert the principal of such Security
into Common Stock at any time during the period stated in paragraph 9 of the
Securities. The number of shares issuable upon conversion of a Security is
determined as follows: divide each $1,000 of the principal amount to be
converted by the Conversion Price in effect on the conversion date and round the
result to the nearest 1/100th of a share. The Conversion Price is subject to
adjustment in accordance with Section 10.06.
A Holder may convert a portion of the principal of such Security if
the portion is at least $1,000 principal amount or a whole multiple of $1,000
principal amount. Provisions of this Indenture that apply to conversion of all
of a Security also apply to conversion of a portion of it.
Any shares issued upon conversion of a Security shall bear the
Private Placement Legend set forth in Exhibit B(I) until after the second
anniversary of the later of the Issue Date for such Security and the last date
on which the Company or any Affiliate of the Company was the owner of such
shares or the Security (or any predecessor security) from which such shares were
converted (or such shorter period of time as permitted by Rule 144(k) under the
Securities Act or any successor provision thereunder or such longer period of
time as may be required under the Securities Act or applicable state securities
laws unless otherwise agreed by the Company and the Holder thereof).
SECTION 10.02. Conversion Procedure.
To convert a Security a Holder must satisfy the requirements in
paragraph 9 of the Securities. The date on which the Holder satisfies all those
requirements is the conversion date. As soon as practicable, the Company shall
deliver to the Holder through the Conversion Agent a certificate for the number
of full shares of Common Stock issuable upon the conversion and a check in lieu
of any fractional share. The Person in whose name the certificate is registered
shall be treated as a stockholder of record on and after the conversion date.
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Except as described below, no payment or adjustment will be made for
accrued interest on, or liquidated damages with respect to, a converted Security
or for dividends on any Common Stock issued on conversion. If any Security is
converted between a record date for the payment of interest and the next
succeeding interest payment date, unless such Security has been called for
redemption on a redemption date between such dates, such Security must be
accompanied by funds equal to the interest payable to the registered Holder on
such interest payment date on the principal amount so converted. A Security
converted on an interest payment date need not be accompanied by any payment,
and the interest on the principal amount of the Security being converted will be
paid on such interest payment date to the registered Holder of such Security on
the applicable record date.
If a Holder converts more than one Security at the same time, the
number of full shares issuable upon the conversion shall be based on the total
principal amount of the Securities converted.
Upon surrender of a Security that is converted in part the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
SECTION 10.03. Fractional Shares.
The Company will not issue fractional shares of Common Stock upon
conversion of Securities and instead will deliver a check in lieu of the
fractional share based upon the current market value of the Common Stock. 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 of the Common Stock on the Trading
Day immediately preceding the conversion date.
SECTION 10.04. Taxes on Conversion.
If a Holder converts its Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion. However, the Holder shall pay any such tax
which is due because the shares are issued in a name other than the Holder's
name.
SECTION 10.05. Company to Provide Stock.
The Company shall reserve out of its authorized but unissued Common
Stock or its Common Stock held in treasury enough shares of Common Stock to
permit the conversion of all of the Securities, including such greater number of
shares of Common Stock into which such Securities shall be convertible into as a
result of a Conversion Price adjustment contemplated by Section 10.06 hereof.
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All shares of Common Stock which may be issued upon conversion of
the Securities shall be validly issued, fully paid and non-assessable.
The Company will endeavor to comply with all securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Securities and will endeavor to list such shares on each national securities
exchange on which the Common Stock is listed.
SECTION 10.06. Adjustment of Conversion Price.
The Conversion Price shall be adjusted from time to time by the
Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business on
the date following the Record Date with respect to stockholders entitled
to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the Record Date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number
of shares constituting such dividend or other distribution, such reduction
to become effective immediately after the opening of business on the day
following the Record Date. If any dividend or distribution of the type
described in this Section 10.06(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which
would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price on the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants,
the Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect at the
opening of business on the date after such Record Date by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date plus the number of
shares which the aggregate offering price of the total number of shares so
offered for subscription or purchase would purchase at such Current Market
Price, and of which the denominator shall be the number of shares of
Common Stock outstanding on the close of business on the Record Date plus
the total number of additional shares of Common Stock so offered for
subscription or purchase. Such adjustment shall become effective
immediately after the opening of business on the day following the Record
Date fixed for determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not
delivered pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on
the basis of delivery of only the number of shares of Common Stock
actually delivered. In the event that such rights or warrants are not so
issued, the Conversion Price shall again be adjusted to be the Conversion
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Price which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants
had not been fixed. In determining whether any rights or warrants entitle
the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering
price of such shares of Common Stock, there shall be taken into account
any consideration received for such rights or warrants, the value of such
consideration, if other than cash, to be determined in good faith by the
Board of Directors.
(c) In case the outstanding shares of Common Stock shall be split or
subdivided into a greater number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such subdivision becomes effective shall be proportionately
reduced, and conversely, in case outstanding shares of Common Stock shall
be combined into a smaller number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be,
to become effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes
effective.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of
the Company (other than any dividends or distributions to which Section
10.06(a) applies) or evidences of its indebtedness, cash or other assets
(including securities, but excluding (1) any rights or warrants referred
to in Section 10.06(b), (2) dividends and distributions (A) in connection
with the liquidation, dissolution or winding up of the Company or (B) paid
exclusively in cash and (3) any capital stock, evidences of indebtedness,
cash or assets distributed upon a merger or consolidation to which Section
10.07 applies) (the foregoing hereinafter in this Section 10.06(d) called
the "Subject Securities"), unless the Company elects to reserve such
Subject Securities for distribution to the Holders upon conversion of the
Securities so that any such Holder converting Securities will receive upon
such conversion, in addition to the shares of Common Stock to which such
Holder is entitled, the amount and kind of such Subject Securities which
such Holder would have received if such Holder had converted its
Securities into Common Stock immediately prior to the Record Date for such
distribution of the Subject Securities, then, in each such case, the
Conversion Price shall be reduced so that the same shall be equal to the
price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on the Record Date with respect to such
distribution by a fraction of which the numerator shall be the Current
Market Price on such date less the fair market value on such date of the
portion of the Subject Securities so distributed applicable to one share
of Common Stock and the denominator shall be such Current Market Price,
such reduction to become effective immediately prior to the opening of
business on the day following the Record Date; provided, however, that in
the event the then fair market value of the portion of the Subject
Securities so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price on the Record Date, then in
lieu of the foregoing adjustment, adequate provision shall be made so that
each Holder shall have the right to receive upon conversion of a Security
(or any portion thereof) the amount of Subject Securities such Holder
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would have received had such Holder converted such Security (or portion
thereof) immediately prior to such Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.
For purposes of this Section 10.06(d), rights or warrants
distributed by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase shares of the Company's
capital stock (either initially or under certain circumstances) that are
(i) deemed to be transferred with such shares of Common Stock; (ii) not
exercisable; and (iii) issued in respect of future issuances of Common
Stock, until the occurrence of a specified event or events ("Trigger
Event") shall be deemed not to have been distributed and no adjustment to
the Conversion Price with respect thereto shall be made until the
occurrence of the earliest Trigger Event. If any such right or warrant is
subject to subsequent events, upon the occurrence of which such right or
warrant shall become exercisable to purchase different securities,
evidences of indebtedness or other assets or entitle the holder to
purchase a different number or amount of the foregoing or to purchase any
of the foregoing at a different purchase price, then the occurrence of
each such event shall be deemed to be the date of issuance and record date
with respect to a new right or warrant (and a termination or expiration of
the existing right or warrant without exercise by the holder thereof). In
addition, in the event of any distribution (or deemed distribution) of
rights or warrants, or any Trigger Event or other event (of the type
described in the preceding sentence) with respect thereto, that resulted
in an adjustment to the Conversion Price under this Section 10.06(d), (1)
in the case of any such rights or warrants which shall all have been
redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder of Common Stock with
respect to such rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Stock as of the date of
such redemption or repurchase, and (2) in the case of such rights or
warrants all of which shall have expired or been terminated without
exercise, the Conversion Price shall be readjusted as if such rights and
warrants had never been issued.
For purposes of this Section 10.06(d) and Sections 10.06(a) and (b),
any dividend or distribution to which this Section 10.06(d) is otherwise
applicable that also includes shares of Common Stock, or rights or
warrants to subscribe for or purchase shares of Common Stock applies (or
both), shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets, shares of capital stock, rights or
warrants (other than such shares of Common Stock or rights or warrants)
(and any Conversion Price reduction required by this Section 10.06(d) with
respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock
or such rights or warrants (and any further Conversion Price reduction
required by Sections 10.06(a) and (b) with respect to such dividend or
distribution shall then be made), except (A) the Record Date of such
dividend or distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution", "Record
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Date fixed for such determination" and "Record Date" within the meaning of
Section 10.06(a) and as "the date fixed for the determination of stockholders
entitled to receive such rights or warrants", "the Record Date fixed for the
determination of the stockholders entitled to receive such rights or warrants"
and "such Record Date" within the meaning of Section 10.06(b) and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the Record Date fixed for such
determination" within the meaning of Section 10.06(a).
With respect to any stockholder rights plan existing on the date hereof or
in the event that the Company implements any other stockholder rights plan, upon
conversion of the Securities the Holders will receive, in addition to the Common
Stock issuable upon such conversion, the rights issued under such rights plan
(notwithstanding the occurrence of an event causing such rights to separate from
the Common Stock at or prior to the time of conversion); provided, a Holder who
is a holder of Common Stock (or direct or indirect interests therein) at the
time of conversion, but who is not entitled as such a holder to such rights
pursuant to the terms of any such plan, shall not be eligible to receive any
such rights hereunder. Any distribution of rights or warrants pursuant to a
stockholder rights plan complying with the requirements set forth in the
immediately preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants for the purposes of the other provisions of
this Section 10.06(d).
(e) 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 10.07 applies or as part of a
distribution referred to in Section 10.06(d)), in an aggregate amount that,
combined together with (1) the aggregate amount of all other such all-cash
distributions to all holders of its Common Stock within the twelve (12) months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 10.06(e) has been made, and (2) the
aggregate of any cash plus the fair market value of consideration payable in
respect of any tender offer by the Company or any subsidiary for all or any
portion of the Common Stock concluded within the twelve (12) months preceding
the date of payment of such distribution, and in respect of which no adjustment
pursuant to Section 10.06(f) has been made (such aggregate amount, the "Common
Dividend Amount"), exceeds 10% of the product of the Current Market Price on the
Record Date with respect to such distribution times the number of shares of
Common Stock outstanding on such date (the "Market Capitalization"), then, and
in each such case, immediately after the close of business on such date, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on such Record Date by a fraction (i) the numerator of
which shall be equal to the Current Market Price on the Record Date less an
amount equal to the quotient of (x) the amount by which the Common Dividend
Amount exceeds 10% of the Market Capitalization and (y) the number of shares of
Common Stock outstanding on the Record Date and (ii) the denominator of which
shall be equal to the Current Market Price on such date; provided, however, that
in the event the portion of the cash so distributed applicable to one share of
Common Stock is equal to or greater than the Current Market Price of the
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Common Stock on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion of a Security (or any portion thereof) the amount of cash such Holder
would have received had such bolder convened such Security (or portion thereof)
immediately prior to such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(f) 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 shall
require the payment to holders of Common Stock of an aggregate consideration
that together with
(1) the aggregate of the cash plus the fair market value of
consideration payable in respect of any other tender offers by the Company
or any of its subsidiaries for all or any portion of the Common Stock
expiring within the twelve (12) months preceding the expiration of such
tender offer and in respect of which no adjustment pursuant to this
Section 10.06(f) has been made, and
(2) the aggregate amount of any all-cash distributions to all
holders of the Company's Common Stock made within twelve (12) months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to Section 10.06(e) has been made,
exceeds 10% of the product of the Current Market Price as of the time of
expiration of such tender offer times the number of shares of Common Stock
outstanding at such time, then, and in each such case, immediately prior to the
opening of business on the day after the expiration of such tender offer, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the date of the expiration of such tender offer by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding on the date of expiration of the tender offer multiplied by the
Current Market Price of the Common Stock on the Trading Day next succeeding the
date of expiration of the tender offer and the denominator shall be the sum
of (x) the fair market value of the aggregate consideration payable for all
shares of Common Stock validly tendered and not withdrawn as of the date of
expiration of the tender offer and (y) the product of the number of shares of
Common Stock outstanding less all shares validly tendered and not withdrawn as
of the date of expiration of the tender offer and the Current Market Price of
the Common Stock on the Trading Day next succeeding the date of expiration of
the tender offer, such reduction (if any) to become effective immediately prior
to the opening of business on the day following the date of expiration of the
tender offer. In the event the Company is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender offer had not been made. If the application of
this Section 10.06(f) to any tender offer would result in an
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increase in the Conversion Price, no adjustment shall be made for such tender
offer under this Section 10.06(f).
(g) In case of a tender or exchange offer made by a Person other than the
Company or any subsidiary for an amount which increases such Person's ownership
of Common Stock to more than 25% of the Common Stock outstanding and involves
the payment by such Person of consideration per share of Common Stock having a
fair market value that exceeds the Current Market Price of the Common Stock on
the Trading Day next succeeding the closing date of such offer, and, as of the
closing date of such offer, the Board of Directors does not recommend rejection
of such offer, then the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect on the
closing date of such offer by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding on the closing date of such offer
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the closing date of such offer and the denominator shall be the
sum of (x) the fair market value of the aggregate consideration payable for all
shares validly tendered or exchanged and not withdrawn as of the closing date of
such offer and (y) the product of the number of shares of Common Stock
outstanding less all shares validly tendered and not withdrawn as of the closing
date of such offer and the Current Market Price of the Common Stock on the
Trading Day next succeeding the closing date of such offer, such reduction to
become effective immediately prior to the opening of business on the day
following the closing date of such offer. In the event such Person is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment described
in this Section 10.06(g) shall not be made if, as of the closing date of such
offer, the offering documents with respect to such offer disclose a plan or
intention to cause the Company to engage in any transaction described in Article
Five.
(h) For purposes of this Section 10.06, the following terms have the
meanings indicated:
(1) "Closing Price" with respect to any securities on any day shall
mean the closing sale price regular way on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the Nasdaq National Market or
New York Stock Exchange, as applicable, or, if such security is not listed
or admitted to trading on such Nasdaq National Market or New York Stock
Exchange, on the principal national security exchange or quotation system
on which such security is quoted or listed or admitted to trading, or, if
not quoted or listed or admitted to trading on any national securities
exchange or quotation system, the average of the closing bid and asked
prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in
such manner as furnished by any New York Stock Exchange member
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firm selected from time to time by the Board of Directors for that
purpose, or a price determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution.
(2) "Current Market Price" shall mean the average of the Closing
Prices per share of Common Stock for the ten (10) consecutive Trading Days
immediately prior to the date for which a Current Market Price is
required; provided, however, that:
(1) if the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such computation)
that requires an adjustment to the Conversion Price pursuant to
Section 10.06(a), (b), (c), (d), (e), (f) or (g) occurs during such
ten consecutive Trading Days then the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by
which the Conversion Price is so required to be adjusted as a result
of such other event,
(2) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Section 10.06(a), (b), (c), (d),
(e), (f) or (g) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in
question, then the Closing Price for each Trading Day on and after
the "ex" date for such other event shall be adjusted by multiplying
such Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such
other event, and
(3) if the "ex" date for the issuance or distribution
requiring such computation is prior to the day in question, after
taking into account any adjustment required pursuant to clause (1)
or (2) of this proviso, the Closing Price for each Trading Day on or
after such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value of the evidences of
indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business
on the day before such "ex" date.
For purposes of any computation under Sections 10.06(f) or (g), the
Current Market Price of the Common Stock on any date shall be deemed to be
the average of the daily Closing Prices per share of Common Stock for such
day and the next two succeeding Trading Days; provided, however, that if
the "ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant
to Section 10.06(a), (b), (c), (d), (e), (f) and (g) occurs on or after
the date of expiration of the tender or exchange offer requiring such
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computation and prior to the day in question, the Closing Price for each
Trading Day on and after the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the reciprocal of the
fraction by which the Conversion Price is so required to be adjusted as a
result of such other event.
For purposes of this definition, the term "ex" date, (1) when used
with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the relevant exchange or in
the relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (2) when used with respect
to any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such exchange
or in such market after the time at which such subdivision or combination
becomes effective, and (3) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration Time
of such offer.
(3) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction determined in
good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of stockholders entitled to receive such
cash, securities or other property (whether such date is fixed by the
Board of Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or another
national security exchange, a day on which the New York Stock Exchange or
such other national security exchange, as the case may be, is open for
business, (y) if the applicable security is quoted on the Nasdaq National
Market, a day on which trades may be made thereon or (z) if the applicable
security is not so listed, admitted for trading or quoted, any day other
than a Saturday or Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 10.06(a), (b), (c), (d), (e), (f) and
(g), as the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
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To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days and the reduction is irrevocable during the
period. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to the Holder of each Security at his last
address appearing on the register maintained by the Registrar a notice of the
reduction at least fifteen (15) days prior to the date the reduced Conversion
Price takes effect, and such notice shall state the reduced Conversion Price and
the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
however, any adjustment that would otherwise be required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article Ten shall be made by the Company and shall be
made to the nearest cent or to the nearest one hundredth of a share, as the case
may be. No adjustment need be made for a change in the par value or no par value
of the Common Stock.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee, and any Conversion Agent other
than the Trustee, an Officers' Certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Trust Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Price and may assume without
inquiry that the last Conversion Price of which it has knowledge remains in
effect. Promptly after delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Price to the Holder
of each Security at his last address appearing on the register maintained by the
Registrar, within twenty (20) days of the effective date of such adjustment.
Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.
(l) In any case in which this Section 10.06 provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such Record Date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such Holder any amount in cash in lieu of any fraction pursuant to
Section 10.03.
(m) For purposes of this Section 10.06, 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
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Common Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
SECTION 10.07. Effect of Reclassification, Consolidation, Merger or Sale.
In the case of (i) any reclassification or change of the outstanding
shares of Common Stock (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), (ii) any consolidation, merger or combination of the Company
with another corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, or (iii) any sale or
conveyance of the properties and assets of the Company as, or substantially as,
an entirety to any other corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then,
unless an adjustment with respect thereto shall be made pursuant to Section
10.06, the Company or the successor or purchasing corporation, as the case may
be, shall execute with the Trustee a supplemental indenture providing that the
Securities shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of a number of shares of Common Stock issuable upon conversion of
such Securities immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance. Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article Ten. If, in the case
of any such reclassification, change, consolidation, merger, combination, sale
or conveyance, the stock or other securities and assets receivable thereupon by
a holder of shares of Common Stock include shares of stock or other securities
and assets of a Person other than the successor or purchasing corporation, as
the case may be, in such reclassification, change, consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holders as the Board of Directors shall reasonably
consider necessary by reason of the foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Securities, at its address appearing on
the register maintained by the Registrar, within twenty (20) days after
execution thereof. Failure to deliver such notice shall not affect the legality
or validity of such supplemental indenture.
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SECTION 10.08. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that would require an
adjustment in the conversion rate;
(2) the Company proposes to take any action that would require a
supplemental indenture pursuant to Section 10.07; or
(3) there is a proposed liquidation, winding up or dissolution of
the Company,
the Company shall mail to Holders a notice stating the proposed record date for
a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 10 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
SECTION 10.09. Company Determination Final.
Any determination that the Board of Directors makes pursuant to this
Article is conclusive, absent manifest error.
SECTION 10.10. Trustee's Disclaimer.
The Trustee has no duty to determine when an adjustment under this
Article or under the terms of the Securities should be made, how it should be
made or what it should be. Such information shall be timely provided to the
Trustee in an Officers' Certificate. The Trustee has no duty to determine
whether any provisions of a supplemental indenture under Section 10.07 are
correct. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee shall not
be responsible for the Company's failure to comply with this Article. Each
Conversion Agent other than the Company shall have the same protection under
this Section 10.10 as the Trustee.
ARTICLE ELEVEN
[RESERVED]
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ARTICLE TWELVE
SUBORDINATION
SECTION 12.01. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that the indebtedness
represented by the Securities and the payment of the principal of (and premium,
if any) and interest on each and all of the Securities is hereby expressly
subordinate and junior, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all Senior Indebtedness.
(a) Upon any distribution of assets of the Company, upon any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshaling of the assets
and liabilities of the Company or otherwise, then the holders of all Senior
Indebtedness shall first be entitled to receive payment of the full amount due
thereon in cash or other consideration satisfactory to the holders of Senior
Indebtedness in respect of principal (and premium, if any) and interest, or
provision shall be made for such amount in cash or other consideration
satisfactory to the holders of Senior Indebtedness, before the Holders of any of
the Securities are entitled to receive any payment or distribution of any
character, whether in cash, securities or other property, on account of the
principal of (or premium, if any) or interest on the indebtedness evidenced by
the Securities.
For purposes of this Article Twelve, the words, "cash, securities or
other property" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Twelve with
respect to the Securities to the payment of all Senior Indebtedness which may at
the time be outstanding; provided that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any reorganization or readjustment,
and (ii) the rights of the holders of Senior Indebtedness (other than leases
which are not assumed by the Company or the new corporation, as the case may be)
are not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article Five shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 12.01(a) if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Five.
(b) No payment shall be made by the Company with respect to the
principal of, premium, if any, or interest on the Securities or to acquire any
of the Securities, if (i) any default in payment of the principal of or premium,
if any, or interest on, rent under, or any other payment obligation under any
Senior Indebtedness occurs and is continuing (a "Payment Default") beyond any
applicable
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grace period with respect thereto, unless and until all such payments due in
respect of such Senior Indebtedness have been paid in full in cash or other
consideration satisfactory to holders of Senior Indebtedness or such default
shall have been cured or waived or shall have ceased to exist, (ii) any event of
default, other than a Payment Default, with respect to any Designated Senior
Indebtedness occurs and is continuing permitting the holders of such Designated
Senior Indebtedness (or a trustee or other representative on behalf of the
holders thereof) to declare such Designated Senior Indebtedness due and payable
prior to the date on which it would otherwise have become due and payable, and
the Trustee receives notice thereof from the Company or by any holders of such
Designated Senior Indebtedness (or a trustee or other representative on behalf
of the holders thereof) (the "Payment Blockage Notice"), for a period (the
"Payment Blockage Period") ending on the earlier of the date on which such event
of default shall have been cured or waived or shall have ceased to exist or 179
days after receipt of the Payment Blockage Notice, or (iii) any judicial
proceeding shall be pending with respect to any such default in payment or event
of default; provided, further, any number of additional Payment Blockage Periods
may be commenced during an existing Payment Blockage Period; provided, however,
that no such additional Payment Blockage Period shall extend beyond the initial
Payment Blockage Period. Notwithstanding anything in the subordination
provisions of this Indenture or the Securities to the contrary, (x) in no event
will a Payment Blockage Period extend beyond 179 days from the date of the
Payment Blockage Notice in respect thereof was given and (y) there shall be a
period of at least 181 consecutive days in each 360-day period when no Payment
Blockage Period is in effect. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the Trustee
shall be the basis for a subsequent payment blockage notice.
(c) If the maturity of the Securities is accelerated, no payment may
be made on the Securities until all amounts due or to become due on Senior
Indebtedness have been paid in full in cash or other consideration satisfactory
to holders of Senior Indebtedness or until such acceleration has been cured or
waived.
(d) In the event that, notwithstanding the foregoing provisions of
Sections 12.01(a), (b) and (c), any payment on account of principal of or
interest on the Securities shall be made by or on behalf of the Company and
received by the Trustee, by any Holder or by any Paying Agent (or, if the
Company is acting as its own Paying Agent, money for any such payment shall be
segregated and held in trust), at a time when such payment is not permitted by
any of such provisions, then, unless and until all Senior Indebtedness (or
Designated Senior Indebtedness, in the case of Section 12.01(b)) is paid in full
in cash or other consideration satisfactory to the holders thereof, or such
payment is otherwise permitted to be made by the provisions of each of Sections
12.01(a), 12.01(b) and 12.01(c) (subject, in each case, to the provisions of
Section 12.07), such payment on account of principal of or interest on the
Securities shall be held in trust for the benefit of, and shall be immediately
paid over to, the holders of Senior Indebtedness (or Designated Senior
Indebtedness, in the case of Section 12.01(b)) or their representative or
representatives or the trustee or trustees under any indenture under which any
instruments evidencing any of the Senior Indebtedness (or Designated Senior
Indebtedness, in the case of Section 12.01(b)) may have been issued, as their
interests may appear.
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Regardless of anything to the contrary herein, nothing shall prevent
(A) any payment by the Company or the Trustee to Holders of amounts in
connection with a redemption of Securities if (i) notice of such redemption has
been given pursuant to Section 3.01 prior to the receipt by the Trustee of a
Payment Blockage Notice, and (ii) such notice of redemption is given not earlier
than 75 days before the Redemption Date, or (B) any payment by the Trustee to
the Holders of amounts deposited with it pursuant to Section 8.01.
SECTION 12.02. Subrogation.
Subject to the payment in full of all Senior Indebtedness to which
the indebtedness evidenced by the Securities is in the circumstances
subordinated as provided in Section 12.01, the Holders of the Securities
(together with the holders of any other indebtedness of the Company which is
subordinate in right of payment to the payment in full of all Senior
Indebtedness, which is not subordinate 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 such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to such Senior Indebtedness until all amounts owing on the Securities
shall be paid in full, and, as between the Company, its creditors other than
holders of such Senior Indebtedness, and the Holders of the Securities, no such
payment or distribution made to the holders of Senior Indebtedness by virtue of
this Article which otherwise would have been made to the Holders of the
Securities shall be deemed to be a payment by the Company on account of such
Senior Indebtedness, 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, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
SECTION 12.03. Obligation of Company Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
SECTION 12.04. Modification of Terms of Senior Indebtedness.
Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under any instrument creating or evidencing Senior Indebtedness,
including without limitation the waiver of default thereunder, may be made or
done all without notice to or assent from the Holders of the Securities or the
Trustee.
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No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Indebtedness is outstanding or of such Senior Indebtedness, whether or
not such release is in accordance with the provisions of any applicable
document, shall in any way alter or affect any of the provisions of this Article
or of the Securities relating to the subordination thereof.
SECTION 12.05. [Reserved]
SECTION 12.06. Effectuation of Subordination by Trustee.
Each Holder of Securities, by his acceptance thereof, authorizes and
directs the Trustee in his or her behalf to take such action as may be necessary
or appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his or attorney-in-fact for any and all such purposes.
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or agent or other Person making any
payment or distribution, delivered to the Trustee or to the Holders of the
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, and as to other facts pertinent to the right of
such Persons under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Persons pending judicial determination as
to the right of such Persons to receive such payment.
SECTION 12.07. Knowledge of Trustee.
Notwithstanding the provisions of this Article or any other
provisions of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any Senior Indebtedness, of any default in payment of
principal, premium (if any) or interest on any Senior Indebtedness, or of any
facts which would prohibit the making of any payment of moneys to or by the
Trustee, or the taking of any other action by the Trustee, unless and until a
Trust Officer of the Trustee having responsibility for the administration of the
trust established by this Indenture shall have received written notice thereof
from the Company, any Holder of Securities, any Paying or Conversion Agent of
the Company or the holder or representative of any class of Senior Indebtedness,
and, prior to the receipt of any such written notice, the Trustee shall be
entitled in all respects to assume that no such default or facts exist;
provided, however, that unless on the third Business Day prior to the date upon
which by the terms hereof any such moneys may become payable for any purpose the
Trustee shall have received the notice provided for in this Section 12.07, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such date.
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SECTION 12.08. Trustee's Relation to Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this
Article with respect to any Senior Indebtedness at the time held by it, to the
same extent as any other holder of Senior Indebtedness 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 7.07.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall pay over or
deliver to Holders, the Company or any other Person moneys or assets to which
any holder of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.
SECTION 12.09. Rights of Holders of Senior Indebtedness Not
Impaired.
No right of any present or future holder of any Senior Indebtedness
to enforce the subordination herein shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any noncompliance 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.
SECTION 12.10. Certain Conversions Not Deemed Payment.
For the purposes of Article Ten only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article
Ten shall not be deemed to constitute a payment or distribution on account of
the principal of, premium, if any, or interest on Securities or on account of
the purchase or other acquisition of Securities, and (2) the payment, issuance
or delivery of cash (except in satisfaction of fractional shares pursuant to
Section 10.03), property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of the
principal of, premium, if any, or interest on such Security. For the purposes of
this Section 12.10, the term "junior securities" means (a) shares of any stock
of any class of the Company or (b) securities of the Company that are
subordinated in right of payment to all Senior Indebtedness 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 Twelve or
elsewhere in this Indenture or in the Securities is intended to or shall impair,
as among the Company, its creditors (other than holders of Senior Indebtedness)
and the Holders, the right, which is absolute and unconditional, of the Holder
of any Security to convert such note in accordance with Article Ten.
<PAGE>
-57-
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 13.02. Notices.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person, mailed by first-class
mail or by express delivery to the other's address stated in this Section 13.02.
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by
first-class mail to its address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
The Company's address is:
Alexion Pharmaceuticals, Inc.
25 Science Park
New Haven, Connecticut 06511
Attention: President
The Trustee's address is:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Capital Markets Fiduciary Services
<PAGE>
-58-
SECTION 13.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Each signer of an Officers' Certificate or an Opinion of Counsel may
(if so stated) rely, effectively, upon an Opinion of Counsel as to legal matters
and an Officers' Certificate as to factual matters if such signer reasonably and
in good faith believes in the accuracy of the document relied upon.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
<PAGE>
-59-
SECTION 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules and set reasonable requirements for their respective functions.
SECTION 13.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in The City of New York, in the State
of New York or in the city in which the Trustee administers its corporate trust
business. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on that payment for the intervening
period.
A "Business Day" is a day other than a Legal Holiday.
SECTION 13.08. No Recourse Against Others.
All liability described in the Securities of any director, officer,
employee or stockholder, as such, of the Company is waived and released.
SECTION 13.09. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.10. Governing Law.
The laws of the State of New York, without regard to principles of
conflicts of law, shall govern this Indenture and the Securities.
SECTION 13.11. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or a subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 13.12. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
<PAGE>
-60-
SECTION 13.13. Separability.
In case any provision in this Indenture or in 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
and a Holder shall have no claim therefor against any party hereto.
SECTION 13.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
<PAGE>
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first above written.
ALEXION PHARMACEUTICALS, INC.
By: /s/ David Keiser
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Trustee
By: /s/ Kathleen Perry
-----------------------------------
Name: Kathleen Perry
Title: Vice President
<PAGE>
EXHIBIT A
REGISTERED [Face of Security]
NUMBER DOLLARS
ALEXION PHARMACEUTICALS, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
ALEXION PHARMACEUTICALS, INC., a Delaware corporation (herein called
the "Company"), for value received, hereby promises to pay to
or registered assigns, the principal sum of Dollars on March 15, 2007,
and to pay interest thereon as provided on the reverse hereof on the principal
sum, until the principal hereof and any unpaid and accrued interest is paid or
duly provided for. The right to payment of principal, premium, if any, and
interest is subordinated to the rights of Senior Indebtedness as set forth in
the Indenture referred to on the reverse side hereof.
Interest Payment Dates: March 15 and September 15, with the first
payment to be made on September 15, 2000.
Record Dates: March 1 and September 1.
<PAGE>
IN WITNESS WHEREOF, ALEXION PHARMACEUTICALS, INC. has caused this
instrument to be duly signed.
ALEXION PHARMACEUTICALS, INC.
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:
---------------------------------
Authorized Officer
A-2
<PAGE>
[REVERSE OF SECURITY]
ALEXION PHARMACEUTICALS, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
1. Interest. Alexion Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on March 15 and September 15 of each year, with the
first payment to be made on September 15, 2000. Interest on the Securities will
accrue on the principal amount from the most recent date to which interest has
been paid or duly provided for or, if no interest has been paid, from March 8,
2000. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Maturity. The Securities will mature on March 15, 2007 unless
earlier converted, redeemed or repurchased pursuant to the terms hereof and the
Indenture.
3. Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the record date set forth on the face
of this Security next preceding the applicable interest payment date except that
(i) interest payable upon redemption or repurchase, unless the date of
redemption or repurchase is an interest payment date, will be payable to the
Person to whom the principal is payable and (ii) in the case of any Security or
portion of any Security that is converted into Common Stock during the period
from, but excluding, a record date for any interest payment date to, but
excluding, that interest payment date either (A) if the Security, or portion of
the Security, has been called for redemption on a redemption date that occurs
during that period, or is to be repurchased on a Repurchase Date that occurs
during that period, the Company will not be required to pay interest on that
interest payment date in respect of any Security, or portion of any Security,
that is so redeemed or repurchased; or (B) if otherwise, any Security or portion
of any Security that is not called for redemption but is submitted for
conversion during that period must be accompanied by funds equal to the interest
payable on that interest payment date on the principal amount so converted.
Holders must surrender Securities to a Paying Agent to collect the principal
payments. The Company will pay the principal, premium, if any, and interest in
money of the United States that at the time of payment is legal tender.
Principal and interest may, at the Company's option, be paid either (i) by check
mailed to the address of the Person entitled to the interest as it appears in
the register kept by the Registrar (provided (a) payments to the Depository will
be made by wire transfer of immediately available funds to the account of the
Depository or its nominee and (b) a Holder with an aggregate principal amount of
Securities in excess of $10 million will, at the written election of the Holder,
filed on or before the relevant record date with the Trustee, be paid by wire
transfer in immediately available funds); or (ii) by transfer to an account
maintained by that Person located in the U.S.
4. Paying Agent, Registrar, Conversion Agent. Initially, The Chase
Manhattan Bank (the "Trustee") will act as Paying Agent, Registrar and
Conversion Agent. The Company may change any Paying Agent, Registrar or
Conversion Agent without notice. The Company may act in any such capacity.
A-3
<PAGE>
5. Indenture. The Company issued the Securities under an Indenture
dated as of March 8, 2000 (the "Indenture") between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code ss.ss. 77aaa-77bbbb) (the "Act") as in effect on the date of the Indenture.
The Securities are subject to all such terms, and Holders are referred to the
Indenture and the Act for a statement of such terms. The Securities are general
unsecured subordinated obligations of the Company limited to a maximum of
$120,000,000 aggregate principal amount (plus such additional amount (up to an
aggregate of $130,000,000) purchased by the Initial Purchasers pursuant to the
option described in Section 2.02), except as otherwise provided in the Indenture
(except for Securities issued in substitution for destroyed, mutilated, lost or
stolen Securities). Terms used herein which are defined in the Indenture have
the meanings assigned to them in the Indenture.
6. Optional Redemption by the Company. At any time on or after March
20, 2003, the Company may redeem the Securities on at least 30 days' notice as a
whole or, from time to time, in part at the following prices, expressed as a
percentage of the principal amount, together with accrued interest to, but
excluding, the date fixed for redemption:
Redemption
Period Price
- ------ ----------
Beginning March 20, 2003 and ending on March 14, 2004 ........... 103.286%
Beginning March 15, 2004 and ending on March 14, 2005 ........... 102.464%
Beginning March 15. 2005 and ending on March 14. 2006 ........... 101.643%
Beginning March 15. 2006 and ending on March 14, 2007 ........... 100.822%
and 100% on March 15, 2007. My accrued interest becoming due on the date fixed
for redemption will be payable to the holders of record on the relevant record
date of the Securities being redeemed.
7. Notice of Redemption. Notice of redemption pursuant to paragraph
6 will be mailed at least 30 days before the redemption date to each Holder of
Securities to be redeemed at its registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in whole
multiples of $1,000 principal amount. On and after the redemption date interest
ceases to accrue on Securities or portions of them called for redemption.
8. Repurchase at Option of Holder. Pursuant to Section 3.07 of the
Indenture within 15 days after a Repurchase Event occurs, the Company is
required to give notice of the Repurchase Event to the Holders. Each Holder has
the right, at its option, to require the Company to repurchase all or any
portion of the Securities 40 days after the notice of repurchase event is
mailed. The Repurchase Price will be 105% of the principal amount of the
Securities submitted for repurchase, plus accrued and unpaid interest to, but
excluding, the Repurchase Date. If a Repurchase Date is an interest payment
date, then the interest payable on that date will be paid to the holder of
record on the relevant record date. Subject to the conditions of Section 3.07 of
the Indenture, the Company, at its option, instead of paying the Repurchase
Price in cash, may pay the Repurchase Price in Common Stock, valued at 95% of
the average of the Closing Prices for the five Trading Days immediately before
and including the third Trading Day preceding the Repurchase Date.
9. Conversion. A Holder of a Security may convert the principal of
such Security into Common Stock at any time after the date of original issuance
of the Security to the close of
A-4
<PAGE>
business on the business day prior to March 15, 2007, or (x) if the Security
is called for redemption by the Company, the Holder may convert it at any
time before the close of business on the date that is one business day before
the date fixed for such redemption, or (y) if the Security is to be
repurchased by the Company pursuant to paragraph 8 hereof, the Holder may
convert it at any time before the close of business on the date that is one
business day before the date fixed for such repurchase. The initial
Conversion Price is $106.425 per share of Common Stock, subject to adjustment
in certain circumstances as set forth in Section 10.06 of the Indenture. To
determine the number of shares issuable upon conversion of a Security, divide
the principal amount to be converted by the Conversion Price in effect on the
conversion date and round the result to the nearest 1/100th share. The
Company is not required to issue fractional shares of Common Stock upon
conversion and, instead, will pay a cash amount as provided in Section 10.03
of the Indenture. Except as provided in Article Ten of the Indenture, no
payment or adjustment for the principal of, premium, if any, interest on or
liquidated damages with respect to, the Securities or for dividends on any
Common Stock will be made. If a Holder surrenders a Security for conversion
between the record date for the payment of interest and the next interest
payment date, such Security, when surrendered for conversion, must be
accompanied by payment of an amount equal to the interest thereon which the
registered Holder on such record date is to receive. A Security which the
Holder has elected to be repurchased may be converted only if the Holder
withdraws its election to have such Security repurchased in accordance with
the terms of the Indenture before the close of business on the business day
prior to the Repurchase Date.
To convert a Security a Holder must (1) complete and sign the
Conversion Notice, with appropriate signature guarantee, on the back of the
Security, (2) surrender the Security to a Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Registrar or
Conversion Agent, (4) pay the amount of interest, if any, the Holder may be paid
as provided in the last sentence of the above paragraph and (5) pay any transfer
or similar tax if required. A Holder may convert a portion of a Security if the
portion is $1,000 principal amount or a whole multiple of $ 1,000 principal
amount.
Any shares issued upon conversion of a Security shall bear the
Private Placement Legend until after the second anniversary of the later of the
issue date for the Securities and the last date on which the Company or any
Affiliate of the Company was the owner of such shares or the Security (or any
predecessor security) from which such shares were converted (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act or any
successor provision thereunder) (or such longer period of time as may be
required under the Securities Act or applicable state securities laws as set
forth in the Opinion of Counsel delivered to the Conversion Agent, unless
otherwise agreed by the Company and the Holder thereof).
10. Subordination. The Securities are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full of all Senior Indebtedness. Each Holder by accepting a
Security agrees to such subordination and authorizes the Trustee to give it
effect.
11. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 principal amount and
whole multiples of $1,000 principal amount. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents. No service charge shall be made for any
such registration
A-5
<PAGE>
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Registrar need not exchange or register the transfer of any Security
selected for redemption in whole or in part. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days before the
mailing of a notice of redemption of the Securities selected to be redeemed.
12. Persons Deemed Owners. The registered Holder of a Security may
be treated as the owner of such Security for all purposes.
13. Merger or Consolidation. The Company shall not consolidate with,
or merge into, or transfer or lease all or substantially all of its assets to,
any Person unless, among other things, the Person is organized under the laws of
the United States, any State thereof or the District of Columbia and such Person
assumes by supplemental indenture all the obligations of the Company under the
Securities, the Indenture and the Registration Rights Agreement and after giving
effect to the transaction no Default or Event of Default exists.
Notwithstanding the foregoing, any subsidiary of the Company may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or any other subsidiary or subsidiaries of the Company.
14. Amendments, Supplements and Waivers. Subject to certain
exceptions, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate principal amount
of the Securities then outstanding, and any existing Default or Event of Default
may be waived with the consent of the Holders of a majority in aggregate
principal amount of the Securities then outstanding. Without notice to or the
consent of any Holder, the Indenture or the Securities may be amended or
supplemented to cure any ambiguity, omission, defect or inconsistency, to
provide for uncertificated Securities in addition to certificated Securities, to
comply with Sections 5.01 and 10.07 of the Indenture or to make any change that
does not adversely affect the rights of any Holder.
15. Defaults and Remedies. An Event of Default includes the
occurrence of any or the following: default in payment of the principal of or
any premium on the Securities; default for 30 days in payment of interest;
failure by the Company for 90 days after notice to it to comply with any of its
other agreements in the Indenture or the Securities; and certain events of
bankruptcy or insolvency. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may declare all the Securities to be due and
payable. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
16. Registration Rights. The Holders are entitled to shelf
registration rights as set forth in the Registration Rights Agreement. The
Holders shall be entitled to receive liquidated damages in certain
circumstances, all as set forth in the Registration Rights Agreement.
A-6
<PAGE>
17. Trustee Dealings with Company. The Trustee under the Indenture,
or any banking institution serving as successor Trustee thereunder, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.
18. No Recourse Against Others. No past, present or future director,
officer, employee or stockholder, as such, of the Company shall have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
19. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
20. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM ( tenants in common), TEN ENT (=
tenants by the entirety), JT TEN (= joint tenants with right of survivorship and
not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
ALEXION PHARMACEUTICALS, INC.
25 SCIENCE PARK
NEW HAVEN, CONNECTICUT 06511
ATTENTION: PRESIDENT
A-7
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
___________________________________________
________________________________________________________________________________
(please print or type name and address)
________________________________________________________________________________
________________________________________________________________________________
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints
________________________________________________________________________________
attorney to transfer the Security on the books of the Company with full power of
substitution in the premises.
Dated:_______________________________ ________________________________________
NOTICE: The signature on this assignment
must correspond with the name as it
appears upon the face of the within
Security in every particular without
alteration or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee: ___________________________________________________________
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.)
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall have been suspended or terminated at the date of the
transfer) and (ii) March 7, 2002 the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with
transfer:
A-8
<PAGE>
[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
50l(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of which
letter can be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign purchaser" in compliance
with Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(5) ___ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) ___ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) ___ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
|_| The transferee is an Affiliate of the Company.
(If the Security is transferred to an Affiliate, the restrictive legend must
remain on the Security for two years following the date of the transfer).
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
Person other than the registered Holder thereof; provided, however, that if item
(3),(4),(5) or (7) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Securities, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4)) and other information as the Trustee or the Company have
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
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<PAGE>
Dated: _____________________________ Signed: ________________________________
(Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee: ___________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ______________________________ ________________________________________
NOTICE: To be executed by an
executive officer
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<PAGE>
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
|_|
To convert only part of this Security, state the principal amount to be
converted (must be in multiples of $1,000):
$_______________________________________________________________________________
If you want the stock certificate made out in another person's name, fill in the
form below:
________________________________________________________________________________
(Insert other person's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type other person's name, address and zip code)
Date: ___________ Signature(s): ______________________________________________
______________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.)
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<PAGE>
Signature(s) guaranteed by: ____________________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include membership
or participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the
Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.)
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<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE NOTICE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.07 of the Indenture, check the box: |_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.07 of the Indenture, state the principal
amount:
$ _____________________________________
(in an integral multiple of S 1,000)
Date: ________________ Signature(s): __________________________
________________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by: ________________________________________
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.)
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<PAGE>
EXHIBIT B
FORM OF LEGENDS
I. PRIVATE PLACEMENT LEGEND
Each Security issued under the Indenture shall bear a legend (and
any common stock issued upon conversion of such Security shall bear a comparable
legend) substantially in the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER
HEREOF THAT (A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
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II. GLOBAL SECURITY LEGEND
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
<PAGE>
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[Date]
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Capital Markets Fiduciary Services
Ladies and Gentlemen:
In connection with our proposed purchase of 5 3/4% Convertible
Subordinated Notes Due 2007 (the "Securities") of Alexion Pharmaceuticals, Inc.
(the "Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated March 3, 2000, relating to the Securities and such
other information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agreed to the matters
stated on page 1 of the Offering Memorandum and in the section entitled
"Notice to Investors" of the Offering Memorandum, including the
restrictions on duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in this Indenture
relating to the Securities (as described in the Offering Memorandum) and
the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended
(the "Securities Act") and all applicable state securities laws.
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not
be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Securities prior
to the date that is two years after the original issuance of the
Securities, we will do so only (i) to the Company or any of its
subsidiaries, (ii) inside the United States in accordance with Rule 144A
under the Securities Act to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act), (iii) inside the United States to
an institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to the Trustee (as defined in the Indenture relating to the
Securities), a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the Securities (the
form of which letter can be obtained from the Trustee), (iv) outside the
United States in accordance with Rule 904 of Regulation S under the
Securi-
C-1
<PAGE>
ties Act, (v) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available), or (vi) pursuant to an
effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing any of the Securities from us a
notice advising such purchaser that resales of the Securities are
restricted as stared herein.
4. We are not acquiring the Securities for or on behalf of, and will
not transfer the Securities to, any pension or welfare plan (as defined in
Section 3 of the Employee Retirement Income Security Act of 1974), except
as permitted by law.
5. We understand that, on any proposed resale of any Securities, we
will be required to furnish to the Trustee and the Company such
certification, legal opinions and other information as the Trustee and the
Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Securities
purchased by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
50l(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or their investment, as the case may be.
7. We are acquiring the Securities purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
C-2
<PAGE>
You, the Company, the Trustee and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: ____________________________________
Name:
Title:
C-3
<PAGE>
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[Date]
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Capital Markets Fiduciary Services
Re: Alexion Pharmaceuticals, Inc. (the "Company")
5 3/4% Convertible Subordinated Notes
due 2007 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of $ aggregate
principal amount of the Securities, we confirm that such purchase has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1)* [We are not a U.S. person and are not acquiring the Securities
for the account or benefit of any U.S. person]. [We are a U.S. person who
purchased securities in a transaction that did not require registration
under the Act.]
(2) We agree to resell the Securities only in accordance with the
provisions of Regulation S, pursuant to registration under the Securities
Act, or pursuant to an available exemption from registration; and we agree
not to engage in hedging transactions with regard to such securities
unless in compliance with the Securities Act.
- ----------
* One of the two following sentences must be used.
D-1
<PAGE>
You, the Company and counsel for the Company are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: ____________________________________
Authorized Signature
D-2
<PAGE>
EXHIBIT E
Form of Notice of Transfer Pursuant to Registration Statement
[Date]
Alexion Pharmaceuticals, Inc.
25 Science Park
New Haven, Connecticut 06511
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY
Attention: Capital Markets Fiduciary Services
Re: Alexion Pharmaceuticals, Inc. (the "Company")
5 3/4% Convertible Subordinated Notes Due 2007
(the "Securities")
Ladies and Gentlemen:
Please be advised that ______________ has transferred $ ____________
aggregate principal amount of the Securities or __ shares of the Company's
common stock, $0.0001 par value per share, issuable on conversion of the
Securities ("Stock") pursuant to an effective Shelf Registration Statement on
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
Securities or Stock is named as a "Selling Security Holder" in the Prospectus
dated or in amendments or supplements thereto, and that the aggregate
principal amount of the Securities, or number of shares of Stock transferred are
[a portion of] the Securities or Stock listed in such Prospectus, as amended or
supplemented, opposite such owner's name.
Very truly yours,
________________________________________
(Name)
E-1
<PAGE>
EXHIBIT F
Form of Opinion of Counsel in Connection with Registration of Securities
[Date]
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Capital Markets Fiduciary Services
Re: Alexion Pharmaceuticals, Inc. (the "Company")
5 3/4% Subordinated Convertible Notes Due 2007
(the "Securities")
Ladies and Gentlemen:
Reference is made to the Securities issued pursuant to a certain
indenture dated as of March 1, 2000 by and between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee"). The Securities were issued in
transactions exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"). The Company has filed with the Securities and
Exchange Commission (the "SEC") a registration statement on Form S-3 (number
333-______) (the "Registration Statement") relating to the registration under
the Securities Act of $[______________] principal amount of the Securities and
the shares of Common Stock of the Company (the "Shares") issuable upon
conversion of the Securities being registered. The Registration Statement was
declared effective by order of the SEC dated [_____].
We have acted as counsel for the Company in connection with the
issuance of the Securities and the preparation and filing of the Registration
Statement and are familiar with the Securities, the Indenture, the Registration
Statement, the above-mentioned SEC order and such other documents as are
necessary to render this opinion.
Based on the foregoing, it is our opinion that (1) the Registration
Statement has become and is currently effective under the Securities act so that
the Securities covered thereby and the Shares issuable upon conversion of such
Securities are duly registered under the Securities Act; and (2) the Indenture
has been duly qualified under the Trust Indenture Act of 1939, as amended.
Yours truly,
F-1
<PAGE>
Exhibit 4.2
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER
HEREOF THAT (A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
<PAGE>
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
<PAGE>
CUSIP No. 015351 AA 7
No. 001 $110,550,000
ALEXION PHARMACEUTICALS, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
ALEXION PHARMACEUTICALS, INC., a Delaware corporation (herein called
the "Company"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ONE HUNDRED AND TEN MILLION FIVE
HUNDRED AND FIFTY THOUSAND Dollars on March 15, 2007, and to pay interest
thereon as provided on the reverse hereof on the principal sum, until the
principal hereof and any unpaid and accrued interest is paid or duly provided
for. The right to payment of principal, premium, if any, and interest is
subordinated to the rights of Senior Indebtedness as set forth in the Indenture
referred to on the reverse side hereof.
Interest Payment Dates: March 15 and September 15, with the first
payment to be made on September 15, 2000.
Record Dates: March 1 and September 1.
<PAGE>
IN WITNESS WHEREOF, ALEXION PHARMACEUTICALS, INC. has caused this
instrument to be duly signed.
ALEXION PHARMACEUTICALS, INC.
By: /s/ [ILLEGIBLE]
------------------------------------
Name:
Title:
By: /s/ B.P. Luke
------------------------------------
Name:
Title
Dated: March 8, 2000
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ Kathleen Perry
----------------------------------
Authorized Officer
<PAGE>
ALEXION PHARMACEUTICALS, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
1. Interest. Alexion Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on March 15 and September 15 of each year, with the
first payment to be made on September 15, 2000. Interest on the Securities will
accrue on the principal amount from the most recent date to which interest has
been paid or duly provided for or, if no interest has been paid, from March 8,
2000. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Maturity. The Securities will mature on March 15, 2007 unless
earlier convened, redeemed or repurchased pursuant to the terms hereof and the
Indenture.
3. Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the record date set forth on the face
of this Security next preceding the applicable interest payment date except that
(i) interest payable upon redemption or repurchase, unless the date of
redemption or repurchase is an interest payment date, will be payable to the
Person to whom the principal is payable and (ii) in the case of any Security or
portion of any Security that is converted into Common Stock during the period
from, but excluding, a record date for any interest payment date to, but
excluding, that interest payment date either (A) if the Security, or portion of
the Security, has been called for redemption on a redemption date that occurs
during that period, or is to be repurchased on a Repurchase Date that occurs
during that period, the Company will not be required to pay interest on that
interest payment date in respect of any Security, or portion of any Security,
that is so redeemed or repurchased; or (B) if otherwise, any Security or portion
of any Security that is not called for redemption but is submitted for
conversion during that period must be accompanied by funds equal to the interest
payable on that interest payment date on the principal amount so converted.
Holders must surrender Securities to a Paying Agent to collect the principal
payments. The Company will pay the principal, premium, if any, and interest in
money of the United States that at the time of payment is legal tender.
Principal and interest may, at the Company's option, be paid either (i) by check
mailed to the address of the Person entitled to the interest as it appears in
the register kept by the Registrar (provided (a) payments to the Depository will
be made by wire transfer of immediately available funds to the account of the
Depository or its nominee and (b) a Holder with an aggregate principal amount of
Securities in excess of $10 million will, at the written election of the Holder,
filed on or before the relevant record date with the Trustee, be paid by wire
transfer in immediately available funds); or (ii) by transfer to an account
maintained by that Person located in the U.S.
<PAGE>
4. Paying Agent, Registrar, Conversion Agent. Initially, The Chase
Manhattan Bank (the "Trustee") will act as Paying Agent, Registrar and
Conversion Agent. The Company may change any Paying Agent, Registrar or
Conversion Agent without notice. The Company may act in any such capacity.
5. Indenture. The Company issued the Securities under an Indenture
dated as of March 8, 2000 (the "Indenture") between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code ss.ss. 77aaa-77bbbb) (the "Act") as in effect on the date of the Indenture.
The Securities are subject to all such terms, and Holders are referred to the
Indenture and the Act for a statement of such terms. The Securities are general
unsecured subordinated obligations of the Company limited to a maximum of
$120,000,000 aggregate principal amount (plus such additional amount (up to an
aggregate of $30,000,000) purchased by the Initial Purchasers pursuant to the
option described in Section 2.02), except as otherwise provided in the Indenture
(except for Securities issued in substitution for destroyed, mutilated, lost or
stolen Securities). Tens used herein which are defined in the Indenture have the
meanings assigned to them in the Indenture.
6. Optional Redemption by the Company. At any time on or after March
20, 2003, the Company may redeem the Securities on at least 30 days' notice as a
whole or, from time to time, in part at the following prices, expressed as a
percentage of the principal amount, together with accrued interest to, but
excluding, the date fixed for redemption:
Redemption
Period Price
- ------ ----------
Beginning March 20, 2003 and ending on March 14, 2004 103.286%
Beginning March 15, 2004 and ending on March 14, 2005 102.464%
Beginning March 15, 2005 and ending on March 14, 2006 101.643%
Beginning March 15, 2006 and ending on March 14, 2007 100.822%
and 100% on March 15, 2007. Any accrued interest becoming due on the date fixed
for redemption will be payable to the holders of record on the relevant record
date of the Securities being redeemed.
7. Notice of Redemption. Notice of redemption pursuant to paragraph
6 will be mailed at least 30 days before the redemption date to each Holder of
Securities to be redeemed at its registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in whole
multiples of $1,000 principal amount. On and after the redemption date interest
ceases to accrue on Securities or portions of them called for redemption.
8. Repurchase at Option of Holder. Pursuant to Section 3.07 of the
Indenture within 15 days after a Repurchase Event occurs, the Company is
required to give
<PAGE>
notice of the Repurchase Event to the Holders. Each Holder has he right, at its
option, to require the Company to repurchase all or any portion of the
Securities 40 days after the notice of repurchase event is mailed. The
Repurchase Price will be 105% of the principal amount of the Securities
submitted for repurchase, plus accrued and unpaid interest to, but excluding,
the Repurchase Date. If a Repurchase Date is an interest payment date, then the
interest payable on that date will be paid to the holder of record on the
relevant record date. Subject to the conditions of Section 3.07 of the
Indenture, the Company, at its option, instead of paying the Repurchase Price in
cash, may pay the Repurchase Price in Common Stock, valued at 95% of the average
of the Closing Prices for the five Trading Days immediately before and including
the third Trading Day preceding the Repurchase Date.
9. Conversion. A Holder of a Security may convert the principal of
such Security into Common Stock at any time after the date of original issuance
of the Security to the close of business on the business day prior to March 15,
2007, or (x) if the Security is called for redemption by the Company, the Holder
may convert it at any time before the close of business on the date that is one
business day before the date fixed for such redemption, or (y) if the Security
is to be repurchased by the Company pursuant to paragraph 8 hereof, the Holder
may convert it at any time before the close of business on the date that is one
business day before the date fixed for such repurchase. The initial Conversion
Price is $106.425 per share of Common Stock, subject to adjustment in certain
circumstances as set forth in Section 10.06 of the Indenture. To determine the
number of shares issuable upon conversion of a Security, divide the principal
amount to be converted by the Conversion Price in effect on the conversion date
and round the result to the nearest 1/100th share. The Company is not required
to issue fractional shares of Common Stock upon conversion and, instead, will
pay a cash amount as provided in Section 10.03 of the Indenture. Except as
provided in Article Ten of the Indenture, no payment or adjustment for the
principal of, premium, if any, interest on or liquidated damages with respect
to, the Securities or for dividends on any Common Stock will be made. If a
Holder surrenders a Security for conversion between the record date for the
payment of interest and the next interest payment date, such Security, when
surrendered for conversion, must be accompanied by payment of an amount equal to
the interest thereon which the registered Holder on such record date is to
receive. A Security which the Holder has elected to be repurchased may be
converted only if the Holder withdraws its election to have such Security
repurchased in accordance with the terms of the Indenture before the close of
business on the business day prior to the Repurchase Date.
To convert a Security a Holder must (1) complete and sign the
Conversion Notice, with appropriate signature guarantee, on the back of the
Security, (2) surrender the Security to a Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Registrar or
Conversion Agent, (4) pay the amount of interest, if any, the Holder may be paid
as provided in the last sentence of the above paragraph and (5) pay any transfer
or similar tax if required. A Holder may convert a portion of a Security if the
portion is $1,000 principal amount or a whole multiple of $1,000 principal
amount.
<PAGE>
Any shares issued upon conversion of a Security shall bear the
Private Placement Legend until after the second anniversary of the later of the
issue date for the Securities and the last date on which the Company or any
Affiliate of the Company was the owner of such shares or the Security (or any
predecessor security) from which such shares were converted (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act or any
successor provision thereunder) (or such longer period of time as may be
required under the Securities Act or applicable state securities laws as set
forth in the Opinion of Counsel delivered to the Conversion Agent, unless
otherwise agreed by the Company and the Holder thereof).
10. Subordination. The Securities are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full of all Senior Indebtedness. Each Holder by accepting a
Security agrees to such subordination and authorizes the Trustee to give it
effect.
11. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 principal amount and
whole multiples of $1,000 principal amount. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents. 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 cover any tax or other governmental charge payable in
connection therewith. The Registrar need not exchange or register the transfer
of any Security selected for redemption in whole or in part. Also, it need not
exchange or register the transfer of any Securities for a period of 15 days
before the mailing of a notice of redemption of the Securities selected to be
redeemed.
12. Persons Deemed Owners. The registered Holder of a Security may
be treated as the owner of such Security for all purposes.
13. Merger or Consolidation. The Company shall not consolidate with,
or merge into, or transfer or lease all or substantially all of its assets to,
any Person unless, among other things, the Person is organized under the laws of
the United States, any State thereof or the District of Columbia and such Person
assumes by supplemental indenture all the obligations of the Company under the
Securities, the Indenture and the Registration Rights Agreement and after giving
effect to the transaction no Default or Event of Default exists.
Notwithstanding the foregoing, any subsidiary of the Company may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or any other subsidiary or subsidiaries of the Company.
14. Amendments, Supplements and Waivers. Subject to certain
exceptions, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate principal amount
of the Securities then outstanding,
<PAGE>
and any existing Default or Event of Default may be waived with the consent of
the Holders outstanding. Without notice to or the consent of any Holder, the
Indenture or the Securities may be amended or supplemented to cure any
ambiguity, omission, defect or inconsistency, to provide for uncertificated
Securities in addition to certificated Securities, to comply with Sections 5.01
and 10.07 of the Indenture or to make any change that does not adversely affect
the rights of any Holder.
15. Defaults and Remedies. An Event of Default includes the
occurrence of any or the following: default in payment of the principal of or
any premium on the Securities; default for 30 days in payment of interest;
failure by the Company for 90 days after notice to it to comply with any of its
other agreements in the Indenture or the Securities; and certain events of
bankruptcy or insolvency. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may declare all the Securities to be due and
payable. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
16. Registration Rights. The Holders are entitled to shelf
registration rights as set forth in the Registration Rights Agreement. The
Holders shall be entitled to receive liquidated damages in certain
circumstances, all as set forth in the Registration Rights Agreement.
17. Trustee Dealings with Company. The Trustee under the Indenture,
or any banking institution serving as successor Trustee thereunder, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.
18. No Recourse Against Others. No past, present or future director,
officer, employee or stockholder, as such, of the Company shall have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
19. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
<PAGE>
20. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entirety), JT TEN (= joint tenants with right of survivorship and
not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
ALEXION PHARMACEUTICALS, INC.
25 SCIENCE PARK
NEW HAVEN, CONNECTICUT 06511
ATTENTION: PRESIDENT
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
_________________________________________________
________________________________________________________________________________
(please print or type name and address)
________________________________________________________________________________
________________________________________________________________________________
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints
________________________________________________________________________________
attorney to transfer the Security on the books of the Company with full power
of substitution in the premises.
Dated:_____________________________ ________________________________________
NOTICE: The signature on this assignment
must correspond with the name as it
appears upon the face of the within
Security in every particular without
alteration or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:____________________________________________________________
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.)
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall have been suspended or terminated at the date of the
transfer) and (ii) March 7, 2002 the undersigned confirms that
<PAGE>
it has not utilized any general solicitation or general advertising in
connection with transfer:
[Check One]
(1) _____ to the Company or a subsidiary thereof; or
(2) _____ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) _____ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of which
letter can be obtained from the Trustee); or
(4) _____ outside the United States to a "foreign purchaser" in compliance
with Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(5) _____ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) _____ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) _____ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
|_| The transferee is an Affiliate of the Company.
(If the Security is transferred to an Affiliate, the restrictive legend must
remain on the Security for two years following the date of the transfer).
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
Person other than the registered Holder thereof; provided, however, that if item
(3),(4),(5) or (7) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Securities, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4)) and other information as the Trustee or the Company have
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
<PAGE>
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated: ___________________________ Signed:_________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:____________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated: ____________________________ ________________________________________
NOTICE: To be executed by an
executive officer
<PAGE>
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
|_|
To convert only part of this Security, state the principal amount to be
converted (must be in multiples of $1,000):
$_______________________________________________________________________________
If you want the stock certificate made out in another person's name, fill in the
form below:
________________________________________________________________________________
(Insert other person's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type other person's name, address and zip code)
________________________________________________________________________________
Date:______________ Signature(s): ___________________________________
___________________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
Signature(s) guaranteed by: ____________________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include membership
or participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the
Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.)
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE NOTICE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.07 of the Indenture, check the box: |_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.07 of the Indenture, state the principal
amount:
$___________________________________________
(in an integral multiple of $1,000)
Date:____________________ Signature(s): __________________________
________________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by: ________________________________________
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.)
<PAGE>
THIS SECURITY (OR ITS PREDECESSOR) WAS 0RIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE ISSUER
HEREOF THAT (A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
<PAGE>
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
<PAGE>
CUSIP No. U01409 AA 6
No. 002 $9,450,000
ALEXION PHARMACEUTICALS, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
ALEXION PHARMACEUTICALS, INC., a Delaware corporation (herein called
the "Company"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of NINE MILLION FOUR HUNDRED AND FIFTY
THOUSAND Dollars on March 15, 2007, and to pay interest thereon as provided on
the reverse hereof on the principal sum, until the principal hereof and any
unpaid and accrued interest is paid or duly provided for. The right to payment
of principal, premium, if any, and interest is subordinated to the rights of
Senior Indebtedness as set forth in the Indenture referred to on the reverse
side hereof.
Interest Payment Dates: March 15 and September 15, with the first
payment to be made on September 15, 2000.
Record Dates: March 1 and September 1.
<PAGE>
IN WITNESS WHEREOF, ALEXION PHARMACEUTICALS, INC. has caused this
instrument to be duly signed.
ALEXION PHARMACEUTICALS
By: /s/ David Keiser
-------------------------------------
Name:
Title:
By: /s/ B.P. Luke
-------------------------------------
Name:
Title:
Dated:March 8, 2000
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ Kathleen Perry
--------------------------------
Authorized Office
<PAGE>
ALEXION PHARMACEUTICALS, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2007
1. Interest. Alexion Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on March 15 and September 15 of each year, with the
first payment to be made on September 15, 2000. Interest on the Securities will
accrue on the principal amount from the most recent date to which interest has
been paid or duly provided for or, if no interest has been paid, from March 8,
2000. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Maturity. The Securities will mature on March 15, 2007 unless
earlier convened, redeemed or repurchased pursuant to the terms hereof and the
Indenture.
3. Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the record date set forth on the face
of this Security next preceding the applicable interest payment date except that
(i) interest payable upon redemption or repurchase, unless the date of
redemption or repurchase is an interest payment date, will be payable to the
Person to whom the principal is payable and (ii) in the case of any Security or
portion of any Security that is convened into Common Stock during the period
from, but excluding, a record date for any interest payment date to, but
excluding, that interest payment date either (A) if the Security, or portion of
the Security, has been called for redemption on a redemption date that occurs
during that period, or is to be repurchased on a Repurchase Date that occurs
during that period, the Company will not be required to pay interest on that
interest payment date in respect of any Security, or portion of any Security,
that is so redeemed or repurchased; or (B) if otherwise, any Security or portion
of any Security that is not called for redemption but is submitted for
conversion during that period must be accompanied by finds equal to the interest
payable on that interest payment date on the principal amount so convened.
Holders must surrender Securities to a Paying Agent to collect the principal
payments. The Company will pay the principal, premium, if any, and interest in
money of the United States that at the time of payment is legal tender.
Principal and interest may, at the Company's option, be paid either (i) by check
mailed to the address of the Person entitled to the interest as it appears in
the register kept by the Registrar (provided (a) payments to the Depository will
be made by wire transfer of immediately available funds to the account of the
Depository or its nominee and (b) a Holder with an aggregate principal amount of
Securities in excess of $10 million will, at the written election of the Holder,
filed on or before the relevant record date with the Trustee, be paid by wire
transfer in immediately available funds); or (ii) by transfer to an account
maintained by that Person located in the U.S.
<PAGE>
4. Paying Agent, Registrar, Conversion Agent. Initially, The Chase
Manhattan Bank (the "Trustee") will act as Paying Agent, Registrar and
Conversion Agent. The Company may change any Paying Agent, Registrar or
Conversion Agent without notice. The Company may act in any such capacity.
5. Indenture. The Company issued the Securities under an Indenture
dated as of March 8, 2000 (the "Indenture") between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code ss.ss. 77aaa-77bbbb) (the "Act") as in effect on the date of the Indenture.
The Securities are subject to all such terms, and Holders are referred to the
Indenture and the Act for a statement of such terms. The Securities are general
unsecured subordinated obligations of the Company limited to a maximum of
$120,000,000 aggregate principal amount (plus such additional amount (up to an
aggregate of $30,000,000) purchased by the Initial Purchasers pursuant to the
option described in Section 2.02), except as otherwise provided in the Indenture
(except for Securities issued in substitution for destroyed, mutilated, lost or
stolen Securities). Terms used herein which are defined in the Indenture have
the meanings assigned to them in the Indenture.
6. Optional Redemption by the Company. At any time on or after March
20, 2003, the Company may redeem the Securities on at least 30 days' notice as a
whole or, from time to time, in part at the following prices, expressed as a
percentage of the principal amount, together with accrued interest to, but
excluding, the date fixed for redemption:
Redemption
Period Price
- ------ ----------
Beginning March 20, 2003 and ending on March 14, 2004 103.286%
Beginning March 15, 2004 and ending on March 14, 2005 102.464%
Beginning March 15, 2005 and ending on March 14, 2006 101.643%
Beginning March 15, 2006 and ending on March 14, 2007 100.822%
and 100% on March 15, 2007. Any accrued interest becoming due on the date fixed
for redemption will be payable to the holders of record on the relevant record
date of the Securities being redeemed.
7. Notice of Redemption. Notice of redemption pursuant to paragraph
6 will be mailed at least 30 days before the redemption date to each Holder of
Securities to be redeemed at its registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in whole
multiples of $1,000 principal amount. On and after the redemption date interest
ceases to accrue on Securities or portions of them called for redemption.
8. Repurchase at Option of Holder. Pursuant to Section 3.07 of the
Indenture within 15 days after a Repurchase Event occurs, the Company is
required to give
<PAGE>
notice of the Repurchase Event to the Holders. Each Holder has the right, at its
option, to require the Company to repurchase all or any portion of the
Securities 40 days after the notice of repurchase event is mailed. The
Repurchase Price will be 105% of the principal amount of the Securities
submitted for repurchase, plus accrued and unpaid interest to, but excluding,
the Repurchase Date. If a Repurchase Date is an interest payment date, then the
interest payable on that date will be paid to the holder of record on the
relevant record date. Subject to the conditions of Section 3.07 of the
Indenture, the Company, at its option, instead of paying the Repurchase Price in
cash, may pay the Repurchase Price in Common Stock, valued at 95% of the average
of the Closing Prices for the five Trading Days immediately before and including
the third Trading Day preceding the Repurchase Date.
9. Conversion. A Holder of a Security may convert the principal of
such Security into Common Stock at any time after the date of original issuance
of the Security to the close of business on the business day prior to March 15,
2007, or (x) if the Security is called for redemption by the Company, the Holder
may convert it at any time before the close of business on the date that is one
business day before the date fixed for such redemption, or (y) if the Security
is to be repurchased by the Company pursuant to paragraph 8 hereof, the Holder
may convert it at any time before the close of business on the date that is one
business day before the date fixed for such repurchase. The initial Conversion
Price is $106.425 per share of Common Stock, subject to adjustment in certain
circumstances as set forth in Section 10.06 of the Indenture. To determine the
number of shares issuable upon conversion of a Security, divide the principal
amount to be converted by the Conversion Price in effect on the conversion date
and round the result to the nearest 1/100th share. The Company is not required
to issue fractional shares of Common Stock upon conversion and, instead, will
pay a cash amount as provided in Section 10.03 of the Indenture. Except as
provided in Article Ten of the Indenture, no payment or adjustment for the
principal of, premium, if any, interest on or liquidated damages with respect
to, the Securities or for dividends on any Common Stock will be made. If a
Holder surrenders a Security for conversion between the record date for the
payment of interest and the next interest payment date, such Security, when
surrendered for conversion, must be accompanied by payment of an amount equal to
the interest thereon which the registered Holder on such record date is to
receive. A Security which the Holder has elected to be repurchased may be
converted only if the Holder withdraws its election to have such Security
repurchased in accordance with the terms of the Indenture before the close of
business on the business day prior to the Repurchase Date.
To convert a Security a Holder must (1) complete and sign the
Conversion Notice, with appropriate signature guarantee, on the back of the
Security, (2) surrender the Security to a Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Registrar or
Conversion Agent, (4) pay the amount of interest, if any, the Holder may be paid
as provided in the last sentence of the above paragraph and (5) pay any transfer
or similar tax if required. A Holder may convert a portion of a Security if the
portion is $1,000 principal amount or a whole multiple of $ 1,000 principal
amount.
<PAGE>
Any shares issued upon conversion of a Security shall bear the
Private Placement Legend until after the second anniversary of the later of the
issue date for the Securities and the last date on which the Company or any
Affiliate of the Company was the owner of such shares or the Security (or any
predecessor security) from which such shares were converted (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act or any
successor provision thereunder) (or such longer period of time as may be
required under the Securities Act or applicable state securities laws as set
forth in the Opinion of Counsel delivered to the Conversion Agent, unless
otherwise agreed by the Company and the Holder thereof).
10. Subordination. The Securities are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full of all Senior Indebtedness. Each Holder by accepting a
Security agrees to such subordination and authorizes the Trustee to give it
effect.
11. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 principal amount and
whole multiples of $1,000 principal amount. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents. 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 cover any tax or other governmental charge payable in
connection therewith. The Registrar need not exchange or register the transfer
of any Security selected for redemption in whole or in part. Also, it need not
exchange or register the transfer of any Securities for a period of 15 days
before the mailing of a notice of redemption of the Securities selected to be
redeemed.
12. Persons Deemed Owners. The registered Holder of a Security may
be treated as the owner of such Security for all purposes.
13. Merger or Consolidation. The Company shall not consolidate with,
or merge into, or transfer or lease all or substantially all of its assets to,
any Person unless, among other things, the Person is organized under the laws of
the United States, any State thereof or the District of Columbia and such Person
assumes by supplemental indenture all the obligations of the Company under the
Securities, the Indenture and the Registration Rights Agreement and after giving
effect to the transaction no Default or Event of Default exists.
Notwithstanding the foregoing, any subsidiary of the Company may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company or any other subsidiary or subsidiaries of the Company.
14. Amendments, Supplements and Waivers. Subject to certain
exceptions, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate principal amount
of the Securities then outstanding,
<PAGE>
and any existing Default or Event of Default may be waived with the consent of
the Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or the consent of any Holder, the Indenture or
the Securities may be amended or supplemented to cure any ambiguity, omission,
defect or inconsistency, to provide for uncertificated Securities in addition to
certificated Securities, to comply with Sections 5.01 and 10.07 of the Indenture
or to make any change that does not adversely affect the rights of any Holder.
15. Defaults and Remedies. An Event of Default includes the
occurrence of any or the following: default in payment of the principal of or
any premium on the Securities; default for 30 days in payment of interest;
failure by the Company for 90 days after notice to it to comply with any of its
other agreements in the Indenture or the Securities; and certain events of
bankruptcy or insolvency. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may declare all the Securities to be due and
payable. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
16. Registration Rights. The Holders are entitled to shelf
registration rights as set forth in the Registration Rights Agreement. The
Holders shall be entitled to receive liquidated damages in certain
circumstances, all as set forth in the Registration Rights Agreement.
17. Trustee Dealings with Company. The Trustee under the Indenture,
or any banking institution serving as successor Trustee thereunder, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.
18. No Recourse Against Others. No past, present or future director,
officer, employee or stockholder, as such, of the Company shall have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
19. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
<PAGE>
20. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entirety), JT TEN (= joint tenants with right of survivorship and
not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:
ALEXION PHARMACEUTICALS, INC.
25 SCIENCE PARK
NEW HAVEN, CONNECTICUT 06511
ATTENTION: PRESIDENT
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
_________________________________________________
________________________________________________________________________________
(please print or type name and address)
________________________________________________________________________________
________________________________________________________________________________
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints
________________________________________________________________________________
attorney to transfer the Security on the books of the Company with full power
of substitution in the premises.
Dated:_____________________________ ________________________________________
NOTICE: The signature on this assignment
must correspond with the name as it
appears upon the face of the within
Security in every particular without
alteration or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee:____________________________________________________________
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.)
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall have been suspended or terminated at the date of the
transfer) and (ii) March 7, 2002 the undersigned confirms that
<PAGE>
it has not utilized any general solicitation or general advertising in
connection with transfer:
[Check One]
(1) _____ to the Company or a subsidiary thereof; or
(2) _____ pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
(3) _____ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of which
letter can be obtained from the Trustee); or
(4) _____ outside the United States to a "foreign purchaser" in compliance
with Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(5) _____ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) _____ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) _____ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
|_| The transferee is an Affiliate of the Company.
(If the Security is transferred to an Affiliate, the restrictive legend must
remain on the Security for two years following the date of the transfer).
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
Person other than the registered Holder thereof; provided, however, that if item
(3),(4),(5) or (7) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Securities, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4)) and other information as the Trustee or the Company have
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, as amended.
<PAGE>
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated: ___________________________ Signed:_________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:____________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated: ____________________________ ________________________________________
NOTICE: To be executed by an
executive officer
<PAGE>
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
|_|
To convert only part of this Security, state the principal amount to be
converted (must be in multiples of $1,000):
$_______________________________________________________________________________
If you want the stock certificate made out in another person's name, fill in the
form below:
________________________________________________________________________________
(Insert other person's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type other person's name, address and zip code)
Date:______________ Signature(s): ___________________________________
___________________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
Signature(s) guaranteed by: ____________________________________________________
(Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include membership
or participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the
Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.)
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE NOTICE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.07 of the Indenture, check the box: |_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.07 of the Indenture, state the principal
amount:
$___________________________________________
(in an integral multiple of $1,000)
Date:____________________ Signature(s): __________________________
________________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by: ________________________________________
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer
Agent Medallion Program ("STAMP") or
such other "signature guarantee program"
as may be determined by the Registrar in
addition to, or in substitution for,
STAMP, all in accordance with the
Securities Exchange Act of 1934, as
amended.)
<PAGE>
Exhibit 5.1
[Letterhead of Fulbright & Jaworski l.l.p.]
May 10, 2000
Alexion Pharmaceuticals, Inc.
25 Science Park, Suite 360
New Haven, Connecticut 06511
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement"), filed by Alexion Pharmaceuticals, Inc. (the "Company") on behalf of
the selling stockholders (the "Selling Stockholders") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
$120,000,000 aggregate principal amount of 5-3/4% Convertible Senior
Subordinated Notes due March 2007 (the "Notes") and 1,127,555 shares of the
Company's common Stock, $.0001 par value (the "Shares"), issuable upon
conversion of the Notes, to be sold by the Selling Shareholders named therein.
The Notes have been issued under and pursuant to an Indenture, dated March 8,
2000, between the Company and The Chase Manhattan Bank, as Trustee (the
"Indenture").
As counsel for the company, we have examined such corporate records,
documents and such questions of law as we have considered necessary or
appropriate for purposes of this opinion and, upon the basis of such
examination, advise you that in our opinion (i) the Notes have been duly and
validly authorized for issuance by the Company and are legal, valid and binding
obligations of the Company (subject to bankruptcy, insolvency and other laws
which affect the rights of creditors generally, including the laws of the State
of Delaware relating to compromises, arrangements and reorganizations) and (ii)
the Shares have been duly and validly authorized and, when issued upon
conversion of the Notes in accordance with the terms of the Indenture, will be
validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and the reference to this firm under the caption "Legal Matters" in
the prospectus contained therein and elsewhere in the Registration Statement and
prospectus. This consent is not to be construed as an admission that we are a
party whose consent is required to be filed with the Registration Statement
under the provisions of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
<PAGE>
Exhibit 10.2
=================================================
LEASE
WE KNOTTER, L.L.C.
(LANDLORD)
AND
ALEXION PHARMACEUTICALS, INC.
(TENANT)
DATED: MAY __, 2000
=================================================
<PAGE>
LEASE
AGREEMENT OF LEASE dated as of the ___ day of May, 2000 between WE
KNOTTER, L.L.C., a Delaware limited liability company, with an office at c/o
Winstanley Enterprises, LLC, 150 Baker Street Extension, Suite 303, Concord
Massachusetts 01742 ("Landlord"), and ALEXION PHARMACEUTICALS, INC., a Delaware
corporation with offices at 25 Science Park, Suite 360, New Haven, Connecticut
06511 ("Tenant").
WITNESSETH:
Landlord and Tenant hereby covenant and agree as follows:
ARTICLE I DEFINITIONS
For the purposes of this Lease, unless the context otherwise requires:
1.1 "Governmental Authority" shall mean any federal, state, county,
municipal or local government and all departments, commissions, boards, bureaus
and offices thereof having or claiming jurisdiction over the "Premises" (as
defined below).
1.2 "Land" shall mean the parcel of land situated in the County of New
Haven, State of Connecticut and Town of Cheshire, known as 350 Knotter Drive,
being more particularly described on Exhibit I attached hereto.
1.3 "Lease Year" shall mean every period of twelve (12) consecutive months
during the term of this Lease commencing on January first (1st) and terminating
on December thirty-first (31st), except that the first Lease Year shall mean the
period from the Commencement Date through December 31st of such calendar year
and the last Lease year shall end on the Expiration Date (as such terms are
defined in the Lease).
1.4 "Tenant's Property" shall mean all of Tenant's personal property and
all fixtures, improvements, additions, and other property installed at the sole
expense of Tenant with respect to which Tenant has not been granted any credit
or allowance by Landlord, whether any such replacement is made at Tenant's
expense or otherwise. Tenant's Property shall include personal property that can
easily be removed, including, without limitation, items described on Exhibit J
attached hereto (and including enhancements to and replacements of such items
which shall be identified by Tenant delivering to Landlord, on an annual basis,
an update of the list of items), but shall not include any other fixtures or
items of personal property which are permanently affixed to the Premises or the
Building systems.
1.5 "Superior Mortgages" shall have the meaning given in Section 20.1.
ARTICLE 2 DEMISE; PREMISES; TERM
2.1 Landlord hereby leases to Tenant, and Tenant hereby hires from
Landlord, the premises hereinafter described ("Premises"), consisting of
approximately 81,890 rentable square feet in the building situated at 350
Knotter Drive, Cheshire, Connecticut (the "Building"), as shown on the plan
attached hereto as Exhibit A (the "Plan"), together with the non-exclusive right
to use the common areas
<PAGE>
for their intended purposes, for the term hereinafter stated, for the rents
hereinafter reserved, and upon and subject to the terms, restrictions and
reservations hereinafter provided. The common areas of the Land and Building
include the portions thereof designated by Landlord for the common use of
tenants (including Tenant) and others, such as sidewalks, parking areas,
grounds, lobby areas, boiler and mechanical rooms and areas. Landlord shall
permit Tenant to have access to the common areas of the Building for installing
and maintaining specific services or utilities designated for and/or dedicated
to the specific use of Tenant (that is not with respect to shared services or
utilities) with Landlord's prior consent (which consent shall not be
unreasonably withheld). In the event and to the extent Landlord, Arch (as
defined below) or any other tenant requires or has been granted access and right
to use the common areas shown on Exhibit A as the boiler rooms, then such access
shall be by the use of the exterior doors, except in the event of an emergency,
when, if necessary to address the emergency, access may be had in the most
expedient manner. Tenant has advised Landlord that it has a training program in
place for persons requiring access to the Premises. Landlord covenants and
agrees that it will require its employees and property managers to attend such
program and it will cause other tenants at the Building moving into the Building
after the Commencement Date to have such of their employees as may require
access to Tenant's Premises to attend such training program. The Landlord has
notified Arch that Tenant has required that the ability of other to access its
Premises be conditioned upon such people attending Tenant's training program.
Arch has represented to the Landlord that it will cause such of its employees as
may require access to the Premises to attend such training program.
2.2 The Premises are located in the Building, substantially as shown on
the floor plan(s) annexed as Exhibit A, and shall include all fixtures,
equipment, improvements and appurtenances which, at the commencement of the Term
or at any time during the Term, are attached thereto or installed therein, other
than Tenant's Property.
2.3 The Premises are leased for a term ("Term") which shall commence on
the date that Arch Chemicals, Inc. ("Arch") shall vacate the Premises (including
removal by Arch of all of the property set forth on Exhibit K, as more
particularly set forth below) and Landlord delivers the Premises to Tenant free
of any right or claim of Arch or any other occupant (except as otherwise set
forth herein) (such date, the "Commencement Date"). It is anticipated that Arch
will vacate the Premises on or before August 14, 2000. Tenant acknowledges that
during the period prior to the Commencement Date (such period, the "Arch
Move-Out Period"), Arch will be relocating from the area of the Premises to the
area demised to it, as shown on the Plan. In the event the Commencement Date has
not occurred on or before October 1, 2000 then, for each day of delay after
October 1, 2000, Tenant will be granted one additional day of abatement of Fixed
Rent and Additional Rent beyond the dates specified in Exhibit B. The Term shall
expire on the last day of the 126th month of the Term ("Expiration Date") unless
the Term shall be extended or sooner terminated pursuant to any of the terms,
covenants or conditions of this Lease or pursuant to law. The parties will
promptly after the Commencement Date execute a notice of Commencement in the
form attached hereto as Exhibit F. Tenant will be granted access to the Premises
during the Arch Move-out Period provided that Tenant's presence doesn't
interfere with (x) Arch's build-out of and relocation to its premises, (y) the
day to day operations of Arch or (z) the performance by Landlord of Landlord's
Work (as defined below) Tenant's access to and use of the Premises will be
subject to the terms and conditions of this Lease (except that no rent or
additional Rent shall be payable), including without limitation, the provisions
of Article 17 and the obligation that Tenant deliver evidence of insurance as
required by Article 7. Tenant may present to Landlord, from time to time, work
plans (each of which shall include the scope, scheduling and method of work) for
Landlord's agreement that the work, if performed in accordance with the plan,
will not present an issue pursuant to any of clauses (x), (y) or (z) above. Arch
has advised Landlord that it anticipates vacating the area of Tenant's
2
<PAGE>
proposed vivarium (as shown on Exhibit L attached hereto) on or about June 9,
2000. Landlord agrees that Tenant may, upon the vacating by Arch of such area,
in accordance with the terms of this Lease, have access to and use of such area.
2.4 Tenant acknowledges that Arch shall, promptly after the Commencement
Date, continue to have access to an area shown on Exhibit A as the Less Than 90
Day Storage Facility to permit Arch to "close" the same in accordance with
applicable laws. Pursuant to the lease between Landlord and Arch dated March 15,
2000 (the "Arch Lease"), Arch has agreed upon substantial completion of a new
less than 90 Day hazardous waste storage facility which is being constructed by
Landlord (which construction is anticipated to be completed on or before August
14, 2000) to promptly vacate and proceed to closure in accordance of all
applicable law of the Less Than 90 Day Storage Facility referenced above. The
Arch Lease further provides that, to the extent feasible, and subject to any
applicable requirement of any Governmental Authority, from and after the
expiration of the Arch Move-Out Period, Arch will access the aforesaid Less Than
90 Day Storage Facility through the outside door. Arch's access to the Less than
90 Day Storage Facility and of other areas not demised to it under the Arch
Lease is governed by and subject to the terms and conditions of that certain
Agreement between Landlord and Arch dated March 15, 2000. Landlord will promptly
take all such action as may be necessary to cause Arch to comply fully with the
March 15, 2000 agreement and the Arch Lease, provided this undertaking as to the
Arch Lease applies only insofar as the Arch Lease relates to Arch's closure and
vacating of the existing Less Than 90 Day Storage Facility. At such time as the
closure of the Less Than 90 Day Storage Facility has been completed, Landlord
shall deliver or cause to be delivered to Tenant a certification or report to
evidence the same, which indicates that closure has been accomplished in full
and in accordance with all applicable laws.
2.5 In connection with the performance of Landlord's Work and of Tenant's
Initial Alterations, as defined below, Landlord and Tenant shall coordinate the
preparation of plans and, to the extent feasible, the obtaining of necessary
permits and approvals from the applicable Governmental Authorities and from
F.I.P. Corporation, or its successor, as the declarant under those declarations
of record in the Town of Cheshire affecting the Premises, copies of which
declarations are attached hereto as Exhibit M.
ARTICLE 3 OCCUPANCY OF THE PREMISES, LANDLORD'S WORK
AND TENANT'S WORK
3.1 Tenant represents that Tenant has inspected and is familiar with the
Premises and the Building and is thoroughly acquainted with their condition and
takes the Premises "as is", except (i) that the Premises will be delivered
"broom clean" and (ii) for the completion of Landlord's Work, as defined herein,
and the taking of possession of the premises by Tenant shall be conclusive at
the time possession was taken by Tenant. Arch has covenanted that it will, in
vacating the Premises, remove only those items of personal property set forth on
Exhibit K attached hereto. All items other than those set forth on Exhibit K
present in the Premises as of that date of Tenant's inspection of the Premises,
that is, as of April 18, 2000, will be surrendered by Arch and, as set forth in
Section 2.2 above, be included in and constitute a part of the Premises. Except
as expressly set forth herein, neither Landlord nor Landlord's agents have made
any representations or promises with respect to the condition of the Building,
the Premises or the Land, and no rights easements or licenses are acquired by
Tenant by implication or otherwise except as expressly set forth in this Lease.
3
<PAGE>
3.2 Landlord shall, at Landlord's expense, and pursuant to the provisions
of Exhibit E, attached hereto, perform the Landlord's Work. Landlord's Work
shall be performed in a good and workmanlike manner, using materials of a
quality not less than those now present in the Building (but in any event of no
less than first quality unused material). Any of Landlord's Work not completed
during the Arch Move-Out Period will be performed in a manner so as to minimize
disruption of Tenant's business.
3.3 The Tenant shall complete certain work (the "Initial Alterations")
subject to and in accordance with the provisions of the Work Letter attached
hereto as Exhibit D.
3.4 To the extent Tenant draws upon the Allowance furnished by Landlord
(as set forth on Exhibit D), then the Allowance amount utilized by Tenant shall
be repaid by Tenant by amortizing the amount over the initial Term of the Lease
(commencing on the 1st day of the seventh month of the Term) with interest
thereon at the rate of 11% per annum and the amortized Allowance (including
interest) shall be added to Fixed Rent as identified and set forth in Section 4
and Exhibit B hereof. Alternatively, Tenant may elect to repay the amount of the
Allowance utilized in a lump sum, together with interest thereon from the
date(s) of disbursement through the date of repayment at 11% per annum provided
that the full repayment is made prior to the end of the sixth month of the first
Lease Year. In the event Tenant wishes to repay the Allowance in full at any
time after the end of the sixth month of the first Lease Year, Tenant may do so
provided that (i) as Landlord may, upon receipt of such funds, apply them to the
mortgage debt encumbering the Land and Building, the Mortgagee holding the
Superior Mortgage (as such terms are defined in Article 20) will accept a
prepayment and (ii) Tenant pays to Landlord, at the time of such repayment, the
amount of any fee or penalty imposed or assessed by the Mortgagee in connection
with such prepayment.
ARTICLE 4 RENT
4.1 Tenant shall pay to Landlord, without notice or demand, in lawful
money of the United States of America, at the office of Landlord or at such
other place as Landlord may designate, the following:
(a) annual fixed rent ("Fixed Rent") at the rates and in the amounts
set forth on Exhibit B, together with the amortized Allowance amount (as set
forth in Section 3 above), as additional Fixed Rent. Annual Fixed Rent shall be
payable in equal monthly installments (in amounts as set forth on Exhibit B) in
advance on the first day of each and every calendar month commencing on the date
set forth on Exhibit B and continuing throughout the remainder of the Term.
(b) additional rent ("Additional Rent") consisting of all other sums
of money as shall become due and payable by Tenant hereunder.
(c) If Tenant shall fail to pay within ten (10) days of the date
when due any installment of Fixed Rent or any Additional Rent, Tenant shall pay
interest thereon at the annual rate of interest (the "Default Rate") equal to
the lesser of (i) four percentage points per annum above the so-called prime
rate as published in the Money Rates section of The Wall Street Journal (the
"Journal") (or if the Journal ceases to be published or to publish such rates,
then any successor reasonably designated by Landlord), or (ii) the then
prevailing maximum legal rate chargeable to Tenant, from the date when such
installation or payment shall have become due to the date of the payment
thereof, and such interest shall be deemed Additional Rent.
4
<PAGE>
(d) There shall be no abatement of, deduction from, counterclaim or
setoff against Fixed Rent or Additional Rent except as otherwise specifically
provided in this Lease.
(e) If the Commencement Date is other than the first day of a month,
Fixed Rent for the first partial month of the Term shall be apportioned in that
percentage which the number of days from the Commencement Date to the end of
that month shall bear to the total number of days in the month in which such
Commencement Date occurs.
ARTICLE 5 USE
5.1 Tenant shall use and occupy the Premises for executive offices and as
a research and development facility to the extent now and hereafter permitted
under applicable laws, ordinances, codes, rules, regulations, order or other
lawful requirements of each Governmental Authority and for no other purpose
without first obtaining Landlord's written consent. Landlord represents that the
Building is in an I-2 (Industrial Zone) in the Town of Cheshire. Attached hereto
as Exhibit G is a list of uses permitted in the I-2 Zone.
5.2 Tenant shall not use or occupy, suffer or permit the Premises or any
part thereof to be used in any manner, or anything to be done therein, or suffer
or permit anything to be brought into or kept therein, which would in any way,
(a) cause, or be likely to cause, physical damage to the Building or any part
thereof, (b) constitute a public or private nuisance, (c) discharge
objectionable fumes, vapors or odors in a manner as may unreasonably offend
other occupants, (d) cause substantial or objectionable noise, (e) impair or
interfere with any of the Building's services, including the furnishing of
electrical energy, or the proper and economic cleaning, air conditioning or
other servicing of the Building or the Premises or impair or interfere with the
use of any of the other areas of the Building, or occasion discomfort, annoyance
or inconvenience to Landlord or any of the other tenants or occupants of the
Building other than for such brief interruptions of services as may be
reasonably necessary for Tenant to perform Tenant's Initial Alterations and
permitted future Alterations and after Landlord shall have approved of the work
being performed and Tenant shall have coordinated the conduct of such work with
Landlord. Arch and other tenants at the Building or (f) cause Tenant to default
in any of its other obligations under this Lease.
5.3 If any governmental license or permit shall be required for the proper
and lawful conduct of Tenant's business in the Premises or any part thereof,
then Tenant, at its expense, shall duly procure and thereafter maintain such
license or permit and submit the same to inspection by Landlord. Tenant shall at
all times comply with the terms and conditions of each such license or permit,
but in no event shall failure to procure and maintain same by Tenant affect
Tenant's obligations hereunder.
5.4 Tenant shall not place a load upon any floor of the Premises that
exceeds the floor load per square foot that such floor was designed to carry and
which is allowed by certificate, rule, regulation, permit or law.
ARTICLE 6 ADDITIONAL RENTAL
6.1 This Lease is intended by the parties hereto to be a so-called net
lease and the Fixed Rent shall be received by Landlord net of all costs and
expenses related to the Land, the Building and the premises, except as otherwise
set forth herein. Tenant shall pay to Landlord, in addition to Tenant's
obligations with respect to the payment of Tenant's Pro Rata Percentage of Real
Estate Taxes (as defined
5
<PAGE>
below) and Operating Expenses (as defined below), Tenant shall pay all other
costs which are specifically set forth herein, to Landlord, upon demand as
Additional Rent, in the same manner as Fixed Rent, together with reasonable
attorney's fees incurred by the Landlord in connection with any amendments to,
consents under and subleases and assignments of this Lease requested by Tenant
and in connection with the enforcement of rights and pursuit of the remedies of
the Landlord under this Lease (whether during or after the expiration or
termination of the term of this Lease).
As set forth above and commencing on the first day of the 4th month of the
Term, Tenant shall pay to Landlord, its Tenant's Pro Rata Percentage of the
aggregate of Operating Expenses (as hereinafter defined) and Real Estate Taxes
(as hereinafter defined) incurred by Landlord for or during each Lease Year
during the term of this Lease. Tenant's Pro Rata Percentage is set forth on
Exhibit B, provided that Tenant's Pro Rata Percentage may not be adjusted unless
(i) Landlord or another tenant constructs an addition to the Building or (ii)
Tenant consents in writing to an adjustment being made for any other reason
(which consent will not be unreasonably delayed, conditioned or withheld).
"Operating Expenses" shall mean all reasonable expenses paid or incurred
by Landlord or on Landlord's behalf in respect of the proper management, repair,
operation and maintenance of the Building, including but not limited to (1)
properly allocated salaries, wages and benefits of employees of Landlord engaged
in the management, repair, operation and maintenance of the Building; (2)
payroll taxes, workmen's compensation, uniforms and related expenses for such
employees; (3) the cost of all charges for oil, gas, steam, oxygen, compressed
air, electricity, any alternate source of energy, heating, ventilation,
air-conditioning, water, sewers and other utilities furnished to the Building
(including the Common areas and leased areas thereof), together with any taxes
on such utilities; (4) the cost of painting non-tenant space; (5) the cost of
all charges for insurance carried by Landlord (with regard to the Land and the
Building and operations therein) including without limitation rent, casualty,
environmental, comprehensive general liability and fidelity insurance with
regard to the Building and the maintenance or operation thereof; (6) the cost of
all supplies (including cleaning supplies), materials and equipment, the rental
thereof and sales and other taxes thereon; (7) depreciation of hand tools and
other movable equipment regularly used in the repair, operation or maintenance
of the Building; (8) the cost of all charges for window and other cleaning and
janitorial services for the common areas only, snow and ice removal, and any
security services to patrol or monitor the common areas; (9) charges of
independent contractors, including, without limitation, the cost of a security
firm, in each case provided such are unaffiliated with Landlord (or if
affiliated provided such charges are competitive) and all such charges are
properly allocated to the Building; (10) repairs and replacements made by
Landlord at its expense (provided that if such cost would, under real estate
accounting principles, be required to be capitalized, then such costs shall be
reasonably amortized over the useful life, as determined in accordance with real
estate accounting principles, together with interest at 11% per annum (unless
the repairs are required by reason of Landlord's gross negligence or willful
misconduct); (11) exterior and interior landscaping; (12) alterations and
improvements to the Building made by reason of and to the extent required to
meet the minimum requirements of applicable law or regulation of any
Governmental Authority or the requirements of insurance bodies; (13) reasonable
management fees which shall not exceed the lesser of (i) those customarily
charged by third party managers for bio-tech buildings in New Haven County or,
(ii) 5% of the amount of gross rents payable under leases (including this Lease)
in place at the Building, provided that if no managing agent is employed by
Landlord, a sum in lieu thereof which is not in excess of the lesser of (y) the
then prevailing rates for management fees payable to third party managers of
other similar buildings located in New Haven County or (z) 5% of the amount of
gross rents payable under leases (including this Lease) in place at the
Building; (14) the cost of any capital improvements or additions to the Building
and of any machinery or equipment installed in the Building which improve the
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safety, comfort or amenities available to tenants of the Building or which have
the effect of reducing the expenses which otherwise would be included in
Operating Expenses provided that such costs shall be reasonably amortized over
the useful life, as determined in accordance with real estate accounting
principles, together with interest at 11% per annum; (15) reasonable legal,
accounting and other professional fees incurred in connection with the
operation, maintenance and management of the Building; (16) all other charges
properly allocable to the repair, operation and maintenance of the Building in
accordance with generally accepted accounting principles. Landlord may, in the
event the Premises are less than 95% leased, adjust expenses for only the
following categories or items: snow plowing and landscaping. Landlord will pass
through the actual Operating Expenses and shall not markup or add-on to
Operating Expenses.
Excluded from Operating Expenses shall be the following: (aa) depreciation
(except as provided above); (bb) interest on and amortization of debts; (cc)
leasehold improvements including redecorating made for tenants of the Building;
(dd) brokerage commissions and advertising expenses for procuring new tenants of
the Building; (ee) refinancing costs (including legal, accounting and other
professional costs in connection thereof); (ff) Real Estate Taxes; (gg) the cost
of any item included in Operating Expenses under clauses (1) - (16) to the
extent that such cost (y) is reimbursed by an insurance company or a condemnor
or a tenant (except as a reimbursement of Operating Expenses) or any other party
or (z) was reimbursable by an insurance company, condemnor, tenant (except as a
reimbursement of Operating Expenses) or other party but not reimbursed by reason
of Landlord's default; (hh) salaries of employees above the grade of building
manager or building superintendent; (ii) legal, accounting and professional fees
incurred by Landlord in negotiating or enforcing any lease of any other tenant
in the Building; and (jj) the cost of repairs made to the Building if the need
for such repair is due to the gross negligence or willful misconduct of
Landlord; and (kk) the cost of performance of Landlord's Work.
Landlord agrees that prior to incurring any capital expenditure (which
would be of such a nature that it would be included in Operating Expenses) in
excess of $25,000.00, it will give notice to Tenant of the anticipated
expenditure. Tenant shall have 10 days within which to respond to such notice
and Tenant's failure to respond within such 10 day period shall be deemed to
constitute approval of the expenditure. If Tenant, within such 10 day period,
notifies Landlord that it objects to such expenditure, it shall specify the
reason(s) for such objection. Landlord and Tenant shall, in good faith, attempt
to resolve any such objection. If Tenant's objection is based, in whole or in
part, on the cost of the anticipated expenditure, Tenant may put the matter out
for bid to reputable contractors or suppliers and present such bids to Landlord
in connection with their attempts to resolve the objection. If the cost of the
anticipated expenditure is less than $50,000, and despite such good faith
efforts, Landlord and Tenant fail to reach agreement, Landlord, in its sole, but
reasonable, discretion, may elect to incur such expense and it shall, as
appropriate, be included in Operating Expenses. If the cost of the anticipated
expenditure is equal to or greater than $50,000, and despite such good faith
efforts, Landlord and Tenant fail to reach agreement, Landlord shall not incur
the expense.
"Real Estate Taxes" shall mean and include: (i) all general and special
taxes, assessments, duties and levies, if any, of any kind which are assessed,
levied, charged, confirmed or imposed by any public authority upon the Building,
its operations or the rent provided for hereunder, which are payable (adjusted
after protest or litigation, if any) for any part of the term of this Lease,
including without limitation personal property taxes paid by Landlord with
respect to equipment used in connection with the operation of the Building,
exclusive of penalties or discounts; and (ii) the reasonable expenses of
contesting the amount or validity of any such taxes, charges or assessments,
such expense to be applicable to the period if the term is contested. Excluded
from Real Estate Taxes shall be any capital
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levy, net income, estate, succession, inheritance, transfer sales and use, and
franchise taxes payable by Landlord.
Landlord shall estimate the amount of Operating Expenses and Real Estate
Taxes which may be payable hereunder. Said estimates shall be based upon careful
and reasonable examination of all available economic data and projections. The
amounts of said estimates shall be divided into equal monthly payments which
shall be paid by Tenant in advance, along with Tenant's regular monthly payment
of Fixed Rent. Should the actual amount of Operating Expenses and Real Estates
Taxes provided for above be more or less than Landlord's estimate, then Tenant's
monthly payment as aforesaid shall be adjusted to more nearly reflect the same.
Within thirty (30) days from the date Landlord presents each annual bill
to Tenant for payments of Operating Expenses and Real Estate Taxes, Tenant will
pay to Landlord in a lump sum that amount by which Tenant's actual pro rata
share exceeds the amount of Tenant's estimated payments theretofore. Should the
amount of Tenant's estimated payments exceed Tenant's Pro Rata Percentage, then
Landlord shall, at Landlord's option, either credit the amount of the
overpayment to the payment of Additional Rent next coming due or within said
thirty (30) day period refund such overpayment to Tenant. A certified bill (from
the Building Manager) for Operating Expenses and a real estate tax bill (or copy
thereof) submitted by Landlord to Tenant shall be sufficient evidence of the
amount of Operating Expenses and Real Estate Taxes with respect to the Land and
improvements thereon. Tenant's Pro Rata Percentage of any Operating Expenses and
Real Estate Taxes in such payments hereunder shall be adjusted in the first and
last years of the Lease to take into consideration the fact that Tenant may only
be in possession for a partial year.
Tenant may, within 120 days after receiving Landlord's statement of
Operating Expenses, give Landlord written notice ("Review Notice") that Tenant
intends to review Landlord's records of the Operating Expenses for that Lease
Year. Within a reasonable time after receipt of the Review Notice (which period
shall not exceed 60 days), Landlord shall make all pertinent records available
for inspection that are reasonably necessary for Tenant to conduct its review.
Tenant may inspect the records at the office of Landlord or Landlord's property
manager. If Tenant retains an agent to review Landlord's records, the agent must
be with a licensed CPA firm. Tenant shall be solely responsible for all costs,
expenses and fees incurred for the audit. Within 60 days after the records are
made available to Tenant, Tenant shall have the right to give Landlord written
notice (an "Objection Notice") stating in reasonable detail any objection to
Landlord's statement of Operating Expenses for that Lease Year. If Tenant fails
to give Landlord an Objection Notice within the 60 day period or fails to
provide Landlord with a Review Notice within the 120 day period described above,
Tenant shall be deemed to have approved Landlord's statement of Operating
Expenses and shall barred from raising any claims regarding the Operating
Expenses for that Lease Year. If Tenant provides Landlord with a timely
Objection Notice, Landlord and Tenant shall work together in good faith to
resolve any issues raised in Tenant's Objection Notice. If Landlord and Tenant
determine that Operating Expenses for the Lease Year are less than reported,
Landlord shall provide Tenant at Landlord's option either a refund of the amount
of overpayment or with a credit against the next installment of Additional Rent
in the amount of any overpayment by Tenant. Likewise, if Landlord and Tenant
determine that Operating Expenses for the Lease Year are greater than reported,
Tenant shall pay Landlord the amount of any underpayment within 30 days. The
records obtained by Tenant shall be treated as confidential. In no event shall
Tenant be permitted to examine Landlord's records or to dispute any statement of
Operating Expenses unless Tenant has paid and continues to pay all Fixed Annual
Rent and Additional Rent when due.
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Tenant shall pay for all ad valorem taxes on Tenant's Property and its
personal property, if any, and on the value of leasehold improvements relating
to the Premises, to the extent that same are (i) separately assessed and taxed
and (ii) exceed standard building allowances.
If Landlord shall receive a refund of Real Estate Taxes for any period
during the term of this Lease after the year during which the term of this Lease
shall commence, then Landlord shall pay over to Tenant the pro rata percentage
of Real Estate Taxes paid by Tenant as set forth above, to the extent Tenant
shall have borne any portion of such taxes so refunded, after deducting from any
such taxes so refunded the fees and expenses incurred by Landlord in obtaining
such refund.
So long as Tenant is not in default of its obligations under this Lease
and Tenant continues to pay its Pro Rata Percentage of Landlord's estimate of
Real Estate Taxes pending a final determination of the amount of Real Estate
Taxes, and if Landlord is not contesting or reviewing the Real Estate Taxes,
Tenant or its designees shall have the right to contest or review all such Real
Estate Taxes by appropriate legal proceedings, (which, if instituted, Tenant or
its designees shall conduct properly and promptly at its own cost and expense,
and free of any expense to Landlord, and, if necessary, Landlord will cooperate
with Tenant and shall execute all documents necessary to accomplish the
foregoing).
6.2 Any Additional Rent payable pursuant to Article 6 shall be collectable
by Landlord in the same manner as Fixed Rent and Landlord shall have the same
remedies for nonpayment thereof as Landlord has hereunder for non-payment of
Fixed Rent.
ARTICLE 7 INSURANCE
7.1 Tenant, at Tenant's expense, shall comply with all rules, regulations
or requirements of the Connecticut Board of Fire Underwriters and the
Connecticut Fire Insurance Rating Organization or any similar body applicable to
the Premises. Tenant, at Tenant's expense, shall further comply with any and all
safety recommendations of Landlord's or Tenant's insurance companies. Landlord
shall comply with all rules, regulations or requirements of the Connecticut
Board of Fire Underwriters and the Connecticut Fire Insurance Rating
Organization or any similar body applicable to the common areas of the Bui]ding.
Landlord shall further comply with any and all safety recommendation or
Landlord's insurance companies with respect to the common areas of the Building.
Landlord's costs and expenses in connection with the foregoing shall be deemed
to be part of Operating Expenses payable under the provisions of this Lease.
7.2 If by any reason of any act or omission of the part of Tenant, the
rate of fire insurance with extended coverage on the Building or equipment or
other property of Landlord located at the Building or on the Land or any other
tenant or occupant of the Building shall be higher than it otherwise would be,
Tenant shall reimburse Landlord, on demand, for that part of the premiums for
fire insurance and extended coverage paid by Landlord and such other tenants or
occupants because of such act or omission on the part of the Tenant. Landlord
will include a provision in the leases of other tenants in the Building
substantially similar to the provisions of this Section 7.2.
7.3 (a) Tenant shall obtain and keep in full force and effect during the
Term, at its own cost and expense and in the following amounts or such greater
amounts as Landlord or the holder of the Superior Mortgages may reasonably
request for the benefit of and protecting Landlord, its property managers and
the holder of the Superior Mortgages (i) ISO Simplified Commercial General
Liability
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insurance (with contractual liability rider) against claims for bodily death or
property damage occurring to, upon or about the Premises. The limits of
liability of such insurance shall be an amount of not less than Two Million and
00/100 Dollars ($2,000,000.00) per occurrence, Bodily Injury including death and
Two Million and 00/100 Dollars ($2,000,000.00) per occurrence, Property Damage
Liability or Two Million and 00/100 Dollars ($2,000,000.00) combined single
limit for Bodily Injury and Property Damage Liability; and (ii) insurance
against loss or damage by fire, and such other risks and hazards as are
insurable under present and future standard forms of fire and extended coverage
insurance policies, to Tenant's Property for the full insurable value thereof,
protecting Landlord, the holder of the Superior Mortgages, and Tenant as
insureds as their respective interests may appear.
(b) Tenant shall obtain such other insurance in such amounts as may
from time to time be reasonably required by Landlord against other insurable
hazards which at the time are commonly and generally insured against by tenants
having similar uses to Tenant's use, with due regard being given to the type of
building, its location, construction, use and occupancy.
(c) Said insurance is to be written in form and substance
satisfactory to Landlord by a good and solvent insurance company of recognized
standing, admitted to do business in the State of Connecticut, which shall be
reasonably satisfactory to Landlord and Superior Mortgagee. Tenant shall
procure, maintain and place such insurance and pay all premiums and charges
therefor and upon failure to do so Landlord may, but shall not be obligated to,
procure, maintain and place such insurance or make such payments, and in such
event Tenant agrees to pay the amount thereof, plus interest at the Default
Rate, to Landlord on demand and said sums shall be in each instance collectable
as Additional Rent on the first day of the month following the date of payment
by Landlord. Tenant shall cause to be included in all such insurance policies a
provision to the effect that the same will be non-cancelable or non-renewable
except upon thirty (30) days' prior written notice to Landlord. On the earlier
to occur of the date Tenant enters onto the Premises or the Commencement Date,
the original or certified duplicate insurance policies or appropriate
certificates shall be deposited with Landlord. An renewals, replacements, or
endorsements thereto shall also be deposited with Landlord prior to the
expiration of the policies to make certain that said insurance shall be in full
force and effect during the Term.
7.4 The Landlord shall maintain (the cost of which shall be an Operating
Expense):
(a) ISO Simplified Commercial General Liability Insurance. The
limits of liability of such insurance shall be an amount not less than Two
Million and 00/100 Dollars ($2,000,000.00) per occurrence, Bodily Injury
including death and Two Million and 00/100 Dollars ($2,000,000.00) per
occurrence, Property Damage Liability or Two Million and 00/100 Dollars
($2,000,000.00) combined single limit for Bodily Injury and Property Damage
Liability. Such policies shall name Tenant as additional insured with respect to
acts caused by or resulting from the negligence of the Landlord at the Building
and include Contractual Liability coverage;
(b) Property insurance on the Building, the Premises and the Common
Areas insuring the full replacement value thereof, on a Special Causes of
Loss-Replacement Cost basis and shall include, but not be limited to, fire and
extended coverage perils. The property to be insured by the Landlord shall also
include all improvements made by Landlord to the Premises, but shall not include
improvements made by Tenant (unless the Tenant shall (x) give the Landlord
notice of the improvement(s) made by the Tenant together with evidence of the
cost thereof; (y) provide the Landlord and its insurer with the ability to
inspect the same; and (z) pay to the Landlord any increase in the insurance
premiums that may
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result by reason of the Tenant having made such improvement(s) nor Tenant's
furniture and furnishings or any fixtures or equipment removable by the Tenant
under the provisions of this Lease; and
(c) If applicable, Boiler and Machinery coverage in an amount that
is adequate for the exposure at risk.
7.5 Each party agrees to use its best efforts to include in each of its
fire and extended coverage insurance policies (insuring the Building and
Landlord's property therein, in the case of Landlord, and insuring Tenant's
Property and business interest in the Premises, in the case of Tenant, against
loss, damage or destruction by fire or other casualty) a waiver of the insurer's
right of subrogation against the other party, provided such waiver shall be
obtainable without additional charge, unless the other party shall agree in
writing to pay the insurer's additional charge therefor. The policy of insurance
or certificate thereof delivered to Landlord shall include reference to the
waiver of subrogation referred to above.
ARTICLE 8 COMPLIANCE WITH LAWS
8.1 The Tenant agrees that its obligations to make payment of the Basic
Rent, Additional Rent and all other charges on its part to be paid, and to
perform all of the covenants and agreements on its part to be performed during
the Term hereunder shall not, except as herein set forth in the event of
condemnation by public authority, be affected by any present or future law,
by-law, ordinance, code, rule, regulation, order or other lawful requirement
regulating or affecting the use which may be made of the Premises.
8.2 Landlord shall comply with all present and future laws, ordinances,
requirements, orders, directives, rules and regulations of federal state, county
and city governments and of all other governmental authorities having or
claiming jurisdiction over the Land (excluding those relating to Tenant's
specific manner of use of the Premises) or appurtenances or any part thereof as
enforced by the applicable governmental authority. Without limiting the
generality of the foregoing, Landlord shall, in performing Landlord's Work,
comply with Americans with Disabilities Act Accessibility Guidelines for
Buildings and Facilities (the "ADAAG"). Except for the Landlord's Work to be
performed under Article 3 of this Lease, the expenses incurred by Landlord under
this Paragraph shall be deemed Operating Expenses under Paragraph 6 of the
Lease.
8.3 During the Term the Tenant shall comply, at its own cost and expense,
with all applicable laws, by-laws, ordinances, codes, rules, regulations,
orders, and other lawful requirements (including, without limitation, the ADAAG)
of the governmental bodies having jurisdiction, which are applicable to, or by
reason of, the Tenant's particular manner of use of the Premises or the fixtures
and equipment therein and thereon; the orders, rules and regulations of the
National Board of Fire Underwriters, or any other body hereafter constituted
exercising similar functions, which may be applicable to the Premises, the
fixtures and equipment therein or thereon or the use thereof, and the
requirements of all policies of public liability, fire and all other types of
insurance at any time in force with respect to the Premises, the Building or the
Land and the fixtures and equipment therein and thereon (provided the Tenant has
been given notice of the requirements of such policies).
8.4 In connection with the operation by Arch of its business, Arch has
advised Landlord that it is necessary that Arch conduct at least two emergency
evacuation drills in each calendar year. In connection with the operation by
Tenant of its business, Tenant has also advised Landlord that it is
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necessary that Tenant conduct emergency evacuation drills. Landlord has agreed
with Arch and agrees with Tenant to coordinate and cooperate with Arch and
Tenant in the conduct of such drills, and to use reasonable efforts to cause
Arch, Tenant and any other tenants in the Building to conduct drills in
conjunction and cooperatively with each other. Tenant agrees that it shall
cooperate with Landlord and Arch in connection with the conduct of such drills.
8.5 Tenant or its designees shall have the right, in good faith, to
contest or review the applicability or scope of the application of applicable
laws as they affect the Building (unless Landlord is contesting or reviewing the
same) or the Tenant's operations therein by appropriate legal proceedings,
(which, if instituted, Tenant or its designees shall conduct properly and
promptly at its own cost and expense, and free of any expense to Landlord, and,
if necessary, Landlord will cooperate with Tenant and shall execute all
documents necessary to accomplish the foregoing). Notwithstanding the foregoing,
Tenant shall promptly comply with any and all directives, orders, rulings, laws,
rules and regulations if at any time the Building or any part thereof shall then
be immediately subject to forfeiture, or if Landlord or Tenant shall be subject
to any civil criminal liability or penalty arising out of any non-compliance or
claimed non-compliance, or if failure to comply may result in a lien being
placed against the Premises, or if the holder of any Superior Mortgage shall
require compliance.
ARTICLE 9 ALTERATIONS; IMPROVEMENTS
9.1 Tenant shall make no changes or alterations in or to the Premises of
any nature without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned (provided that Tenant may make
interior, non-structural alterations which do not affect the building systems
(including the heating, ventilating and air conditioning systems, plumbing,
electrical and mechanical systems) or the roof and which cost less than
$100,000.00 without the Landlord's consent), provided that (i) Tenant delivers
plans and specifications to Landlord for such alterations; (ii) Tenant otherwise
complies with the provisions of Section 9.2 below); (iii) Landlord's engineer
and/or architect reviews and approves all plans and specifications for and
inspects the construction of changes or alterations that affect the Building
systems (including the heating, ventilating and air conditioning systems,
plumbing, electrical and mechanical systems) or the roof; and (iv) the same are
conducted in accordance with the terms of Superior Mortgages. All fixtures,
partitions and items of personal property which are permanently affixed to the
Premises or the Building systems, railings and like installations, installed in
the Premises at any time, either by Tenant or by Landlord shall remain upon and
be surrendered with the Premises unless Landlord, by notice to Tenant given no
later than 60 days prior to the Expiration Date or upon the prior termination of
this Lease, elects to have them removed by Tenant, in which event, the same
shall be removed from the Premises by Tenant, at Tenant's expense. Landlord
agrees that Tenant may remove the Tenant's Property, including items described
on Exhibit J (and enhancements to and replacements of such items as shall be
identified by Tenant to Landlord) upon the expiration or termination of the
Lease and Tenant agrees that it shall remove the same if Landlord requests that
do so within 60 days prior to the Expiration Date. Nothing in this Section shall
be construed to prevent Tenant's removal of Tenant's Property, but upon removal
of any Tenant's Property from the Premises or upon removal of other
installations as may be required or permitted by Landlord, Tenant shall
immediately, and at its expense, repair and restore the Premises to the
condition existing prior to installation and repair any damage to the Premises
or the Building due to such removal. All property permitted or required by
Landlord to be removed from the Premises at the end of the Term remaining in the
Premises after Tenant's removal shall be deemed abandoned and may, at the
election of Landlord, either be retained as Landlord's property or may be
removed from the Premises by Landlord at Tenant's expense.
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9.2 Tenant shall, before making any alterations, additions, installations
or improvements, at its expense, obtain all permits, approvals and certificates
required by any governmental or quasi-governmental bodies and (upon completion)
certificates of final approval thereof and shall deliver promptly duplicates of
all such permits approvals and certificates to Landlord and Tenant agrees to
carry and will cause Tenant's contractors and subcontractors to carry such
workmen's compensation, general liability, personal and property damage
insurance as Landlord may reasonably require. Notwithstanding anything in this
Lease to the contrary Tenant shall, unless Landlord in the exercise of its sole
discretion otherwise permits Tenant to use its contractors, use Landlord's
contractors in connection with any work involving tie-ins to building systems or
roof penetrations. As permitted by law, Tenant agrees to obtain and deliver to
Landlord written and unconditional waivers or subordinations of mechanic's liens
upon the Land and Building for all work, labor and services to be performed and
all materials to be furnished in connection with such work and certificates of
full payment, signed by all contractors, sub-contractors materialmen and
laborers to become involved in such work. Notwithstanding the foregoing, if any
mechanic's lien is filed against the Premises, Land or Building for work claimed
to have been done for, or materials furnished to, Tenant, whether or not done
pursuant to this Article, the same shall be discharged by Tenant within thirty
(30) days thereafter, at Tenant's expense, by filing the bond required by law or
by paying the claim.
ARTICLE 10 REPAIRS
10.1 Tenant shall take care of the Premises and, at Tenant's sole cost and
expense, shall (i) make all repairs and replacements, as and when needed to
preserve the Premises in good working order and condition, except that Tenant
shall not be required to make any structural repairs or structural replacements
to the Premises unless necessitated or occasioned by the acts, omissions or
negligence of Tenant, or any of its servants, employees, contractors, agents,
visitors, invitees, or licensees, or by the use or occupancy or manner of use or
occupancy of the Premises by Tenant or any such person; and (ii) provide for
customary rubbish removal service for the Premises and keep and maintain the
Premises, clean and free of debris.
10.2 Landlord shall keep and maintain the Building and its fixtures,
appurtenances, systems and facilities serving the premises in good working
order, condition and repair and shall make all repairs, structural and
otherwise, interior and exterior, as and when needed in or about the Building,
the costs of which shall be included in the Operating Expenses, except for (i)
those repairs for which Tenant is responsible pursuant to any other provision,
including but not limited to Section 10.1 above, or (ii) repairs to Tenant's
Property provided, however, that Landlord shall have no obligation or liability
for repairs in the Premises until receipt of written notice from Tenant
specifying the repairs required.
10.3 Tenant shall, at all times, designate a contact person(s) having
availability 24 hours a day, 7 days a week, to (i) provide Landlord with access
to the Premises in the event of an emergency; and (ii) respond to alarms.
ARTICLE 11 UTILITIES AND SERVICES
11.1 Landlord shall furnish and distribute to the Premises through the
base Building system pre-conditioned outside air, at a temperature range of
between 53(degree) F and 58(degree) F (with a set point of 55(degree) F) in
reasonable volumes and velocities on a year round basis on Business Days from
6:00 A.M. to 6:00 P.M. Monday through Friday and Saturdays 6:00 A.M. to 12:00
noon. Landlord covenants that it will, as required, run both chillers in an
effort to maintain the temperature at or approximate to the 55(degree) F set
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point. The term "Business Days" shall mean all days except Sundays and days
observed by the federal government as legal holidays. If Tenant shall require
such service at any other time ("after hours"). Landlord shall furnish after
hours service upon reasonable advance notice from Tenant, given between the
hours of 9:00 AM. and 1:00 P.M. of any week-day, Business Day, and Tenant shall
pay the actual charges therefor on Landlord's demand. If any of the other
tenants of the Building shall request and receive after hours service, pursuant
to Landlord's obligation to provide the same to them, at the same time as
Tenant, only that equitably prorated portion of the charge made by Landlord by
such service shall be allocated to Tenant. Tenant shall be responsible for and
pay costs associated with (i) the installation, maintenance, repair and
operation of any equipment necessary to provide humidification to the Premises;
and (ii) the installation of any additional equipment together with the
maintenance, repair and operation of all such additional equipment necessary to
re-heat the air. All of Tenant's work in connection with the installation of
such equipment shall be performed in accordance with the provisions of Article 9
hereof.
11.2 (a) From and after the earlier to occur of (i) the date Tenant's
business is fully operational in the Premises (i.e. when Tenant's equipment has
been installed and personnel moved in) or (ii) the first day of the 7th month of
the Term (such date, the "Utility Commencement Date"), Tenant shall pay for all
electricity, gas, water and all other utilities used or consumed at the
premises, as Additional Rent.
(b) Tenant shall pay to Landlord a Premises Electric Charge of,
initially, $5.00 per square foot per annum. The Premises Electric Charge shall
be payable in equal monthly installments, in advance, together with Tenant's
monthly payment of Fixed Rent. Landlord shall, at Landlord's expense, prior to
the end of the Arch Move-Out Period, install a submeter to measure Tenant's
consumption of electricity at the Premises. The cost of electricity shall be
determined on the basis of the rate charged for such load and usage in the
service classification in effect from time to time pursuant to which Landlord
then purchased electric current for the entire Building. The Premises Electrical
Charge shall be reconciled with the actual costs approximately every 6 months
during the first 12 month period following the Utility Commencement Date and not
less than annually thereafter. The Premises Electrical Charge shall be adjusted,
if necessary, from time to time, to appropriately reflect the cost of
electricity delivered to and consumed at the Premises.
(c) Tenant's use of electrical service shall not exceed, either in
voltage, rated capacity, or overall load, that which Landlord deems to be
standard for the Building. The electric capacity of the Building expressed in
watts per square foot ("w/sf") is 40 w/sf for the entire Building, including
mechanical systems, and 20 w/sf for non-mechanical loads. Tenant shall be
permitted to utilize its pro rata share of such electrical service. If Tenant
requests permission to consume excess electrical service, Landlord may condition
consent upon conditions that Landlord reasonably elects (including, without
limitation, the installation of utility service upgrades, additional submeters,
air handlers or cooling units), and the additional usage, installation and
maintenance costs shall be paid by Tenant. Electrical service to the Premises
may be furnished by one or more companies providing electrical generation,
transmission and distribution services, and the cost of electricity may consist
of several different components or separate charges for such services, such as
generation, distribution and stranded cost charges. Landlord shall have the
exclusive right to select any company providing electrical service to the
Premises, to aggregate the electrical service for the Land and Premises with
other building, to purchase electricity through a broker and/or buyers group and
to change the providers and manner of purchasing electricity.
(d) If either the quantity or character of utility service is
changed by the public utility corporation supplying such service to the Building
or the Premises is no longer available or suitable for
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Tenant's requirements, no such change, unavailability or unsuitability shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Landlord or
Landlord's agents.
11.3 (a) Landlord shall supply water from a 4" street main with a gallon
per minute ("gpm") flow of 250 gpm to a point or points in the Premises. Tenant
shall be permitted to utilize its pro rata share of such water service. Tenant
shall pay for all water consumed or utilized at the Premises. Landlord may, at
Landlord's cost, install a water meter or submeter and thereby measure Tenant's
consumption of water for all purposes. Tenant, at Tenant's sole cost and
expense, shall keep any such meter or submeter and any such installation
equipment in good working order and repair. Tenant shall pay for water consumed
as shown on said meter or submeter and sewer charges thereon, as and when bills
are rendered.
(b) Tenant agrees that (i) all waste water discharged from the
Premises, including from laboratories, shall be free of all chemicals and
biological waste other than those Tenant is permitted to discharge pursuant to
applicable law and/or valid permits into the Building's collection facility and
into the sanitary sewer system; and (ii) it shall collect all chemicals and
biological waste into appropriate hazardous waste storage receptacles and
discard the same in accordance with applicable laws and shall not dispose of the
same through the Building's plumbing system, unless, and only to the extent,
Tenant is permitted to do so by law and/or valid permits.
11.4 Landlord reserves the right to stop the service of the air
conditioning, elevator, plumbing, electrical, sanitary mechanical or other
service or utility systems of the Building when necessary by reason of accident
or emergency, or mechanical breakdown, or requirement of law or any cause beyond
Landlord's reasonable control or, after notice to Tenant, for repairs,
alterations, replacements or improvements, which in the judgement of Landlord,
are desirable or necessary. Except in the event of an emergency or systems
failure caused by an accident or other cause beyond Landlord's reasonable
control, Landlord shall use commercially reasonable efforts to give Tenant as
much prior notice as possible prior to the stoppage.
11.5 The Landlord shall not be required to provide heat, air conditioning,
or ventilation to the Premises if any action of the Tenant, Act of God, or other
unforeseen circumstances makes it impossible for the Landlord reasonably to do
so. Further, Landlord shall not be liable for the interruption, curtailment,
stoppage or suspension of services and utilities when necessary by reason of
accident or emergency or suspension of utility services or when necessary for
repairs, alterations, replacements or improvements desirable or necessary in the
reasonable judgment of Landlord or for any cause beyond the reasonable control
of Landlord. Landlord shall use commercially reasonable efforts to restore
services after an interruption shall occur. In the event of any such
interruption, curtailment, stoppage or suspension, there shall be no diminution
or abatement of rent, additional rent or other charges due from Tenant to
Landlord hereunder, Tenant's obligations hereunder shall not be affected or
reduced, and Landlord shall have no responsibility or liability for any such
interruption, curtailment, stoppage or suspension. Notwithstanding anything to
the contrary contained in this section 11.5, in the event there shall be an
interruption, curtailment or a suspension of a building system ("Service
Interruption") and (i) if such Service Interruption shall continue for more than
5 consecutive Business Days; and (ii) such Service Interruption shall materially
impair the operation of Tenant's business in the Premises, rendering all or any
material part of the Premises inaccessible or untentantable and Tenant's
generator (if any) has not functioned in a manner that would permit Tenant to
continue to operate in all or a material portion of
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the Premises and (iii) such Service Interruption has not been caused by the
public utility servicing or supplying the Building or by an act of Tenant or
Tenant's servants, employees or contractors, then as Tenant's sole remedy in
connection with such Service Interruption, Tenant shall be entitled to an
abatement of Fixed Rent and Additional Rent (based on the square footage of the
Premises subject to the Service Interruption) beginning on the sixth consecutive
Business Day of such Service Interruption and ending on the date such Service
Interruption ceases.
11.6 Landlord shall provide a parking area contiguous or adjacent to the
Building. Tenant shall have the non-exclusive right to use its proportionate
share of the available parking spaces and the right together with the other
tenants and occupants of the Building, and its and their employees, agents, and
invitees, to use any driveways appurtenant thereto for the purposes of egress
and ingress, parking of vehicles for itself, its customers, and employees in
connection with and incidental to the business conducted by Tenant in the
Premises, all without additional charge.
11.7 Landlord agrees to (a) provide building security to the Building,
which may be through the installation and maintenance of a card access system
(Tenant shall be able to access the Premises 24 hours a day, 7 days a week); (b)
maintain and repair the parking areas, flag poles, driveways, curbs and
sidewalks on the Land, (c) to keep the surface of the parking area, driveways
and sidewalks located on the Land reasonably free from snow, ice, dirt and
rubbish and (d) to insure, protect and maintain the common areas located on the
Land, whether or not sheltered, including the maintenance of shrubbery and grass
areas in and around the Building; (e) maintain a back-up generator to provide
power for emergency services to the Building; and (f) at all times designate a
contact person(s) having availability 24 hours a day 7 days a week to respond to
Tenant in the event of an emergency. Landlord shall use commercially reasonable
efforts, from time to time, as needed, to control the goose population that
inhabits the Common Areas, from time to time. Landlord's expense in performing
such obligations shall be part of the Operating Expenses described in Article 6.
Tenant shall, at Tenants sole election, cost and expense, install, maintain,
repair and operate any back-up generator necessary or desirable for the conduct
of its operations. If the generator would best be located in a common area,
Landlord shall, in accordance with the provisions of Section 2.1 hereof, give
Tenant permission to so locate the same. Tenant may also place and maintain a
flag on one of the flag poles on the Land.
ARTICLE 12 DAMAGE TO OR DESTRUCTION OF THE PREMISES
12.1 Except as provided below, in the event of partial or total
destruction of the Premises during the Term by fire or other casualty, the
Landlord shall, as promptly as practicable after receipt of any insurance
proceeds available as a result of such casualty, repair, reconstruct or replace
the portions of the Premises destroyed as nearly as possible to their condition
prior to such destruction, except that in no event shall the Landlord be
obligated to expend more for such repair, reconstruction or replacement than the
amounts of any such insurance proceeds actually received. Commencing on the date
of such casualty and during the period of such repair, reconstruction and
replacement there shall be an equitable abatement of Fixed Rent hereunder for up
to one (1) year from the date of such casualty in proportion to the loss of
usable floor area in the Premises.
12.2 If (i) the Building is so extensively destroyed by fire or other
casualty that an independent engineer or architect certifies that the Premises
cannot reasonably be expected to be susceptible of repair, reconstruction or
replacement within a period of two hundred-ten (210) days from the Deemed Start
Date (as defined below) and if the damage shall materially and adversely
interfere with the conduct of Tenant's business; or (ii) any damage results from
causes or risks not required to be insured against by
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the Landlord hereunder or (iii) any holder of a Superior Mortgage refuses to
promptly make such net proceeds available for such repair, reconstruction or
replacement; or (iv) a casualty occurs during the last 2 years of the Initial
Term or any Extended Term and an independent engineer or architect certifies
that the Premises cannot reasonably be expected to be susceptible to repair,
reconstruction or replacement within 90 days of the Deemed Start Date, the
Landlord or Tenant may terminate this Lease by giving written notice to the
other within sixty (60) days after the date of such destruction. Provided
further, that if, despite diligent efforts, the Landlord has been unable to
restore or, if an independent engineer or architect, after the passage of 180
days from the Deemed Start Date, determines (at Tenant's sole cost and expense),
that Landlord's progress is such that it is not likely that the Landlord will be
able to restore the Premises to their condition prior to such destruction within
two hundred-ten (210) days following the Deemed Start Date, then (y) Tenant may
terminate this Lease by giving Landlord thirty (30) days' prior written notice,
unless Landlord substantially completes the repair and restoration work within
said thirty (30) day period or performs a sufficient amount of work so that it
appears likely that Landlord will complete restoration within 210 days from the
Deemed Start Date, in which event the termination notice shall be null and void;
or (z) Landlord may terminate this Lease by written notice to the Tenant. In the
event of any such notice of termination, this Lease shall terminate as of, and
Fixed Rent and Additional Rent shall be appropriately apportioned through and
abated from and after, the date of such notice of termination. The "Deemed Start
Date" shall mean the earlier to occur of the (i) date work on rebuilding or
restoration actually commences; or (ii) date which is ninety days after the date
of the casualty, provided, however, if arson or another criminal investigation
concerning the origins of the casualty is pending, then the Deemed Start Date
shall mean the date work actually commences.
12.3 Landlord shall not be liable for any inconvenience or annoyance to
Tenant or injury to the business of Tenant resulting in any way from such damage
by fire or other casualty or the repair thereof. Landlord will not carry
insurance of any kind on Tenant's Property, and Landlord shall not be obligated
to repair any damage thereto or replace the same.
ARTICLE 13 EMINENT DOMAIN
13.1 If more than twenty percent (20%) of the usable floor area of the
Premises, or more than twenty percent (20%) of the parking area available for
use by the Tenant shall be taken by eminent domain or appropriated by public
authority or if the Tenant shall be deprived of suitable vehicular or pedestrian
access to the Premises or the Property by virtue of such a taking or
appropriation, the Landlord or the Tenant may terminate this Lease by giving
written notice to the other within thirty (30) days after such taking or
appropriation. In the event of such a termination, this Lease shall terminate as
of the date the Tenant must surrender possession or, if later, the date the
Tenant actually surrenders possession, and the Fixed Rent and Additional Rent
reserved shall be apportioned and paid to and as of such date.
13.2 If all or any part of the Premises is taken or appropriated by public
authority as aforesaid and this Lease is not terminated as set forth above, the
Landlord shall, subject to the rights of any holder of any Superior Mortgagee,
as promptly as practicable, apply any such damages and compensation awarded (net
of the costs and expenses, including reasonable attorneys' fees, incurred by the
Landlord in obtaining the same) to secure and close so much of the Premises as
remain and shall restore the Building to an architectural whole and except that
in no event shall the Landlord be obligated to expend more for such replacement
than the net amount of any such damages, compensation or award which the
Landlord may have received as damages in respect of the Building and any other
improvements situated on the Property as they existed immediately prior to such
taking or appropriation; in such event there shall be an
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equitable abatement of Fixed Rent in proportion to the loss of usable floor area
in the Premises after giving effect to such restoration, from and after the date
the Tenant must surrender possession or, if later, the date the Tenant actually
surrenders possession.
13.3 In the event of any such acquisition or condemnation of all or any
part of the Building and/or Land, Landlord shall be entitled to receive the
entire award for any such acquisition or condemnation. Tenant shall have no
claim against Landlord or the condemning authority for the value of any
unexpired portion of the Term and Tenant hereby expressly assigns to Landlord
all of its right, title and interest in any to any such award, and also agrees
to execute any and all further documents that may be required in order to
facilitate the collection thereof by Landlord. Nothing contained in this Section
shall be deemed to prevent Tenant from making a separate claim in any
condemnation proceedings (but not against Landlord) for any moving expenses or
any other expenses, claims or damages to which Tenant may be entitled, provided
the award thereof does not diminish the award otherwise payable to Landlord and
for the value of any Tenant's Property which would be removable at the end of
the Term pursuant to the provisions of Article 9.
ARTICLE 14 CONDITIONS OF LIMITATION
14.1 This Lease and the Term and estate hereby granted are subject to the
limitation that;
(a) if Tenant shall file a voluntary petition in bankruptcy or
insolvency, or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present or
any future federal bankruptcy act or any other present or future applicable
federal, state or other statute or law, or shall make an assignment for the
benefit of creditors or shall seek or consent to or acquiesce in the appointment
of any trustee, receiver or liquidator of Tenant or of all or any part of
Tenant's Property; or
(b) if, within sixty (60) days after the commencement of any such
proceeding against Tenant, such proceeding shall not have been dismissed, or if,
within sixty (60) days after the appointment of any trustee, receiver or
liquidator of Tenant, or of all or any part of Tenant's property, without the
consent or acquiescence of Tenant, such appointment shall not have been vacated
or otherwise discharged, or if any execution or attachment shall be issued
against Tenant or any of Tenant's Property pursuant to which the Premises shall
be taken or occupied or attempted to be taken or occupied; or
(c) if Tenant shall default in the payment when due of any
installment of Fixed Rent or in the payment when due of any Additional Rent
(provided that Landlord shall, not more than 2 times in any 12 consecutive month
period provide Tenant with ten (10) days' written notice and opportunity to cure
Tenant's failure to pay Fixed Rent or Additional Rent when due); or
(d) if Tenant shall default in the observance or performance of any
term, covenant or condition of this Lease on Tenant's part to be observed or
performed (other than the covenants for the payment of Fixed Rent and Additional
Rent) and Tenant shall fail to remedy such default within thirty (30) days after
notice by Landlord to Tenant of such default, or if such default is of such a
nature that it cannot be completely remedied within said period of thirty (30)
days if Tenant shall not promptly commence to cure the same and thereafter
remedy the default within sixty (60) days after such notice of default; or
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(e) if any event shall occur or any contingency shall arise whereby
the estate hereby granted or the unexpired balance of the Term would, by
operation of law or otherwise, devolve upon or pass to any person, firm or
corporation other than Tenant except as is expressly permitted under Article 19;
or
(f) if the Premises shall become deserted or abandoned for a period
of sixty (60) consecutive days;
then in any of said events Landlord may, to the extent permitted by law,
immediately or at any time thereafter, and without notice or demand, terminate
this Lease.
14.2 Any monies received by Landlord from or on behalf of Tenant during
the pendency of any proceeding of the types referred to in said Subsections (a)
and (b) of Section 14.1 shall be deemed paid as compensation for the use and
occupation of the premises and the acceptance of any such compensation by
Landlord shall not be deemed an acceptance of rent or a waiver on the part of
Landlord of any rights under Section 14.1.
14.3 In the event Tenant becomes the subject debtor in a case pending
under the Bankruptcy Code (11 U.S.C. Section 10 et. seq.), Landlord's right to
terminate this Lease shall be subject to the rights of the Trustee in bankruptcy
to assume or assign this Lease. To the extent permitted or allowed by law, the
Trustee shall not have the right to assume or assign this Lease until the
Trustee (a) promptly cures all defaults under this Lease, (b) promptly
compensates Landlord for monetary damages incurred as a result of such default,
and (c) provides "adequate assurance of future performance" which shall mean, in
addition to any other requirements of 11 U.S.C. Section 365(b)(3), that all of
the following have been satisfied: (i) in addition to rent payable under the
Lease, the Trustee shall establish with Landlord a security deposit equal to
three (3) months' Fixed Rent; (ii) maintain said security deposit in said amount
whenever it is drawn upon by Landlord; (iii) Trustee must agree that Tenant's
business shall be conducted in a first-class manner; and (iv) the use of the
Premises cannot change. If all the foregoing are not satisfied, Tenant shall be
deemed not to have provided Landlord with adequate assurance of future
performance of this Lease.
ARTICLE 15 RE-ENTRY BY LANDLORD; REMEDIES
15.1 If this Lease and the Term shall terminate as provided in Article 14;
(a) To the extent permitted by law, Landlord and Landlord's agents
may immediately, or at any time after such default or after the date upon which
this Lease shall terminate, re-enter the Premises or any part thereof, without
notice, either by summary proceeding or by any other applicable action or
proceeding, and may repossess the Premises and dispossess Tenant and any other
persons from the Premises and remove any and all of its or their property and
effects from the Premises and in no event shall re-entry be deemed an acceptance
of surrender of this Lease; and
(b) Landlord, at Landlord's option, may relet the whole or any part
or parts of the Premises from time to time, either in the name of Landlord or
otherwise, to such tenant or tenants, for such term or terms ending before, on
or after the Expiration Date, at such rental or rentals and upon such other
conditions, which may include concessions and free rent periods, as Landlord, in
its reasonable discretion, may determine. Landlord shall use commercially
reasonable efforts to mitigate its damages, but Landlord shall in no event be
liable for failure to relet the Premises or any part thereof, or, in the
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event of any such reletting, for failure to collect any rent due upon any such
reletting, and no failure shall operate to relieve Tenant of any liability under
this Lease or otherwise to affect any such liability. Landlord at Landlord's
option, may make such repairs, replacements, alterations, additions,
improvements, decorations and other physical changes in and to the Premises as
Landlord, in its sole, but commercially reasonable, discretion, considers
advisable or necessary in connection with any such reletting or proposed lease.
Tenant shall be liable for the amount of all expenses incurred by Landlord in
connection with such repairs, replacements, alterations additions, improvements,
decorations and other physical changes made by Landlord and the costs of such
reletting, including without limitation, brokerage and reasonable legal
expenses.
15.2 Subject to applicable law, Tenant waives any rights to (a) redeem the
Premises, (b) re-enter or repossess the Premises, or (c) restore the operation
of this Lease, after Tenant shall have been dispossessed by a judgment or by
warrant of any court or judge, or after any re-entry by Landlord, or after any
expiration or termination of this lease and the Term, whether such dispossess,
reentry, expiration or termination shall be by operation of law or pursuant to
the provisions of this Lease. The words "re-enter", "re-entry" and "re-entered"
as used in this Lease shall not be deemed to be restricted to their technical
legal meanings.
15.3 In the event of any breach (and, as to such threatened breach, if a
breach occurred there would be a reasonable likelihood of imminent danger to
person or property) or threatened breach by Tenant or any persons claiming
through or under Tenant of any of the agreements, terms, covenants or conditions
contained in this Lease, Landlord shall be entitled to enjoin such breach or
threatened breach and shall have the right to invoke any right and remedy
allowed at law or in equity or by statute or otherwise as if re-entry, summary
proceedings or other specific remedies were not provided for in this Lease.
15.4 If this Lease and the Term shall terminate as provided in Article 14,
or by or under any summary proceeding or any other action or proceeding, or if
Landlord shall re-enter the Premises as provided in this Article, or by or under
any summary proceeding or any other action or proceeding then, in any of said
events:
(a) Tenant shall pay to Landlord all Fixed Rent and Additional Rent
to the date upon which this Lease and the Term shall have terminated or to the
date of re-entry upon the Premises by Landlord, as the case may be;
(b) Landlord shall be entitled to retain all monies, if any, paid by
Tenant to Landlord, whether as advance rent, security or otherwise, but such
monies shall be credited by Landlord against any Fixed Rent or Additional Rent
due at the time of such termination or re-entry, or at Landlord's option,
against any damages payable by Tenant;
(c) Tenant shall be liable for and shall pay to Landlord any
deficiency between (i) the Fixed Rent or Additional Rent payable hereunder for
the period which otherwise would have constituted the unexpired portion of the
Term (conclusively presuming the Additional Rent to be the same as was payable
for the year immediately preceding such termination or re-entry) and (ii) the
net amount, if any, of rents ("Net Rent") collected under any reletting effected
pursuant to the provisions of Section 15.1(b) for any part of such period
(first deducting from the rents collected under any such reletting all of
Landlord's expenses in connection with the termination of this Lease or
Landlord's re-entry upon the Premises and in connection with such reletting
including but not limited to all repossession costs,
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brokerage commissions, legal expenses, attorneys' fees, alteration costs and
other expenses for preparing the Premises for such reletting);
(d) Any such deficiency shall be paid in monthly installments by
Tenant on the days specified in this Lease for the payment of installments of
Fixed Rent. Landlord shall be entitled to recover from Tenant each monthly
deficiency as the same shall arise and no suit to collect the amount of the
deficiency for any month shall prejudice Landlord's right to collect the
deficiency for any subsequent month by a similar proceeding. Alternatively, suit
or suits for the recovery of such deficiencies may be brought by Landlord from
time to time at its election;
(e) Whether or not Landlord shall have collected any monthly
deficiencies as aforesaid, Landlord shall, at its sole option, be entitled to
recover from Tenant, and Tenant shall pay Landlord, on demand, as and for
liquidated and agreed final damages, a sum equal to the amount by which the
Fixed Rent and Additional Rent payable hereunder for the period which otherwise
would have constituted the unexpired portion of the Term (conclusively presuming
the Additional Rent to be the same as was payable for the year immediately
preceding such termination or re-entry) exceeds then fair and reasonable rental
value of the Premises for the same period, both discounted to present worth at
the rate of ten percent (10%) per annum. If, before presentation of proof of
such liquidated damages to any court, commission or tribunal, the premises, or
any part thereof, shall have been relet by Landlord for the period which
otherwise would have constituted the unexpired portion of the Term, or any part
thereof, the amount of rent upon such reletting, shall be deemed, prima facie,
to be the fair and reasonable rental value for the part or the whole of the
Premises so relet during the term of the reletting, provided said reletting is
on commercially reasonable terms. In no event shall Landlord recover double
damages from Tenant by pursuing alternative recoveries.
(f) In no event (i) shall Tenant be entitled to receive any excess
of such Net Rent over the sums payable by Tenant to Landlord hereunder, or (ii)
shall Tenant be entitled in any suit for the collection of deficiencies or
damages pursuant to this Section to a credit in respect of any Net Rent from a
reletting except to the extent that such Net Rent is actually received by
Landlord prior to the commencement of such suit. If the Premises or any part
thereof should be relet in combination with other space, then proper
apportionment on a square foot area basis shall be made of the rent received
from such reletting and of the expenses of reletting.
15.5 (a) If this Lease be terminated as provided in Article 14 or by or
under any summary proceeding or any other action or proceeding, or if Landlord
shall re-enter the Premises, Tenant covenants and agrees, notwithstanding
anything to the contrary contained in this Lease;
(i) That the Premises shall be, upon such earlier termination
or re-entry, in the same condition as that in which the Tenant has agreed to
surrender them to Landlord at the expiration of the Term hereof;
(ii) That Tenant, on or before the occurrence of any event of
default, shall have performed every covenant contained in this Lease for the
making of any improvement, alteration or betterment to the Premises, or for
restoring or rebuilding any part hereof; and
(iii) That, for the breach of either Subdivision (i) or (ii)
of this Subsection, or both, Landlord shall be entitled immediately, without
notice or other action by Landlord, to recover, and Tenant shall pay the then
cost of performing such covenant, plus interest thereon at the Default Rate for
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the period between the occurrence of any event of default and the time when any
such work or act, the cost of which is computed, should have been performed
under the other provisions of this Lease had such event of default not occurred.
(b) Each and every covenant contained in this Section shall be
deemed separate and independent, and not dependent on other provisions of this
Lease or the use and occupation of the Premises by Tenant, and the performance
of any such covenant shall not be considered to be rent or other payment for the
use of said Premises. It is understood that the consideration for the covenants
in this Section is the making of this Lease, and the damages for failure to
perform the same shall be deemed to be in addition to and separate and
independent of the damages accruing by reason of default in observing any other
covenant contained in this Lease.
15.6 Nothing herein contained shall be construed as limiting or precluding
the recording by Landlord against Tenant of any sums or damages to which, in
addition to the damages particularly provided above, Landlord may lawfully be
entitled by reason of any default hereunder on the part of Tenant.
15.7 Each right and remedy of Landlord provided for in this Lease shall be
cumulative and shall be in addition to every other right and remedy provided for
in this Lease, or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or beginning of the exercise by Landlord of any one
or more of the rights or remedies provided for in this Lease, or now or
hereafter existing at law or in equity or by statute or otherwise, shall not
preclude the simultaneous or later exercise by Landlord of any or all other
rights or remedies provided for in this Lease or now or hereafter existing at
law or in equity by statute or otherwise.
ARTICLE 16 CURING TENANT'S DEFAULT; FEES AND EXPENSES
16.1 If Tenant shall default in the observance or performance of any term,
covenant, or condition of this Lease on Tenant's part to be observed or
performed, Landlord, without thereby waiving such default, may perform the same
for the account and at the expense of Tenant, without notice in a case of
emergency and in any other case if such default continues after thirty (30) days
from the date of the giving by Landlord to Tenant of notice of intention so to
do or such lesser period of notice in the event that a condition might
constitute a default under a Superior Mortgage. Landlord may enter the Premises
at any time to cure any default. Bills for any expense incurred by Landlord in
connection with any such performance by it for the account of Tenant, and bills
for all costs, expenses and disbursements of every kind and nature whatsoever,
including reasonable counsel fees, involved in collecting or endeavoring to
collect Fixed Rent or Additional Rent or other charge or any part thereof or
enforcing or endeavoring to enforce any rights against Tenant, under or in such
cost, expense and disbursement involved in instituting and prosecuting summary
proceedings, as well as bills for any property, material, labor or services
provided, furnished or rendered by Landlord to Tenant and any charges for
services provided under this Lease, may be sent by Landlord to Tenant monthly or
immediately, and shall be due and payable in accordance with the terms of said
bills and if not paid when due, the amounts thereof shall immediately become due
and payable as Additional Rent. Any such bill shall be payable with interest at
the Default Rate from the date Landlord incurs the charge or expense to the date
of payment by Tenant to Landlord. Tenant's obligations under this Section shall
survive the Expiration Date or sooner termination of the Term.
ARTICLE 17 NON-LIABILITY AND INDEMNIFICATION
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17.1 Except as provided in Section 17.3(b) below, neither Landlord nor any
agent or employee of Landlord, shall be liable to Tenant, its employees, agents,
contractors, invitees and licensees, and Tenant shall save Landlord and
Landlord's agents harmless of and from all loss, cost, liability, claim, damage
and expense including reasonable counsel fees, penalties and fines incurred in
connection with or arising from any injury to Tenant or for any damage to, or
loss (by theft or otherwise) of any of Tenant's Property, irrespective of the
cause of such injury, damage or loss (including the acts of negligence of
Tenant), but excluding Landlord's and Landlord's agents and employees,
negligence or willful misconduct. Any Building employees to whom any property
shall be entrusted by or on behalf of Tenant shall be deemed to be acting as
Tenant's agents with respect to such property and neither Landlord nor
Landlord's agents shall be liable for any loss of or damage to any such property
by theft or otherwise.
17.2 Except as provided in Section 17.3(b), neither Landlord, nor any
agent or employee of Landlord, shall be liable for (a) any injury or damage to
any person or property resulting from fire, explosion, falling plaster, steam,
gas, electricity, dust, water or snow, or leaks from any part of the Building or
from the pipes, appliances or plumbing system, or from the roof, street or
subsurface or any other place or by dampness, or from any other cause
whatsoever, (b) any such damage caused by other occupants or persons in the
Building or by construction of any private, public or quasi-public work, or (c)
any latent defect in the Premises or the Building.
17.3 (a) Tenant agrees to indemnify and save Landlord and Landlord's
agents and employees harmless of and from all losses, costs, liabilities,
claims, damages and expenses including reasonable counsel fees, penalties and
fines, incurred in connection with or arising from (a) any default by Tenant in
the observance or performance of any of the terms, covenants or conditions of
this Lease on Tenant's part to be observed or performed, or (b) the use or
occupancy or manner of use or occupancy of the Premises by Tenant or any person
claiming through or under Tenant, or (c) any acts, omissions or negligence of
Tenant or any such person, or the contractors, agents, servants, employees,
visitors or licensees of Tenant or any such person, in or about the Premises or
the Building either prior to, during, or after the expiration of, the Term
including any acts, omissions or negligence in the making or performing of any
improvements. If any action or proceeding shall be brought against Landlord or
Landlord's agents or employees based upon any such claim and if Tenant, upon
notice from Landlord, shall cause such action or proceeding to be defended at
Tenant's expense by counsel reasonably satisfactory to Landlord without any
disclaimer of liability by Tenant in connection with such claim, Tenant shall
not be required to indemnify Landlord and Landlord's agents or employees for
counsel fees in connection with such action or proceeding. The provisions of
this Section 17.3 shall survive the expiration or termination of this Lease.
(b) Landlord agrees to indemnify and save Tenant and Tenant's agents
and employees harmless of and from all losses, cost, liabilities, claims,
damages and expenses including reasonable counsel fees, penalties and fines
incurred in connection with or arising from (i) any default by Landlord in the
observance of performance of any of the terms, covenants or conditions of this
Lease on Landlord's part to observed or performed; or (ii) any acts, omissions
or negligence of Landlord or any other person, or the contractors, agents,
servants or employees of Landlord or any such person in or about the Building
either prior to, during or after the expiration of the Term. If any action or
proceeding shall be brought against Tenant or Tenant's agents or employees based
upon such claim and if Landlord, upon notice from Tenant, shall cause such
action or proceeding to be defended at Landlord's expense by counsel reasonably
satisfactory to Tenant but without any disclaimer of liability by Landlord in
connection with such claim, Landlord shall not be required to indemnify Tenant
or Tenant's agents or
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employees for counsel fees in connection with the proceeding or action. The
provisions of this Section 17.3(b) shall survive the expiration or termination
of this Lease.
ARTICLE 18 SURRENDER
18.1 On the last day of the Term or upon any earlier termination of this
Lease, or upon any re-entry by Landlord upon the Premises, Tenant shall, at its
own expense, quit and surrender the Premises to Landlord, together with all
improvements which have been made upon the Premises (except as otherwise
provided for in this Lease, including but not limited to Article 9 above), in
broom clean, good order, condition and repair except (i) for ordinary wear and
tear; (ii) for damage by fire or other insured casualty and (iii) if, as of the
Commencement Date of this Lease, Tenant discovers that a component of the
Premises is not in good order, condition or repair and provided Tenant gives a
list to Landlord of such components within 180 days after the Commencement Date,
then Tenant will be required only to surrender such components in the condition
in which they were found at the Commencement Date and as they are described in
the list delivered to Landlord. Tenant shall remove from the Premises and the
Building all of all personal property and personal effects of all persons
claiming through or under Tenant and may remove items of Tenant's Property
including the items described on Exhibit J (and enhancements to and
replacements of such items as are identified to Landlord), and shall also remove
at Landlord's request, all vaults at the Premises, and, as set forth in Section
9.1 hereof, together with such other items as Landlord shall require Tenant to
remove, and shall, in each instance, pay the cost of repairing all damage to
the Premises and the Building occasioned by such removal.
18.2 Any Tenant's Property or other personal property which shall remain
in the Premises after the Expiration Date or the date of sooner termination of
this Lease shall be deemed to have been abandoned and either may be retained by
Landlord as its property or may be disposed of in such manner as Landlord may
see fit at Tenant's cost and expense.
18.3 If the Premises are not surrendered at the expiration of the Term,
Tenant shall (i) pay for the use and occupancy of the Premises at a rate equal
to two times the rate of Fixed Rent in effect immediately prior to the
expiration of the Term, on a daily basis, for each day until the date of
surrender of the Premises; and (ii) indemnify Landlord against any and all
damages, costs, expenses, loss or liability resulting from delay by Tenant in so
surrendering the Premises.
18.4 Tenant's obligation under this Article shall survive the Expiration
Date or sooner termination of this Lease.
ARTICLE 19 ASSIGNMENT, MORTGAGING AND SUBLETTING
19.1 (a) Neither this Lease, nor the Term and estate hereby granted, nor
any part hereof or thereof, nor the interest of Tenant in any sublease or the
rentals thereunder, shall be assigned, mortgaged, pledged, encumbered or
otherwise transferred by Tenant, Tenant's legal representatives or successors in
interest by operation of law or otherwise, and neither the Premises, nor any
part thereof, shall be encumbered in any manner by reason of any act or omission
on the part of Tenant or anyone claiming under or through Tenant, or shall be
sublet or be used or occupied or permitted to be used or occupied, or for any
purpose other than as permitted by this Lease, without the prior consent of
Landlord in each case, which consent shall not be unreasonably withheld, delayed
or conditioned, except as expressly otherwise provided in this Article. In the
event that Tenant shall desire to assign this Lease or to sublease all or any
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portion of the Premises, then Tenant shall submit in writing to Landlord the
name of the proposed assignee or subtenant, the nature and character of its
business, the terms and conditions of the proposed assignment or subletting,
information as to the financial responsibility and such other information as
Landlord may require. In the event that Tenant desires to assign this Lease,
then any proposed assignment must require Tenant's assignee to assume Tenant's
obligations from and after the effective date of an assignment. If Tenant shall
give Landlord notice of a desire to assign this Lease, or to sublet the entirety
of the Premises, Landlord shall be entitled to recapture the Premises or cancel
this Lease on 30 days' prior written notice thereof, and this Lease shall come
to an end on the date in such notice specified, with the same force and effect
as is such date were the date herein specified for the expiration hereof, and
the Fixed Rent, and Additional Rent shall be apportioned and adjusted as of the
effective date of such cancellation. Notwithstanding the foregoing, Tenant may
assign its entire interest under this Lease to a "Related Entity" (as defined
below) without the consent of Landlord provided that all of the following
conditions are satisfied: (i) Tenant is not in default of its obligations under
this Lease beyond any applicable grace or notice and cure periods; (ii) Tenant
shall remain fully liable for the obligations of the Tenant under this Lease;
and (iii) Tenant shall give Landlord written notice of at least thirty days
prior to the Effective Date of the proposed assignment. As used in this section,
the term "Related Entity" shall mean an entity which controls, is controlled by,
or is under common control with Tenant.
(b) Any assignment of this Lease, or of the interest of Tenant
hereunder, or sublease as aforesaid, without full compliance with any and all
requirements set forth in this Lease shall be a breach of this Lease and a
default hereunder and shall, at Landlord's option, render any such purported
assignment or subletting null and void and of no force or effect
19.2 If this Lease be assigned, whether or not in violation of the
provisions of this Lease, Landlord may collect rent from the assignee. If the
Premises or any part hereof be sublet or be used or occupied by anybody other
than Tenant, whether or not in violation of this Lease, Landlord may, after
default by Tenant and expiration of Tenant's time to cure such default, collect
rent from the subtenant or occupant. In either event, Landlord may apply the net
amount collected to the rents herein reserved, but no such assignment
subletting, occupancy or collection shall be deemed a waiver of any of the
provision of this Article, or the acceptance of the assignee, subtenant or
occupant as tenant, or a release by Tenant from the further performance by
Tenant of Tenant's obligations under this Lease. The consent of Landlord to an
assignment, mortgaging or subletting pursuant to any provision of this Lease
shall not in any way be considered to relieve Tenant from obtaining the express
consent of Landlord to any other or further assignment, mortgaging or
subletting. Tenant agrees to pay to Landlord reasonable counsel fees incurred by
Landlord in connection with any proposed assignment of Tenant's interest in this
Lease or any proposed subletting of the Premises or any part thereof. Neither
any assignment of Tenant's interest in this Lease nor any subletting, occupancy
or use of the Premises or any part thereof by any person other than Tenant, nor
any collection of rent by Landlord from any person other than Tenant as provided
in this Article, nor any application of any such rent as provided in this
Article, nor any application of any such rent as provided in this Article, shall
under any circumstances, relieve or release Tenant of its obligation fully to
observe and perform the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed.
19.3 To the extent Tenant realizes any profit on any assignment or
sublease of all or any portion of the Premises, then 75 percent of said profit
shall be payable to Landlord. For purposes of this Section "profit" shall refer
to the difference between; (1) all payments made by an assignee or a subtenant
to Tenant as rent or otherwise under or in connection with said assignment or
sublease; and (2) the costs and expenses paid by Tenant in connection with said
assignment or sublease including the annual Fixed
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Rent and Additional Rent payable hereunder with respect to the sublet space and
the reasonable brokerage, legal and alteration expenses, if any, incurred in
connection with said assignment or sublease. Promptly after such assignment or
the commencement of any such sublease Tenant shall deliver to Landlord a
statement of the expenses incurred in connection therewith and payments to
Landlord of Landlord's share of the profit in connection therewith shall be made
promptly after receipt thereof, in the case of an assignment and, in the case of
a sublease, monthly, as Additional Rent hereunder.
19.4 (a) In case of a subletting approved by Landlord, a duly executed and
acknowledged original of the sublease shall be delivered to Landlord, the same
to provide that (i) such sublease is and shall be subject and subordinate to
this Lease and any then present or future modifications thereof; and (ii) in the
event of termination, re-entry or dispossess by Landlord under this Lease,
Landlord may, at its option, take over all of the right, title and interest of
Tenant, as sublessor, under such sublease, and such subtenant shall, at
Landlord's option, attorn to Landlord pursuant to the then executory provisions
of such sublease, except that Landlord shall not (A) be liable for any previous
acts or omissions of Tenant, as sublessor under such sublease; (B) be subject to
any offsets against Landlord or (C) be bound by any previous modification of
such sublease to which Landlord shall not have consented in writing or by any
previous prepayments of more than one month's rent.
(b) In the case of any approved assignment or subletting, Tenant, as
assignor or as sublessor, as the case may be, shall remain liable for the
performance or observance of all of the terms and provisions on Tenant's part to
be performed or observed under this Lease.
19.5 (a) If this Lease is assigned to any party pursuant to the Bankruptcy
Code or similar law, any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid or
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the Bankruptcy Code or similar law. Any and all monies and other consideration
constituting Landlord's property under the preceding sentence not paid or
delivered to Landlord shall be held in trust for the benefit of Landlord and
then be promptly paid or delivered to Landlord.
(b) Any party to which this Lease shall be assigned pursuant to the
provisions of the Bankruptcy Code or similar law shall be deemed, without
further act or deed, to have assumed all of the obligations accruing under this
Lease on and after the date of such assignment. Any such assignee shall, upon
demand, execute and deliver to Landlord an instrument confirming such
assumption.
ARTICLE 20 SUBORDINATION AND ATTORNMENT
20.1 This Lease, and all rights of Tenant hereunder, are and shall be
subject and subordinate in all respect to (a) all future ground leases,
overriding leases and underlying leases and/or grants of term of the Land and/or
the Building or the portion thereof in which the Premises are located in whole
or in part, (b) all mortgages and building loan agreements, including leasehold
mortgages and building loan agreements, which may now or hereafter affect the
Land and/or the Building (collectively, the "Superior Mortgages") whether or not
the Superior Mortgages shall also cover other lands and/or buildings and (c)
each and every advance made or hereafter to be made under the Superior Mortgages
and to all renewals, modifications, replacements substitutions and extensions of
the Superior Mortgages and spreaders and consolidations of the Superior
Mortgages. The provisions of this section shall be self-operative and no further
instrument of subordination shall be required as to any Superior Mortgage filed
subsequent to the effective date hereof but only if the holder of such Superior
Mortgage agrees in writing or the mortgage provides that for so long as Tenant
is not in default of its obligations set forth in this Lease beyond any
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applicable notice and cure period, the holder of such Superior Mortgage will
not, in foreclosing against, or taking possession of the Premises or otherwise
exercising its right under the Superior Mortgage, disturb the Tenant's right of
possession under this Lease. In confirmation of such subordination, Tenant shall
within 10 days after receipt of a request for the same, provided the provisions
of the foregoing sentence are complied with to Tenant's benefit, execute and
deliver at its own cost and expense any instrument, in recordable form if
required, that Landlord or the holder of a Superior Mortgage or any of their
respective successors in interest may request to evidence such subordination.
Landlord shall obtain and deliver to Tenant a non-disturbance agreement from the
holder of the Superior Mortgage encumbering the Land and Building as of the date
hereof in form and substance reasonably satisfactory to Tenant.
20.2 Subject to the provisions of Section 20.1 being complied with to
Tenant's benefit, if, at any time prior to the expiration of the Term, the
holder of a Superior Mortgage shall become the owner of the Building as a result
of foreclosure of its mortgage or conveyance of the Building, or become a
mortgagee in possession of the Land or the Building. Tenant agrees, at the
election and upon demand of any owner of the Land or the Building, or of the
holder of any Superior Mortgage (including a leasehold mortgagee) in possession
of the Land or the Building, to attorn from time to time to any such owner,
holder or lessee upon the then executory terms and conditions of this Lease,
provided that such owner, holder or lessee, as the case may be, shall then be
entitled to possession of the Premises. Such successor in interest to Landlord
shall not be bound by (i) any payment of rent or additional rent for more than
one month in advance, except prepayments in the nature of security for the
performance by Tenant of its obligations under the Lease, or (ii) any
amendment, modification or termination of this Lease made or entered into after
the date of execution of the Superior Mortgage without the consent of the holder
of the Superior Mortgage or such successor in interest whose name is disclosed
to Tenant or (iii) any offsets which may be asserted by the Tenant against
payments of rent as a result of any default by or claims against Landlord
hereunder arising prior to the date such successor takes possession of the
Premises or (iv) any obligation by Landlord as lessor hereunder to perform any
work or grant any concession without the mortgagee's express assumption of such
obligation to perform work or grant such concession. The foregoing provisions of
this Section shall inure to the benefit of any such owner, holder or lessee,
shall be self-operative upon any such demand, and no further instrument shall be
required to give effect to said provisions, although Tenant shall execute such
an instrument upon the request of the holder of a Superior Mortgage, provided
the provisions of Section 20.1 are complied with to Tenant's benefit.
20.3 INTENTIONALLY OMITTED.
20.4 Provided that the Tenant has been provided with notice of the name
and address of any holder of a Superior Mortgage (a "Mortgagee"), no notice from
the Tenant of any default by the Landlord in its obligations shall be valid, and
the Tenant shall not attempt to terminate this Lease, withhold Fixed Rent or
Additional Rent or exercise any other remedy which may arise under law by reason
of any such default, unless the Tenant first gives such notice to any Mortgagees
and provides such Mortgagees with notice of such default, and an opportunity to
cure the same within a period of time that shall be not less than the period
afforded to the Landlord to cure the default under the provisions of this Lease,
provided further that if the default by the Landlord is of such a nature that it
would, if left uncured, give rise to a right of termination by the Tenant of
this Lease, then the Tenant shall, prior to exercising any such termination
right, provide to the Mortgagee a second notice (which second notice shall be
given upon the expiration of the cure period initially applicable to the
default, after taking into account all applicable facts and circumstances)
stating the continuing nature of the default and providing to the Mortgagee an
additional thirty (30) day period within which to cure such default.
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20.5 Any Mortgagee may, at any time, by giving written notice to, and
without any further consent from, the Tenant, subordinate its mortgage to this
Lease, and thereupon the interest of the Tenant under this Lease shall
automatically be deemed to be prior to the lien of such mortgage without regard
to the relative dates of execution, delivery or filing thereof or otherwise.
20.6 Landlord shall endeavor to have each Mortgagee provide in connection
with the application of insurance proceeds received by such Mortgagee, that, so
long as (i) Landlord is not in default of its obligations under the Superior
Mortgage and all financial covenants required by such Mortgagee have been and
are anticipated to continue to be satisfied; (ii) Tenant is not in default of
its obligations under this Lease; and (iii) Tenant will not exercise any right
it may have under the first sentence of Section 12.2 of this Lease by virtue of
the occurrence of such casualty to terminate the Lease such Mortgagee will
disburse such proceeds, in accordance with requirements set forth in the
Superior Mortgage (or other loan documents) for the repair and restoration of
the Building.
ARTICLE 21 ACCESS; CHANGE IN FACILITIES
21.1 Landlord reserves the right, at any time without incurring any
liability to Tenant therefor, to make such changes in or to the Building and the
fixtures and equipment of the Building, as well as in the entrances,
passageways, halls, doors, doorways, corridors, elevators, escalators, stairs,
toilets and other public parts of the Building as it may deem necessary or
desirable, provided any such change does not (x) deprive Tenant of access to the
Premises; (y) materially or unreasonably interfere with the use of the Premises
or the conduct of business therein; nor (z) reduce the usable area of the
Premises in excess of one percent (1%) of the total rentable area thereof so
long as such reduction shall not materially, adversely effect the Tenant's
current use (with an appropriate adjustment in Fixed Rent due to such reduction
in the area of the Premises).
21.2 Tenant shall permit Landlord to install, use and maintain pipes,
ducts and conduits within or through the Premises, or through the walls, columns
and ceilings therein, provided that the installation work is performed at such
times and by such methods as will not reduce the usable space in the Premises or
unreasonably interfere with Tenant's use and occupancy of the Premises, or
damage the appearance thereof.
21.3 Landlord or Landlord's agents shall have the right to enter the
Premises at all times for any of the purposes specified in this Article and (a)
to examine the Premises or for the purpose of performing any obligation of
Landlord or exercising any right or remedy reserved to Landlord in this Lease;
(b) to exhibit the Premises to a prospective purchaser, mortgagee, ground lessor
of the Building, or others and during the last six months of the lease term to
exhibit the Premises to prospective tenants; (c) make such repairs, alterations,
improvements or additions or to perform such maintenance as Landlord may deem
necessary or desirable; (d) to take all materials into and upon the Premises
that may be required in connection with any such repairs, alterations
improvements, additions or maintenance; and (e) to alter, renovate and decorate
the Premises if Tenant shall have removed all or substantially all of Tenant's
Property from the Premises. Notwithstanding the foregoing, except in emergencies
or Tenant's default hereunder, all entries by Landlord under this Section shall
be, after notice to Tenant, at reasonable times and shall be conducted in
accordance with Tenant's customary rules and regulations concerning access to
the Premises including, but not limited to labs, research and administrative
offices located therein and so as not to unduly or unseasonably, interfere with
Tenant's use and occupancy of the Premises.
21.4 The exercise of any right reserved to Landlord in this Article shall
not constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of rent
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(except as specifically provided herein), or relieve Tenant from any of its
obligations under this Lease, or impose any liability upon Landlord or
Landlord's agents, or upon the holder of a Superior Mortgage.
ARTICLE 22 INABILITY TO PERFORM
22.1 This Lease and the obligations of Tenant to pay rent and perform all
of the terms, covenants and conditions on the part of Tenant to be performed
shall in no way be affected, impaired or excused because Landlord, due to the
occurrence of an event of force majeure (as set forth in Article 32 hereof) is
(a) unable to fulfill any of its obligations under this Lease or (b) unable to
supply or delayed in supplying any service expressly or impliedly to be
supplied, or (c) unable to make or delayed in making any repairs, replacements,
additions, alterations or decorations or (d) unable to supply or delayed in
supplying any equipment or fixtures. Landlord shall in each instance exercise
commercially reasonable diligence to effect performance when and as soon as
possible.
ARTICLE 23 PREJUDGMENT REMEDY, REDEMPTION, COUNTERCLAIM
AND JURY TRIAL
23.1 Tenant, for itself and for all persons claiming through or under it,
hereby acknowledges that this Lease constitutes a commercial transaction as such
term is used and defined in Chapter 903 of the Connecticut General Statutes, and
hereby expressly waives any and all rights which are or may be conferred upon
Tenant by said Act to any notice or hearing prior to a prejudgment remedy, and
by any present or future law to redeem the Premises, or to any new trial in any
action or ejection under any provisions of law, after reentry thereupon, or upon
any part thereof, by Landlord, or after any warrant to dispossess or judgment in
ejection. If Landlord shall acquire possession of the Premises by summary
proceedings, or in any other lawful manner without judicial proceedings, it
shall be deemed a reentry within the meaning of that word as used in this Lease.
In the event that Landlord commences any summary proceedings or action for
nonpayment of rent or other charges provided for in this Lease, Tenant shall not
interpose any non-compulsory counterclaim of any nature or description in any
such proceeding or action. Tenant and Landlord both waive a trial by jury of any
or all issues arising in any action or proceeding between the parties hereto or
their successors, under or connected with this Lease, or any of its provisions.
ARTICLE 24 WAIVERS
24.1 The failure of Landlord to insist in any one or more instances upon
the strict performance of any one or more of the arguments, terms, covenants,
conditions or obligations of this Lease, or to exercise any right, remedy or
election herein contained, shall not be construed as a waiver or relinquishment
for the future of the performance of such one or more obligations of this Lease
or of the right to exercise such election, but the same shall continue and
remain in full force and effect with respect to any subsequent breach, act or
omission whether of a similar nature or otherwise. The manner of enforcement or
the failure of Landlord to enforce any of the Rules and Regulations against
Tenant and/or any other tenant in the Building shall not be deemed a waiver of
any such Rules and Regulations.
24.2 The following specific provisions of this Section shall not be deemed
to limit the generality of the foregoing provisions of this Article:
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(a) No agreement to accept a surrender of all or any part of the Premises
shall be valid unless in writing and signed by Landlord. No delivery of keys
shall operate as a termination of this Lease or a surrender of the Premises.
(b) The receipt or acceptance by Landlord of rents with knowledge of
breach by Tenant of any term, covenant or condition of this Lease shall not be
deemed a waiver of such breach.
(c) No payment by Tenant or receipt by Landlord of a lesser amount than
the correct Fixed Rent or Additional Rent shall be deemed to be other than a
payment on account, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment be deemed to effect or evidence an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance or pursue any other remedy
in this Lease or at law provided.
ARTICLE 25 QUIET ENJOYMENT
25.1 If, and so long as Tenant pays the Fixed Rent and Additional Rent and
keeps and performs each and every term. covenant and condition herein contained
on the part and on behalf of Tenant to be kept and performed, Tenant shall
lawfully and quietly hold, occupy and enjoy the Premises during the Term of this
Lease without hinderance or molestation by Landlord, subject to the terms,
covenants, and conditions of this Lease and the Superior Mortgages (provided,
with regard to the Superior Mortgages, Tenant shall have the benefit of the
right of non-disturbances granted herein and of any non-disturbance agreement
delivered to Tenant by any holder of a Superior Mortgage).
ARTICLE 26 ENVIRONMENTAL COMPLIANCE
26.1 Tenant hereby covenants to Landlord that Tenant shall (a) (i) comply
with all Laws (as defined below) applicable to the discharge, generation,
manufacturing, removal, transportation, treatment, storage, disposal and
handling of Hazardous Materials or Wastes (as defined below) as apply to the
activities of the Tenant, its directors, officers, employees, agents,
contractors, subcontractors, licensees, invitees, sublessees, assignees,
successors and assigns at the Property (together with Tenant, the "Tenant
Parties") and, without limiting the generality of the foregoing, obtain and
comply with any and all required discharge permits for the discharge of
laboratory waste, and prior to the expiration or termination of this Lease, use
commercially reasonable efforts to complete the closure of any Hazardous Waste
Storage Area in accordance with all applicable laws, rules and regulations; (ii)
promptly remove any Hazardous Materials or Wastes caused or generated by the
Tenant Parties from the Premises in accordance with all applicable Laws and
orders of governmental authorities having jurisdiction; (iii) pay or cause to be
paid all costs associated with such removal of such Hazardous Materials or
Wastes generated by Tenant or the Tenant Parties including any remediation and
restoration of the Premises; and (iv) indemnify Landlord from and against all
losses, claims and costs arising out of the migration of Hazardous Materials or
Wastes caused or generated by the Tenant Parties from or through the Premises
into or onto or under other portions of the Building or the Property or other
properties; (b) keep the Property free of any lien imposed pursuant to any
applicable Law in connection with the existence of Hazardous Materials or Wastes
in or on the Premises caused or generated by Tenant or the Tenant Parties; (c)
not install or permit to be installed or to exist in the Premises any asbestos,
asbestos-containing materials, urea formaldehyde insulation or any other
chemical or substance which has been determined to be a hazard to health and
environment, the installation, presence, use or existence of which would be in
or cause a violation of any applicable Law; (d) not cause or permit to exist, as
a result of an intentional or unintentional act or omission on the part of
Tenant, any Tenant Parties or any occupant of
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the Premises, a releasing, spilling, leaking, pumping, emitting (other than from
one containment area to another), pouring, discharging, emptying or dumping of
any Hazardous Materials or Wastes onto the Premises, the Building or the Land;
(e) identify on Exhibit C all Hazardous Materials or Wastes currently used by
Tenant and shall notify Landlord of any changes or addition to the Hazardous
Materials or Wastes so used; (f) give all notifications and prepare all reports
required by Laws or any other law with respect to Hazardous Materials or Wastes
caused or generated by the Tenant Parties existing on, released from or emitted
from the Premises (and shall give copies of all such notifications and reports
to Landlord); (g) promptly notify Landlord in writing of any release, spill,
leak, emittance, pouring, discharging, emptying or dumping of Hazardous
Materials or Wastes known to Tenant in or on the Premises; (h) if Landlord has a
reasonable basis of belief that Tenant, the Tenant Pates permitted a release or
spill of Hazardous Materials or Wastes to occur, pay for periodic environmental
monitoring by Landlord as well as subsurface testing paid as Additional Rent;
and (i) promptly notify Landlord in writing of any summons, citation, directive,
notice, letter or other communication, written or oral, from any local, state or
federal governmental agency, or of any claim or threat of claim known to Tenant,
made by any third party relating to the presence or releasing, spilling,
leaking, pumping, emitting, pouring, discharging, emptying or dumping of any
Hazardous Materials or Wastes caused or generated by the Tenant Parties onto the
Premises. In addition to the foregoing, Tenant shall be responsible for and bear
all costs in connection with the treatment and discharge of its laboratory waste
and waste water disposal. Notwithstanding anything to the contrary set forth in
this Lease, Tenant shall not be responsible or liable for any Hazardous
Materials or Waste located at, in, or around the Premises which was (i) released
or generated prior to the Commencement Date (unless released or generated by
Tenant during its early access to and occupancy of the Premises); or (ii) was
released or generated by Landlord, Arch or any other tenant.
Tenant's obligation to close the Hazardous Waste Storage Area, at Tenant's
sole cost and expense, shall survive termination of the Lease. Tenant agrees
that, in connection therewith, and as security for Tenant's obligation to close
any Hazardous Waste Storage Area then, on Landlord's request made prior to or
within 10 business days after than the Expiration Date, (or if the Lease is
sooner terminated, on the termination date, Tenant shall deposit with Landlord a
reasonable sum, not to exceed $50,000, which Landlord shall be entitled to
continue to hold as security for the proper and lawful closure of the Hazardous
Waste Storage Area, the "Closure Obligation"). In lieu of cash, Tenant may
provide Landlord with an unconditional, irrevocable, assignable letter of
credit, (the "Letter of Credit") for all or a portion of such amount. In the
event Tenant furnishes the Letter of Credit, the Letter of Credit shall be on
the following terms and conditions: (i) issued by a commercial bank acceptable
to Landlord, which bank must have an office in New Haven, Connecticut; (ii)
having a term which shall have an expiration date not sooner than the date which
is five (5) years from the Expiration Date (as such date may be extended by
virtue of Tenant exercising its right to extend the Term) or sooner termination
date, however, if the Letter of Credit has an earlier expiration date, it shall
contain a so-called "evergreen clause"; (iii) available for negotiation by
draft(s) at sight accompanied by a statement signed by Landlord stating that the
amount of the draw represents funds due to Landlord (or its successors and
assigns) due to the failure of Tenant to perform its Closure Obligation or (iv)
be otherwise on terms and conditions reasonably satisfactory to Landlord. It is
agreed that in the event Tenant fails to perform its Closure Obligation,
Landlord may draw upon the Letter of Credit or upon the funds held on account as
the Security Deposit to the extent required to perform the same. In the event
that Tenant shall fully and faithfully perform its Closure Obligation (as shall
be evidenced by a sign-off or other definitive communication from applicable
Governmental Authorities, the Letter of Credit and/or funds on deposit with
Landlord shall be returned to Tenant. Tenant further covenants that it will not
assign or encumber or attempt to assign or encumber the Letter of Credit or any
funds on deposit and that neither Landlord nor its successors or
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assigns shall be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance.
26.2 The term "Hazardous Materials or Wastes" shall mean any hazardous or
toxic materials, pollutants, chemicals, or contaminants, including without
limitation asbestos, asbestos-containing materials, urea formaldehyde foam
insulation, polychlorinated biphenyls (PCBS) and petroleum products as defined,
determined or identified as such in any Laws, as hereinafter defined. The term
"Laws" means any federal, state, county, municipal or local laws, rules or
regulations (whether now existing or hereinafter enacted or promulgated)
including, without limitation, the Clean Water Act, 33 U.S.C. ss. 1251 et seq.
(1972), the Clean Air Act, 42 U.S.C. ss. 7401 et seq. (1970), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Subsection 1802, and The Resource Conservation and Recovery Act, 42
U.S.C. Subsection 6901 et seq., any similar state laws, as well as any judicial
or administrative interpretation thereof, including any judicial or
administrative orders or judgments.
26.3 Tenant hereby agrees to defend, indemnify and hold harmless Landlord,
its employees, agents, contractors, subcontractors, licensees, invitees,
successors and assigns from and against any and all claims, losses, damages,
liabilities, judgements, costs and expenses (including, without limitation,
attorneys' fees and costs incurred in the investigation, defense and settlement
of claims or remediation of contamination) incurred by such indemnified parties
as a result of or in connection with the presence at or removal of Hazardous
Materials or Wastes caused or generated by Tenant or any of the Tenant Parties
from the Premises or as a result of or in connection with activities prohibited
under this Article 26. Tenant shall bear, pay and discharge, as and when the
same become due and payable, any and all such judgments or claims for damages,
penalties or otherwise against such indemnified parties, shall hold such
indemnified parties harmless against all claims, losses, damages, liabilities,
costs and expenses, and shall assume the burden and expense of defending all
suits, administrative proceedings, and negotiations of any description with any
and all persons, political subdivisions or government agencies arising out of
any of the occurrences set forth in this Paragraph 26. The provisions of this
Section shall survive termination of this Lease.
ARTICLE 27 BROKERAGE
27.1 Tenant represents that in the negotiation of this Lease it dealt with
no real estate broker or salesman other than Cushman & Wakefield of Connecticut,
Inc. and CB Richard Ellis, Inc. Tenant shall indemnify Landlord and hold
Landlord harmless from any and all losses, damages and expenses arising out of
any inaccuracy or alleged inaccuracy of the above representation, including
court costs and attorneys' fees. Landlord shall have no liability for brokerage
commissions arising out of a sublease by Tenant and Tenant shall and does hereby
indemnify Landlord and hold harmless from any and all liability for brokerage
commissions arising out of any such sublease. Tenant's indemnity shall also
cover all fees, costs and expenses, including attorneys' fees, which Landlord
incurs to defend against any such claim (which Tenant shall pay upon demand).
The provisions of this Article 27 shall survive the expiration or termination of
this Lease.
ARTICLE 28 NOTICES
28.1 All notices, demands or communications given under this Lease shall
be sent to the addresses set forth above (except that from and after the
Commencement Date, Tenant's notice address shall be 350 Knotter Drive, Cheshire,
Connecticut 06410) or at such other addresses as the parties may
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designate by written notice and shall be hand delivered or sent by private
overnight courier service or by prepaid registered or certified mail, return
receipt requested, and shall be deemed given on the date delivered or, if
refused, the date of such refusal.
ARTICLE 29 ESTOPPEL CERTIFICATE, MEMORANDUM; FINANCIALS
29.1 At any time and from time to time within ten (10) days' prior of
delivery of written notice by Landlord or Tenant to the other, Landlord and
Tenant shall execute, acknowledge and deliver to the other a statement in
writing in form satisfactory to Landlord certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), and the dates to which the Fixed Rent and Additional Rent have
been paid in advance, if any, stating whether there are any offsets to the
Tenant's obligation to pay rent thereunder and describing them, if any, and
stating whether or not to the best knowledge of the signer of such certificate
(who shall be a duly authorized officer or signatory of Tenant) Landlord is in
default in performance of any term, covenant or condition contained in this
Lease, and if so, specifying each such default of which the signer may have
knowledge, it being intended that any such statement delivered pursuant hereto
may be relied upon by any prospective purchaser of the Land and the Building or
any part thereof or of the interest of Landlord in any part thereof, by any
mortgagee or prospective mortgagee thereof, by any lessor or prospective lessor
thereof, or by any lessee or prospective lessee thereof, or by any prospective
assignee of any mortgagee thereof.
29.2 At the request of either party. Landlord and Tenant shall promptly
execute, acknowledge and deliver a memorandum with respect to this Lease
sufficient for recording. Such memorandum shall not state the Fixed Rent. Such
memorandum shall not in any circumstances be deemed to change or otherwise
affect any of the terms, covenants and conditions of this Lease.
29.3 Tenant, and each and every assignee, sublessee, successor or assign
of Tenant, shall deliver to Landlord, with reasonable promptness, but in no
event later than ninety (90) days after the close of each fiscal year of such
entity, a copy of such entity's audited year end financial statements and cash
flow analysis, each prepared in accordance with generally accepted accounting
principles, which shall be certified by such entity's chief financial officer as
being true, accurate and complete in all material respects. Upon written request
by Tenant, Landlord shall enter into a commercially reasonable confidentiality
agreement covering any confidential information that is disclosed by Tenant.
ARTICLE 30 PARTIES BOUND
30.1 The terms, covenants and conditions contained in this Lease shall
bind and benefit the successors and assigns of the parties with the same effect
as if mentioned in each instance where a party is named or referred to except
that no violation of the provisions of Article 19 shall operate to vest any
rights in any successor or assignee of Tenant and that the provisions of this
Article shall not be construed as modifying the conditions of limitation
contained in Article 14.
30.2 The obligations of Landlord under this Lease shall no longer be
binding upon Landlord named herein after the sale, assignment or transfer by
Landlord named herein (or upon any subsequent landlord) of its interest in the
Building as owner or lessee, and in the event of such sale, assignment or
transfer, such obligations shall thereafter be binding upon the grantee,
assignee or other transferee of such interest, and any such grantee, assignees
or transferee, by accepting such interest, shall be deemed to have assumed such
obligations. A lease of Landlord's entire interest in the Building shall be
deemed a
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transfer for the purposes of this Section, provided the transferee assumes the
obligations of the Landlord hereunder.
30.3 In connection with the provisions of this Lease and the obligations
and covenants of Landlord herein set forth, Tenant shall look solely to the
estate and property of such Landlord in the Land and Building for the
satisfaction of Tenant's remedies, for the collection of a judgement (or other
Judicial process) requiring the payment of money by Landlord in the event of any
default or breach by Landlord with respect to any of the terms, covenants and
conditions of this Lease to be observed and/or performed by Landlord, and no
other property or assets of such Landlord shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Tenant's remedies.
ARTICLE 31 ENTIRE AGREEMENT; NO OTHER REPRESENTATIONS;
GOVERNING LAW; SEPARABILITY; TIME IS OF THE ESSENCE
31.1 This Lease contains the entire agreement between the parties and all
prior negotiations and agreements are merged in this Lease. This Lease may not
be changed, modified or discharged, in whole or in part, except by a written
instrument executed by the party against whom enforcement of the change,
modification or discharge is sought.
31.2 Tenant expressly acknowledges that neither Landlord nor Landlord's
agents has made or is making, and Tenant, in executing and delivering this
Lease, is not relying upon any warranties, representations, promises or
statements, except to the extent that the same are expressly set forth in this
Lease, and no rights, easements or licenses are or shall be acquired by Tenant
by implication or otherwise unless expressly set forth in this Lease.
31.3 This Lease shall be governed in all respects by the laws of the State
of Connecticut.
31.4 Each covenant and agreement in this Lease shall be construed to be a
separate and independent covenant and agreement and the breach of any such
covenant or agreement by Landlord or Tenant shall not discharge or relieve the
other from its obligation to perform every covenant and agreement of this Lease
to be performed by it. If any term or provision of this Lease or any application
thereof shall be invalid or unenforceable, the remainder of this Lease and any
other application of such term shall not be affected thereby.
31.5 The parties agree that with respect to payments to be made and
obligations to be performed under this Lease, time is of the essence.
ARTICLE 32 FORCE MAJEURE
32.1 Landlord and Tenant shall be excused for the period of any delay in
the performance of any obligations hereunder, when prevented from so doing by
cause or causes beyond Landlord's or Tenant's, as the case may be, reasonable
control which shall include, without limitation, all labor disputes, civil
commotion, war, war-like operations, invasion, rebellion, hostilities, military
or usurped power, sabotage, governmental regulations or controls, fire or other
casualty, inability to obtain any material or services through Acts of God
(force majeure) provided:
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(a) Nothing contained in this Article 32 or elsewhere in this Lease
shall be deemed to excuse or permit any delay in the payment of any sums of
money required hereunder, or any delay in the cure of any default which may be
cured by the payment of money;
(b) Neither Landlord nor the Tenant shall be entitled to rely upon
this Article 32 unless it shall advise the other in writing of the existence of
any force majeure event preventing the performance of any obligation of the
Landlord or the Tenant, as the case may be, within five (5) days after the
commencement of the force majeure; and
(c) No reliance by the Tenant or the Landlord upon this Paragraph 32
shall limit or restrict in any way the Landlord's or Tenant's, as applicable,
right to self-help as provided in this Lease.
(d) Landlord and Tenant shall each use commercially reasonable
efforts to alleviate or curtail any force majeure occurrence.
ARTICLE 33 EXTENSION OPTION
33.1 At the expiration of the original term hereof, if this Lease shall be
in full force and effect and if the Tenant shall not be in default (beyond any
applicable notice and grace period) of any of the terms, conditions, covenants
and provisions hereof, at the time of exercise of the option and as of the
commencement of the applicable extended term, Tenant shall have the right to
extend the term of this Lease for three (3) additional terms of five (5) years,
provided that it gives Landlord at least twelve (12) months' advance written
notice of its exercise of each such extended term option, time being of the
essence. The Fixed Rent (as described in Section 4 of this Lease) to be paid by
Tenant during such extended term shall be payable at the rates and in the
amounts set forth on Exhibit B. The Fixed Rent during such extended term shall
be paid at the times and in the manner provided in the Lease for payment of
Fixed Rent, but in the amount set forth on Exhibit B. Tenant occupancy during
such extended term shall be governed by all of the other terms, conditions,
covenants and provisions of this Lease, including, with respect to payment of
Additional Rent, and except as expressly otherwise provided in this Article, and
as this Lease shall have hereafter been amended, if at all.
ARTICLE 34 SECURITY DEPOSIT
34.1 Tenant shall deposit with Landlord upon execution of this Lease the
sum of Two Hundred Thousand and 00/100 Dollars ($200,000.00), as a deposit
toward the total amount of the Security Deposit to be delivered to Landlord and
which Landlord shall be entitled to continue to hold as security for the
faithful performance and observance by Tenant of the terms, provisions, and
conditions of this Lease. The total amount of the Security Deposit to be
delivered to Landlord shall be determined and deposited with Landlord as of the
Rent Commencement Date. The amount of the Security Deposit is to be a function
of the amount of the Allowance utilized by Tenant. In the event Tenant utilizes
the entirety of the $30.00 per square foot Allowance, the amount of the Security
Deposit shall be One Million and 00/100 Dollars ($1,000,000.00) and if Tenant
does not use any of the Allowance, the amount of the Security Deposit shall be
Two Hundred Thousand and 00/100 Dollars ($200,000.00). If Tenant uses part of
the Allowance, the amount of the Security Deposit will be equal to the product
of (i) the percentage of the $30.00 per square foot Allowance used by Tenant
times (ii) $ 1,000,000.00, but in no event will the amount of the Security
Deposit be less than $200,000.00. (For example, if Tenant uses $20.00 per square
foot, then the Security Deposit shall be equal to (i) $20 / $30 (or 66.67) times
(ii) $1,000,000.00, or $666,666.67). As of the Rent Commencement Date, Landlord
and Tenant shall apply the $200,000.00 deposit toward the total amount of the
Security Deposit and Tenant shall, within 5 Business Days, deliver
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any amount necessary to equal the total amount of the Security Deposit. In lieu
of cash, Tenant may provide Landlord with an unconditional, irrevocable,
assignable letter of credit. (the "Letter of Credit") for all or a portion of
such amount. In the event Tenant furnishes the Letter of Credit, the Letter of
Credit shall be on the following terms and conditions: (i) issued by a
commercial bank acceptable to Landlord, which bank must have an office in New
Haven, Connecticut; (ii) having a term which shall have an expiration date not
sooner than 60 days after the Expiration Date (and, if the Term is extended in
accordance with the terms hereof, an expiration date 60 days after the
expiration of each extended period), however, if the Letter of Credit has an
earlier expiration date, it shall contain a so-called evergreen clause"; (iii)
available for negotiation by draft(s) at sight accompanied by a statement signed
by Landlord stating that the amount of the draw represents funds due to Landlord
(or its successors and assigns) due to the failure of Tenant to pay Fixed Rent
and/or Additional Rent when due or otherwise perform its obligations under this
Lease and (iv) be otherwise on terms and conditions satisfactory to Landlord. It
is agreed that in the event Tenant defaults beyond any applicable notice and
cure period in respect of any of the terms, provisions, covenants, and
conditions of this Lease, including, but not limited to, the payment of Fixed
Rent and Additional Rent, Landlord may draw upon the Letter of Credit or upon
the funds held on account as the Security Deposit to the extent required for the
payment of any Fixed Rent and Additional Rent or any other sum as to which
Tenant is in default or for any sum which Landlord may expend or may be required
to expend by reason of Tenant's default (beyond applicable notice and cure
periods) in respect of any of the terms, provisions, covenants, and conditions
of this Lease, including, but not limited to, any damages or deficiency accrued
before or after summary proceedings or other re-entry by Landlord. In the event
that Tenant shall fully and faithfully comply with all of the terms, provisions,
covenants, and conditions of this Lease, the Letter of Credit and/or funds on
deposit with Landlord shall be returned to Tenant within 60 days after the
Expiration Date (as if may be extended) and after delivery of entire possession
of the Premises to Landlord. Tenant further covenants that it will not assign or
encumber or attempt to assign or encumber the Letter of Credit or any funds on
deposit and that neither Landlord nor its successors or assigns shall be bound
by any such assignment, encumbrance, attempted assignment or attempted
encumbrance. In the event Landlord draws upon the Letter of Credit or on funds
on deposit as the Security Deposit, Tenant shall provide a new irrevocable
letter of credit (on the terms set forth above) or with cash in the amount of
the amount so drawn within seven (7) days after Landlord notifies Tenant of the
draw or withdrawal so that at all times the total amount of Letters of Credit
and/or funds in the account held by Landlord shall be equal to the aggregate
Security Deposit. If the amount of the Security Deposit exceeds, $200,000.00
then, provided that Tenant is not in default, beyond any applicable notice and
grace period, of its obligations under this Lease at any time during each
applicable Lease Year, then commencing on the expiration of the fifth Lease Year
and at the end of each Lease Year thereafter, the amount of the Security Deposit
shall be reduced by $200,000.00, but in no event will the Security Deposit be
reduced below $200,000.00.
34.2 In the event of a sale of the Building or leasing of the Building, or
of the portion of the Building in which the Premises are located, Landlord shall
have the right to transfer the Security Deposit to the vendee or Lessee and
Landlord shall thereupon be released by Tenant from all liability for the return
of the Security Deposit, and Tenant agrees to look solely to the new landlord
for the return of the Security Deposit, and it is agreed that the provisions
hereof shall apply to every transfer or assignment made of the Security Deposit
to a new landlord.
ARTICLE 35 LANDLORD DEFAULT
35.1 In the event Landlord shall (i) file or have filed against it a
petition or case under any section or chapter of the United States Bankruptcy
Code, as amended, or any similar law or statute of the United States or any
state and such petition or case is not discharged within 90 days or (ii) default
in the
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observance or performance of any term, covenant, or condition of this Lease on
Landlord's part to be observed and performed, beyond any applicable notice or
grace period, Tenant may pursue such rights and remedies as are available to it
in law or in equity.
ARTICLE 36 EXPANSION
36.1 Attached hereto as Exhibit H is a preliminary plan to outline
expansion possibilities that the Landlord may make available to Tenant. The
ability of Landlord to make any expansion space available to Tenant is subject
to, among other things (i) Tenant not being in default (beyond applicable notice
or cure period(s) of its obligations under this Lease and (ii) Landlord's
ability to obtain (y) all necessary permits and approvals and (z) financing. If
any expansion option is pursued, the parties shall, in good faith, negotiate an
amendment of the terms of this Lease (including the amount of Fixed Rent and
Additional Rent payable by Tenant) to apply to the expansion area, and Landlord
shall, in good faith, seek the financing necessary to accomplish the expansion.
Plan A shows a possible expansion of the Building in an area located at
the southeast corner of the Building. Tenant shall have the exclusive right,
during the initial Term of the Lease (but not during an extension term of the
Lease Term), to request that Landlord pursue this expansion alternative.
Plan B shows a possible expansion along the western side of the Building.
Tenant shall have the right during the Initial Term (but not during any
extension term) to request that Landlord pursue this expansion alternative.
If the parties are unable to agree on the terms under which Landlord would
provide expansion space to Tenant, then Landlord shall be under no obligation to
pursue an expansion. Furthermore, Landlord's inability to expand the Building
under Plan A or Plan B, shall not constitute a default by Landlord under this
Lease.
The exclusive nature of the Tenant's right, as described above with regard
to Plan A, in this Article 36, means that Landlord will take not action as to
the Land or Building during the initial Term that would preclude Tenant from
seeking the full benefit of the expansion option available to it under Plan A.
The expansion rights set forth above are personal to Tenant and to any
assignee that is a Related Entity (as set forth in Article 19 of this Lease) and
shall automatically terminate and become null, void and of no force and effect
upon the earlier to occur of (i) the expiration or termination of the Lease by
Landlord or pursuant to Law; (ii) the termination or surrender of Tenant's right
of possession to the Premises; (iii) the assignment of this Lease by Tenant;
(iv) the sublease by Tenant of more than 50% of the rentable area of the
Premises, which sublease(s) have expiration dates within six months of the
termination date or expiration date of this Lease; (v) the failure of Tenant to
timely and/or properly exercise the option set forth above.
Subject to the requirements of law, including the obtaining of necessary
permits and approvals from applicable Governmental Authorities, and the
restrictions and conditions set forth in the declarations attached hereto as
Exhibit M, the parties shall negotiate in good faith to arrive at a design,
choice of materials, and specifications for the expansion area that will,
substantially, meet the needs of Tenant.
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ARTICLE 37 RIGHT OF FIRST OFFER FOR THE ARCH PREMISES
37.1 In the event that at any time during the Term of this Lease, as it
may be extended, the Premises shown on Exhibit A as the Arch Chemical Premises
becomes or is to become available for rental and Landlord wishes to lease such
space to any person other than the then current occupant(s) thereof (if any),
and, in the further event, that Tenant is not then in default (beyond any
applicable grace or notice period) of its obligations to Landlord under this
Lease, Landlord shall, before entering into a Lease for all or any portion of
such space, make a written offer to lease the same to Tenant ("Landlord's
Offer") stating the Rent and Additional Rent that Landlord will accept and all
other material terms and conditions on which it would be willing to lease such
space to Tenant. If within twenty (20) business days after receipt of Landlord's
Offer, Tenant agrees in writing to lease such space, Landlord and Tenant will
use commercially reasonable efforts to execute a lease or an amendment to this
Lease for such space within forty-five (45) business days after Landlord's
receipt of Tenant's notice of its election. If such notice of acceptance by
Tenant is not so given, the Landlord shall be free to lease such space to a
third party at an effective rent (which shall include Base Rent, Additional Rent
and other monetary considerations) not substantially more favorable to said
third party (i.e., Landlord shall not offer an effective rent that is less than
95% of the effective rent offered to Tenant) than that set forth in Landlord's
Offer. In any case in which Tenant shall waive said right or if Tenant shall
have failed to timely exercise such right, then Tenant shall, on request of
Landlord, execute and deliver in recordable form an instrument indicating such
waiver or expiration, which instrument shall be conclusive in favor of all
persons relying thereon in good faith. This Right of First Offer is personal to
the named Tenant and to any assignee that is a Related Entity (as set forth in
Article 19 of this Lease) and shall automatically terminate and become null,
void and of no force and effect upon the earlier to occur of (i) the expiration
or termination of this Lease by Landlord or pursuant to Law: (ii) the
termination or surrender of Tenant's right to possession of the Premises; (iii)
the assignment of this Lease by Tenant (to other than a Related Entity); (iv)
the sublease by Tenant of more than 50% of the rentable area of the Premises,
which sublease(s) have expiration dates within six months of the Termination
Date or Expiration Date of this Lease (to other than a Related Entity) ; or (v)
the failure of Tenant to timely and properly exercise its rights under this
provision.
ARTICLE 38 RIGHT OF FIRST OFFER AS TO THE LAND AND BUILDING
38.1 In the event that Landlord shall decide to sell the Land and the
Building, provided that (i) this Lease is in full force and effect and (ii)
Tenant is not then in default (beyond any applicable grace or notice period),
then the Landlord shall negotiate in good faith with the Tenant (to the
exclusion of others), for up to thirty (30) business days from the date of
written notice of Landlord's intent to sell, for the sale of the Land and
Building to Tenant, provided, however, Landlord shall have no liability to the
Tenant, nor shall the Tenant's obligations under this Lease be in any way
affected, in the event that the Landlord and Tenant do not agree on terms for a
sale of the Land and Building to the Tenant, for any reason. In any case in
which Landlord and Tenant do not agree on terms for the sale of the Land and
Building to Tenant, within such thirty (30) business day period, then Tenant
shall, on request of Landlord, execute and deliver in recordable form an
instrument indicating such failure or inability, which instrument shall be
conclusive in favor of all persons relying thereon in good faith. This right of
first offer is personal to the named Tenant and to any assignee that is a
Related Entity (as set forth in Article 19 of this Lease) and shall
automatically terminate and become null, void and of no force and effect upon
the earlier to occur of (i) the expiration or termination of this Lease by
Landlord or pursuant to any Law; (ii) the termination or surrender of Tenant's
right to possession of the Premises; (iii) the assignment of this Lease by
Tenant (to other than a Related Entity); (iv) the sublease by Tenant of more
than 50% of the rentable area of the Premises, which sublease(s) shall have
expiration dates within six months of the
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Expiration Date of this Lease (to other than a Related Entity); or (v) the
failure of Tenant to timely and properly exercise its rights under this
provisions.
ARTICLE 39 TENANT'S CONTRACTORS AND SERVICE PROVIDERS
39.1 Tenant may, in the exercise of its commercially reasonable judgment,
enter into contracts with service providers. For example, Tenant may enter into
contracts with a caterer to service the cafeteria located within the Premises, a
security firm and/or a janitorial firm to provide services to the Premises.
Tenant shall, from time to time, give notice to Landlord of the name and address
of the contractors or the service providers and such other information as
Landlord may reasonably request. Landlord and Tenant agree that in the event
Landlord elects to retain a security firm to provide security to the common
areas of the Building, that Landlord and Tenant shall cooperate and coordinate
in the delivery of security services to the common areas of the Building and to
the Premises.
(Signature page to follow).
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as
of the day and year first above written.
Signed, Sealed, and Delivered LANDLORD:
in the Presence of:
WE KNOTTER, L.L.C.
________________________ By: Winstanley Enterprises, LLC
Its Manager
________________________ By: _________________________
Its
TENANT:
ALEXION PHARMACEUTICALS, INC.
________________________
By: ____________________________
________________________ Its
<PAGE>
EXHIBIT A
[Floor Plan Omitted]
<PAGE>
SCHEME AA
350 Knotter Road, Cheshire, CT
AREA SUMMARY
Date: December 15, 1999
Project No.: 99591
==========================================
SUMMARY:
- ------------------------------------------
Rentable Area 133,939
- ------------------------------------------
Common Area 12,900
- ------------------------------------------
Usable Area 121,039
- ------------------------------------------
R/U Ratio 1.107
==========================================
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SUMMARY: USF RSF
Tenants USFxR/U
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Arch Chemical 47,036 52,049
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Alexion 74,003 81,890
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TOTAL 121,039 133,939
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<PAGE>
EXHIBIT B
ANNUAL RENT SCHEDULE
Annual Rent Schedule:
1. For the first 4 months of the Term, no Fixed or Additional Rent shall be
payable (other than utilities as may be payable under Article 11).
2. For the fifth and sixth months of the Term, no Fixed Rent will be payable,
but Tenant shall pay its Pro Rata Percentage of Real Estate Taxes and
Operating Expenses. Utility expenses shall be payable in accordance with
the provisions of Article 11.
3. For the remainder of the initial Term and, for each Extended Term, if
exercised, Fixed Rent will be payable at the following amounts for the
applicable periods.
<TABLE>
<CAPTION>
Annual Rate Annual Fixed Monthly Fixed
Period Per Square Foot Rent Rent
- ------ --------------- ---- ----
<S> <C> <C> <C>
Months 7-24 $11.75 $962,207.50 $80,183.96
Months 25-60 $12.50 $1,023,625.00 $85,302.08
Months 61-96 $13.25 $1,085,042.50 $90,420.21
Months 97 - Scheduled
Expiration Date $14.00 $1,146,460.00 $95,538.33
First Extended Term
The greater of (i) $15.00 or (ii) the (to be determined) (to be determined)
fair market rental value
(as determined in accordance
with the provisions set
forth below)
Second Extended Term
The greater of (i) $16.00 or (ii) the (to be determined) (to be determined)
fair market rental value
(as determined in accordance
with the provisions set
forth below)
Third Extended Term
The greater of (i) $19.00 or (ii) the (to be determined) (to be determined)
fair market rental value
(as determined in accordance
with the provisions set
forth below)
</TABLE>
To the extent Tenant utilizes all or any portion of the Allowance, then
the Fixed Rent amounts set forth above for the initial Term shall be increased
to include the amortized Allowance amount (including interest) and Landlord and
Tenant will execute an amendment to this Lease to reflect the increased Fixed
Rent payable by Tenant.
2
<PAGE>
Tenant's Pro-Rata Percentage is 61.14% (calculated on the basis of the
rentable square footage of the Premises at 81,890 square feet and the total
rentable area of the Building of 133,939 square feet).
The Term Fair Market Rental Value shall mean the fair market rental of
similar buildings, housing bio-technical or bio-chemical research uses, of
similar age, size and location as the Premises within the New Haven County area
(but without regard to the value of Tenant's Property). If Landlord and Tenant
are unable to agree on such Fair Market Rental Value they shall each choose an
MAI appraiser having at least 10 years experience in appraising such similar
buildings. If the two appraisers cannot agree on a Fair Market Rental, they
shall together choose a third similarly qualified appraiser, whose appraisal of
the Fair Market Rental shall be final and binding upon Landlord and Tenant and
may be entered by either party as a final judgement in any court of competent
jurisdiction. Landlord and Tenant shall each bear the cost of their chosen
appraiser and shall share equally the cost of any third appraiser chosen. The
Fixed Rent during each such extended term shall be paid at the times and in the
manner provided in the Lease for the payment of Fixed Rent, but in an amount as
calculated as provided in this Exhibit.
3
<PAGE>
EXHIBIT C
Alexion Pharmaceuticals, Inc. Chemical Inventory
(Subject to Change)
A
Amyl Acetate
Accuclot
Albmumin Human Essentially Fatty Acid Free
2-Aminoethylisothiouronium Bromide Hydrobromide
2-4-Dinitrophenylhydrazine
2-Chloroethanol
2-Mercaptoethanol Electrophoresis Reagent
2-Mercaptoethylamine Hydrochloride
2-mercaptoethanol molecualr biology reagent
A-Naphthyl Acetate
3-Isobutyl-1-Methylxanthine
5,5' dithio-bis(2-nitrobenzoic acid),dtnb
5-Cholomethylfluorescein Diacetate
5-sulfosalicylic acid dihyrdrate
7-amino-4-chloromethylcoumarin (cell tracker Blue CMAC)
8-chloromethyl-4,4-difluoro-1,3,5,7-tetramethyl-4-bora-3a, 4a-diaza-s-indacene
8-azaguanine(50X) Hybri-MAx gamma-irradiated
ABC Dry chemical
Acetic Acid, Glacial
acetonitrile
Acetonitrile Ace reagent
Acrylamide/Bis-Acrylamide 19 : 1 ratio
Acrylamide
actinomycin d from from streptomyces species
adenosine 5'-triphosphate disodium
a-galactosidase from escherichia coli
agarose conjugated anti-phosphotyrosine (monoclonal lgG2bk), mouse
alchohol, usp
aluminum ammonium sulfate dodecahydrate
americleasr tissue-clearing solvent
aminopterin, (50x) hybri-max gamma-irradiated
ammonium acetate, anhydrous acs reagent
ammonium chloride
ammonium persulfate
ammonium bromide, 99+%, a.c.s. reagent
ammonium sulfate grade I
apo-transferrin human
quidel assay kit - a006
ammonium sulfamate
amorphous sodium/calcium borosilicate glass
ampicillin sodium crystalline
antibody sensitized she ep erythrocytes
Page 1 of 13
<PAGE>
A (cont')
anti chicken egg albumin (ovalbumin) developed in rabbit delipidized, whole
serum
antifoam a emulsion
anti-human fyn (p59 fyn) protien (whole serum), rabbit
anti-human 1 ck kinase (ct), rabbit
anti-mouse lgg (fc specific) developed in goat affinity isolated antigen
specific
antibody absorbed with human lgg
anti-phosphotyrosine (monoclonal lgG2bk), mouse
anti-rat lgg (whole molecule) developed in rabbit lgg
aptt-fsl reagent
aprotinin from bovine lung
anti-rabbit lgg-agaroso (whole molecule) developed in goat solid phase second
antibody
autoradiography enhancer
B
BCA
barbital sodium--dea schedule IV item
barium sulfate
benzamidine hydrochloride hydrate
b-galactosidase grade VIII from escherichia coli
b-glucuronidase from mollusk type h-2
blue dextran mol.wt.2,000,O0O
b-nicotinamide adenine di nucleotide phosphate reduced formtrasodium
boric acid acs reagent
boric acid sigma grade
boric acid molecular biology reagent
5-bromo-2'-deoxyuridine sigma grade
n-butane
n-butyric acid, sodium
F
Cacodylic acid sodium cryst
cacodylic acid, sodium salt hydrate 98%
calcium chloride anhydrus
carbenicillin disodium
carbon-14
carboxy-sulfrom bonded silica gel
catechol crystalline
Page 2 of 13
<PAGE>
C (cont')
celestine blue
cellufine GCL-25
cell tracker orange
cellufine GCL-90
cesium chloride molecualr biology reagent
chloramphenicol cyrstalline
chloroform
chloroform ACS grade
chloroform molecular biology reagent
chloroquine disphosate crystalline
cholesterol cell culture tested
chromium-51
coagulation control level I
coagulation control level II
coagulation control level III
cobalt(II) bromide, 99%
cobalt chloride hexahydrate acs reagent
cobalt(II) bromide, 99%
collagenase p
collagenase type v
colloidal gold and colloidal silver labeled proteins, enzymes & ligand
complement component C1Q from human serum
complement component C1Q deficient serum from human plasma lyophilized
complement factor B deficient serum human
complement C2 deficient serum human
complement serum, standard human frozen
complement C5 deficient serum human
complement C5A human, recombinant
complement c8 deficient serum human
conanavalin a-sepharose 4b
concanavalin a type iv
copper(II) sulfate pentahydrate, 99.999%
cretine phosphokinase type I from rabbit muscle
gram crystal violet solution
cupric chloride hydrate
cupric sulfate pentahydrate acs reagent
cycloheximide from streptomyces griseus
crystal ponceau 6R
cytidine, 99%
Page 3 of 13
<PAGE>
D
deae-sephacel anion exchanger
dehydrated alcohol usp
deoxyribonuclease I type II-s from bovine pancreas
deoxycytidine-5'-Triphosphate, [alpha-32P]
deoxycholic acid sodium
dextran mol. wt. 500,000
dextrose, anyhdrous
dextrin type i
dcomts
disodium phosphate
diethyl pyrocarbonate
diluent kit for pkh26-gl or pkh95
dimethyl pimelmidate dihydrochloride
dimethyl sulfoxide acs regent
n,n dimethylformamide acs reagent
dl-dithiottreitol electrophoresis reagent
dithiothreitol (DTT)
5,5-dithio-bis (2-nitrobenzoic acid)
dot-e 7891
E
ecl western blotting detec.reagents (contains 2X250ml) formula:N/A
ecolume
embedding medium, infiltration medium
enolase from bakers yeast
endotheial cell growth supplement from bovine pituitary glands
en3hance(tm) spray
enterokinase from porcine intestine
environmentally hazardous substances, colid, n.o.s., cobalt (II) bromide
eosin
(-)-epinephrine (+)-bitartrate
ethidium bromide
enhance spray for surface autoradiography
ethanol
ether, 99.9%, HPLC Grade, Inhibitor-free
ethyl alcohol 200 proof usp
ethidium bromide tablets 100mg per tablet molecular biology reagent
ethylenediaminetetraacetic acid disodium dihydrate
ethylenediaminetetraacetic acid tetrasodium
ethyl alcohol 200 proof usp
ethylene glycol monomethyl ether
evans blue
Page 4 of 13
<PAGE>
F
fixative
"44" flux cored solder
factor IX deficient plasma
fast green fcf
fast red violet lb salt
ferrous sulfate heptahydrate 99+%
fluorescein
folin & ciocalteu's phenol reagent
formaldeyde
formalin solution, neutral buffered
formamide
forskolin from coleus forskohl II
G
geneticin disulfate
glutaraldehyde grade I
glutaraldehyde grade II
glutaric dialdehyde, 50wt, % solution in water
glutathione oxidized form free acid sigmaultra
glycerol acs reagent
glycerol, molecular biology reagent
glyoxal, 40wt. %solution in water
goat anti-human igg (fc specific) agarose, affinity isolated anitbody
goat anti-human igm (mu chain specific) isolated antibody, antibody absorbed
with mouse and rat igg
guanidine thiocyanate
guanidine thiocyante molecular biology
H
harris hematoxylin
l-cysteine hydrochloride anhydrous
hat media supplement (50x) hybri-max gamma irradiated
hazorb-universal
hematoxylin
heptanoic acid
heparin sodium cell culture tested
heparin sodium grade I-A from porcine intestinal mucosa
ketamine hydrochloride
hexadecyltrimethylammonium bromide
hexadecyltrimethylammonium bromide flukabrand
Page 5 of 13
<PAGE>
H (cont')
hexadimethrine bromide
hexanes
histamine DI-hcl
hoechst 33258 (bisbenzimide)
human serum gamma-globulin free
hydrochloric acid
hydrochloric acid solution 1.on
hydrogen-3
hydrogen peroxide 3% (W/W) solution
hydrogen peroxide 30% (W/W) solution
hydroxylamine hacl grade I
hygromycin B
ethanolamine free base
hygromycin B hydrochloride from streptomyces hygroscopicus cell culture tested
I
iminodiacetic acid-epoxy activated sepharose 6B fast flow
iminodiacetic acid free acid
imidazole apporx. 99%
injection solution
indomethcin crystalline
insulin chain A. oxidized from bovine insulin ammonium
insulin chain A. oxidized from bovine insulin free acid
insulin from bovine pancreas
insulin-transferrin sodium selenite media supplement gamma-irradiated cell
culture tested\
invertase grade VII
invitrogen
iodine-125
iodoacetamjide crystalline
iodo (1-14c) acetamide / monoiodacetamide
isobutane
isopropanol molecular biology reagent
isopropyl b-d-thiagalactopyranoside
isopropyl alcohol
isopropyl alcohol and water
K
kanamycin monosulfate from streptomyces
Page 6 of 13
<PAGE>
L
l-isokeucine
lactic dehydrogenase kit
lauryl sulfate sodium
lectin from bandieraea simplicifolia bs-l isolectin B4
lectin from canavalia ensiformis typeiv-s gamma - irradiated
lectin from canavalia ensiformis typeiv-s sterile filtered cell culture tested
lectin from phaseolus vulgaris leucoagglutinin pha-I
lectin from phaseolus vulgaris leucoagglutinin pha-I cell culture tested
lectin from phytolacca
lectin from phytolacca americana sterile filtered
leupeptin hemisulfate from microbial source
l-leucine sigma grade
linoleic acid free acid approx. 99%
lipopolysaccharide chromatographically purified from salmonella abortus equi
phenolic extract
lipipolysaccharide from E.coli 0111:84 cell culture tested
lipopolysaccharide from escherichia coli serotype 0127:B8 phenol extract
lithium acetate dihydrate
lithium chloride anhydrous commercial grade
lithium sulfate
l-tryptophan sigam grade
l-lysine monohydrochloride, 99+%
lysozyme egg white for sds gel electrophoresis
lysozyme grade I from chicken egg white
M
magnesium chloride, 6-hydrate, crystal
majestic staunless stell protective polish (aerosol)
manganese chloride tetrahydrate
menadione sodium bosulfate cell culture tested
mallinckrodt
matrex cellufine sulfate
magnesium sulfate, 7-hydrate
matrex cellufine GCL-25
tmb substratre soluition
maleic anhydride
martius yellow sodium monohydrate
2-mercaptoethanol cell culture tested
2-mercaptoethanol
tmb substrate solution
methanol absolute
Page 7 of 13
<PAGE>
methanol spectrophotometric grade
methyl isobutyl ketone
methyl sulfoxide, anyhydrous, 99+%
methylene blue trihydrate
2-methylnaphthalene (BETA)
N,N-Methylene-Bix-Acrylamide
mineral oil light white oil
mineral spirits regular
mitomycin c from streptomyces caespitosus
molybdic acid sodium dihydrate
mops free acid
monoclonal anti-alpha-smooth muscle actin, clone 1A4
myelin basic protein from bovine brain
mycophenolic acid from penicillium brevi-compactum
N
2-naphthalenesulfonic acid, sodium salt, tech., 90%
naphthol as-bi butyrate
naphthol as-d chloroacetate
nnaphthol as phospate sodium
naphthol as-mx phosphate free acid
naphthol blue black
naphthol green b.1% in 1% acetic acid
neomycin sulfate
n-1-naphthylethylenediamine di hcl culk
na-p-tosyl-l-lysine chloromethyl ketone hydrochloride
n-butanol
neuraminidase type x from clostridium perfringes
neuraminidase from clostridium perfringes aseptically filled
neutral red cell culture tested
n-heptane
nickel chloride hexahydrate
nitrate reductase (nad(p)h) from aspergillus species
nitric acid, fuming, 90%
nitro blue tetrazolium 10mg tablets
n-lauroylsarcosine free acid
n-lauroylsarcosine sodium
nbt(nitrotetrazolium blue chloride)
n,n dimethylformaamide
n-lauroylsarcosine sodium
n-octyl b-d-glucopyranoside
n-tosyl-l-phenylanalnine chlromethyl ketone
nonidet p-40
nitro blue tetrazollum grade III crystalline
nutridoma sp
Page 8 of 13
<PAGE>
O
o-dianisidine dihydrochloride 10 mg tablets
o-dianisidine dihydrochloride
oleic acid free acid approx. 99%
orange G sodium
owren's buffer
oxalic acid
P
potassium sulfate acs reagent granular
palmitic acid free acid sigma grade
pararosaniline chloride
pararosaniline base
penicillin-g sodium
penicillin-streptomycin solution
phenylmethylsulfonyl fluoride
polyvinylpyrrolidone molecular biology reagent
polyethyleneimine bonded silica gel
o-phenylenediamine tablets
o-phenylenediamine dihydrochloride
o-phenylenediamine free base
povidone solution, u.s.p.
paraformaldehyde
pentanesulfonate, sodium salt
pepstatin A
periodic acid (hydrate)
phenol/chloroform
phenol molecfular biology reagent
phenylhydrazine hydrochloride
p-phenylenediamine free base
phenylhydrazine hydrochloride
phorbol 12-myristate 13-acetate
phosphate-citrate buffer with sodium perborate capsules
phosphatase alkaline type XXIV from human placenta
phosphoric acid
phosphoric acid 85% certified
phosphorus-32
phosphotungstic acid free acid cyrstalline
pkh26 linker for red fluorescent cell labeling
pkh26 red fluorescent cell linker kit for general membrane labeling
poly(ethylene glycol), average m.w. 2000
poly-l-lysine hydrobromide mol wt greater than 300000
poly-l-lysine hydrobromide mol wt 70000-150000
Page 9 of 13
<PAGE>
P (cont')
polyethlenimine, high molecular weight, 50wt.% solution in water
ponceau s solution 0.1% ponceau s (m/v)
ponceau s solution, 2% ponceau s (w/v)
ponceau S sodium practical grade
potassium chloride
potassium ferricyanide acs reagent
potassium ferrocyanide trihydrate acs reagent
protein g-sepharose 4 fast flow
potassium phosphate, dibasic
potassium phosphate, monobasic
promega
pronectin f
propane
propidium iodine
prostaglandin e1
protein a sepharose 4 fast flow
proteinase k from tritrachium album molecular biolgy reagent
R
rat igg technical grade from serum
reagent kit for sequencing w/sequenase(R) and 7 deaza-dgtp
restriction endoclease dsa i
restriction endoclease swa i
ribonuclease t1 from aspergillus drze, lypholized
ribonuclease a type iii-a from bovine pancreas
ribonuclease A typei-as from bovine pancreas
rifampicin cyrstalline
roccal (r) ii-10%
rpmi-1640 medium with 1-glutamine w/o phenol red or sodium bicarbonate
rpn 2106
rpn226
S
s-(2-aminoethyl) isothiouronium bromide hydrobromide, 99%
sera. complement human
sera human frozen liquid
sigmacote
sigma enzyme control 2-e
Page 10 of 13
<PAGE>
S (cont')
silane coated microscopes
silicone rubber compound
silica
sliver stain plus kit
silver nitrate
silver nitrate, 99.998%
silver nitrate cyrstalline
silver stain "daiichi"
silver, wire, 0.1 mm diam., 99.9%
2d silver stain "daiichi" II
sodium acetate molecular biology reagent
sodium actate trihydrate acs reagent
sodium azide
sodium borate decahydrate acs reagent
sodium cyanoborohydride
sodium carbonate anydrous acs reagent
soidum chloride sigma grade
sodium chloride
soidum chloride sigma grade
sodium fluoride crystalline
sodium hydroxide pellets acs reagent
sodium iodate
sodium iodine anyhydrous
sodium m-periodate acs reagent
sodium nitrate
sodium nitrite crystalline
sodium nitroprusside dihydrate
sodium orthovanadate
sodium phosphate dibasic, anydrous acs
sodium phosphate dibasic heptahydrate acs reagent
sodium phosphate, dibasic, 12-hydrate
sodium pyrophosphate decahydrate acs reagent
sodium sulfute anhydrous
sodium tetrathionate, dihydrate
sodium thiosulfate pentahydrate
sodium thiocyanate
streptomycin sulfate
sulfanilmaide
sulfo-nhs-biotin
sulphur-35
s/p brand xylene
staphylococcal enterotoxin b from staphylococcus aureus
Page 11 of 13
<PAGE>
T
taurine synthetic
tetracycline hydrochloride cyrstalline
tetramethylammonium chloride, 97%
2,6,10,14-tetramwthylpentadaecane
3,3',5,5'-tetramethylbenzidine free base
theophyilline crystalline anhydrous
thiamine hydrochloride
thrombin from human plasma
thrombin from human plasma
thymide cell culture tested
thymidine, [methyl-3H]
thymol crystalline
toluene
(2S,3S)-trans-epoxysuccinyl-l-leucylamido-3-methylbutane
apo-transferrin human
tributyl phosphate, 99+%
trichloroacetic acid crystalline
triethlyamine
triethanolamine free base
trifluoracetic acid
trifluoracetic acid protein sequencing
2,3,5-triphenyltetrazolium chloride
trypsin
trypsin inhibitor type II-s
trypsin1:250 from porcine pancreas gamma-irradiated cell culture tested
tungstic acid sodium dihydrate
1,1,2-trichloro-1,2,2-trifluoroethane
triton X-114
triton X-114, reduced
tris hydrochloride
trizma base reagent grade
trizma hydrochloride reagent grade
trizma base reagent grade
trizma hydrochloride reagent grade
trizma hydrochloride sigmaultra
tunicamyucin from a streptomyces species
tween 80
U
urea
urea cell culture tested
urease type iii from jack beans
Page 12 of 13
<PAGE>
V
vesphene II se
W
wright giemsa fucillo
X
xanthine sodium cell culture tested
xiazine hydrochloride
xylene
xylene cyanole ff, dye content: approx 75%
z
zinc chloride
zinc chloride, 99.999%
zinc sulfate heptahydrate
zymosan a from saccharomyces cerevisiae
Page 13 of 13
<PAGE>
EXHIBIT D
WORK LETTER
This Exhibit is attached to and made a part of the Lease and is entered
into as of the __ day of ________________, 2000 by and between WE KNOTTER,
L.L.C., a Delaware limited liability company ("Landlord") and ALEXION
PHARMACEUTICALS, INC. ("Tenant") for space in the Building located at 350
Knotter Drive, Cheshire, Connecticut.
1. Alterations and Allowance.
A. Tenant, following the delivery of the Premises by Landlord and the
full and final execution and delivery of this Lease and all prepaid
rental and security deposits required hereunder, shall have the
right to perform alterations and improvements in the Premises (the
"Initial Alterations"). Notwithstanding the foregoing, Tenant and
its contractors shall not have the right to perform Initial
Alterations in the Premises unless and until Tenant has complied
with all of the terms and conditions of Article 9 of this Lease,
including, without limitation, approval by Landlord of the final
plans for the Initial Alterations. Tenant shall be responsible for
obtaining all necessary permits and approvals in connection with the
performance and completion of the Initial Alterations and for all
elements of the design of Tenant's plans (including, without
limitation, compliance with law, functionality of design, the
structural integrity of the design, the configuration of the
Premises and the placement of Tenant's furniture, appliances and
equipment), and Landlord's approval of Tenant's plans shall in no
event relieve Tenant of the responsibility for such design. In the
event Tenant does not use Landlord's electrical, mechanical and
roofing consultants then, Landlord's engineer and/contractor, at
Tenant's expense, shall review and approve the plans and
specifications as well as the work performed by Tenant's consultants
and contractors.
B. Provided Tenant is not in default, Landlord agrees to contribute an
amount not to exceed the product of $30 times the rentable square
footage of the Premises, or $2,456,700.00, (such amount,
"Allowance") toward the cost of performing the Initial Alterations
in preparation of Tenant's occupancy of the Premises. Tenant is not
obligated to accept or utilize the Allowance. The Allowance shall be
repaid with interest at the rate of 11% per annum at the times and
in the manner set forth in the Lease. The Allowance may only be used
for the cost of preparing design and construction documents and
mechanical and electrical plans for the Initial Alterations and for
hard costs in connection with the Initial Alterations. The
Allowance, less a 7.5% retainage (which retainage shall be payable
as part of the final draw), shall be paid to Tenant or, at
Landlord's option, to the order of the general contractor that
performs the Initial Alterations, in periodic disbursements within
thirty (30) days after receipt of the following documentation: (i)
an application for payment and sworn statement of contractor
substantially in the form if AIA Document G-702 covering all work
for which disbursement is to be made to a date specified therein;
(ii) a certification from an AIA architect substantially in the form
of the Architect's Certificate for Payment which is located on AIA
Document G-702, Application and Certificate of Payment; (iii)
Contractor's, subcontractor's and material supplier's waivers and/or
subordinations of liens and certificates of payment which shall
cover all Initial Alterations for which disbursement is being
requested and all other statements and forms required for compliance
with the mechanics' lien laws of the State of Connecticut, together
with all such invoices, contracts, or other supporting data as
Landlord or Landlord's Mortgagee may reasonably require; (iv) a cost
breakdown for each trade or subcontractor performing the Initial
Alterations; (v) plans and specifications for the Initial
Alterations, together with a certificate from an AIA
<PAGE>
architect that such plans and specifications comply in all material
respects with all laws affecting the Building, Property and
Premises; (vi) copies of all construction contracts for the Initial
Alterations, together with copies of all change orders, if any; and
(vii) a request to disburse from Tenant containing an approval by
Tenant of the work done and a good faith estimate of the cost to
complete the Initial Alterations. Upon completion of the Initial
Alterations, and prior to final disbursement of the Allowance,
Tenant shall furnish Landlord with: (1) general contractor and
architect's completion affidavits, (2) full and final waivers and/or
subordinations of lien and certificates of full payment, (3)
receipted bills covering all labor and materials expended and used,
(4) as-built plans of the Initial Alterations, (5) the certification
of Tenant and its architect that the Initial Alterations have been
installed in a good and workmanlike manner in accordance with the
approved plans, and in accordance with applicable laws, codes and
ordinances, and (6) a copy of the permanent or temporary certificate
of occupancy for the Premises. In no event shall Landlord be
required to disburse the Allowance more than one time per month. If
the estimated cost of the Initial Alterations exceed the Allowance,
Tenant shall be entitled to the Allowance in accordance with the
terms hereof, but each individual disbursement of the Allowance
shall be disbursed in the proportion that the Allowance bears to the
total cost for the Initial Alterations, less the 7.5% retainage
referenced above. Notwithstanding anything herein to the contrary,
Landlord shall not be obligated to disburse any portion of the
Allowance during the continuance of an uncured default under the
Lease, and Landlord's obligation to disburse shall only resume when
and if such default is cured.
C. In no event shall the Allowance be used for the purchase of moveable
equipment, furniture or other items of personal property of Tenant.
In the event Tenant does not properly submit a request for payment
of the entire Allowance to Landlord in accordance with the
provisions of this Exhibit D on or before the expiration of the 6
month of the Lease Term, any unused amount shall accrue to the sole
benefit of Landlord, it being understood that Tenant shall not be
entitled to any credit, abatement or other concession in connection
therewith. Tenant shall be responsible for all applicable state
sales or use taxes, if any, payable in connection with the Initial
Alterations and/or Allowance.
D. Except with respect to the Substantial Completion of Landlord's
Work, to be performed pursuant to Exhibit G, Tenant agrees to accept
the Premises in its "as-is" condition and configuration, it being
agreed that Landlord shall not be required to perform any work other
than Landlord's Work or, except as provided above with respect to
the Allowance, incur any costs in connection with the construction
or demolition of any improvements in the Premises.
E. This Exhibit shall not be deemed applicable to any additional space
added to the original Premises at any time or from time to time,
whether by any options under the Lease or otherwise, or to any
portion of the original Premises or any additions to the Premises in
the event of a renewal or extension of the original Term of this
Lease, whether by any options under the Lease or otherwise, unless
expressly so provided in the Lease or any amendment or supplement to
the Lease.
2
<PAGE>
WITNESS/ATTEST: LANDLORD:
WE KNOTTER, L.L.C.
Delaware limited liability company
By: Winstanley Enterprises, LLC
its general partner
______________________________ By: ______________________________
Name (print):_________________ Name: ______________________________
______________________________ Title: ______________________________
Name (print):_________________
WITNESS/ATTEST: TENANT:
ALEXION PHARMACEUTICALS, INC.
______________________________ By: ______________________________
Name (print):_________________ Name: ______________________________
______________________________ Title: ______________________________
Name (print):_________________]
3
<PAGE>
EXHIBIT E
LANDLORD'S WORK
In order to induce Tenant to enter into the Lease to which this Exhibit is
attached and in consideration of the mutual covenants hereinafter contained,
Landlord and Tenant hereby agree as follows:
1. LANDLORD'S WORK.
Reference herein to "Landlord's Work" shall mean the following work to be
done by Landlord at the Building: (i) installation of a new roof; (ii) repaying
and restriping of the existing parking lot, (iii) repair, or if Landlord
determines it to be necessary, replacement of the existing heating, ventilation
and air conditioning units servicing the Premises and installation of energy
management systems; (iv) construction of a common entrance to the Building in
the area shown on the Plan; (v) installation of demising walls between the area
of the Premises and the remaining area of the Building in locations shown on the
Plan; (vi) separation of utilities to permit, to the extent feasible, separate
metering or submetering; (vii) installation or upgrade of fire alarm system
improvements to meet current NFPA 101 - Code for Safety to Life Standards (the
"Life Safety Code"); (viii) tenant signage (as approved by Landlord and all
applicable Governmental Authorities); (ix) clean all supply ductwork; (x)
provide for separate lab waste systems between tenants; (xi) develop a separate
potable/non-potable water system including all related tie-ins to deliver
sufficient potable water for tenant's use at its eyewash and safety shower
systems and to the lavoratories and kitchens located in the Premises; (xii)
emergency lighting upgrades to meet current Life Safety Code; and (xiii) in the
chemical lab areas where Arch is removing Halon Sprinkler Systems, the hook-up
or installation of a wet sprinkler system.
2. PERFORMANCE OF LANDLORD'S WORK.
Landlord shall use commercially reasonable efforts to complete items (iii)
through (xiii) of Landlord's Work during the Arch Move-Out Period and items (i)
and (ii) within 6 months thereafter. Landlord shall also use commercially
reasonable efforts to promptly repair existing roof leaks where they exist in
non-warehouse areas of the Premises.
3. COMPLETION OF LANDLORD'S WORK.
Landlord's Work shall be deemed substantially complete when Landlord's
construction manager certifies the same has been substantially completed,
notwithstanding the fact that minor details of construction, mechanical
adjustments or decorations which do not materially interfere with Tenant's use
and enjoyment of the Premises remain to be performed (items normally referred to
as "punch list" items). All punch list items shall be agreed upon by Landlord
and Tenant and shall be promptly completed by Landlord.
<PAGE>
EXHIBIT F
NOTICE OF COMMENCEMENT OF LEASE
To: ___________________________ Date: __________________________
___________________________
___________________________
Re: Lease dated ___________, 20__, between__________________________________,
Landlord, and ________________________________________, Tenant located at
______________________________________________________.
Gentlemen:
In accordance with the subject Lease, we wish to advise and/or confirm as
follows:
1. That the Tenant has possession of the Premises and acknowledges that
under the provisions of the Lease the Term of said Lease shall commence (or has
commenced) as of __________ for a Term of __________ ending on___________.
2. That in accordance with the Lease, Tenant's obligation to pay Fixed
Rent commenced or shall commence to accrue on ________________________.
3. Rent is due and payable in advance on the first day of each and every
month during the term of said Lease. Tenant's rent check should be made payable
to ___________________________________ at _________________________________.
4. The Landlord has substantially completed the Landlord's Work, in
accordance with the Lease, except for punch1ist items and _________________.
ACCEPTED AND AGREED
LANDLORD: TENANT:
__________________________ ___________________________
By:_______________________ By:________________________
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CHESHIRE ZONING BY-LAWS - ARTICLE III DISTRICT REGULATIONS Page 1
Munilaw
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EXHIBIT G
CHESHIRE ZONING BY-LAWS - ARTICLE III DISTRICT REGULATIONS
NEW HAVEN COUNTY
TOWN OF CHESHIRE
ARTICLE III
DISTRICT REGULATIONS
SECTION 30 Permitted Uses. "Schedule A, Permitted Uses", is hereby declared to
be part of these Regulations. Land and structures in a district shall be used
only for one or more of the uses which are specified in Schedule A as being
permitted in the district. Uses listed in Schedule A are permitted or prohibited
in accordance with the following procedures:
"Y" means a use permitted as a matter of right.
"P" means a use permitted subject to obtaining a Special Permit from the
Planning and Zoning Commission as provided in Section 40.
"S" means a use permitted subject to the administrative Site Plan approval by
the Planning and Zoning Commission as provided in Section 41.
"N" means a use not permitted.
Where two or more permitted uses occupy one lot, the minimum area requirement
for that lot shall be calculated by separating the requirements for a
residential unit or units from other permitted uses on that lot, as detailed in
Schedule A. (1) When located on the same lot as a dwelling unit or units and
when conducted by a resident of the property, certain uses are considered
accessory to the residential use, and the minimum lot size shall be determined
only by the residential use(s), as specified by Section 32, Schedule B, or the
lot
(1) Amendment effective December 23, 1975.
(1) Amendment effective October 30, 1981.
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
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.. Dwellings containing one dwelling unit and not more than two Y Y Y Y N N N N N
such dwellings per lot provided all requirements of these
Regulations shall be met for each dwelling unit as though each
were on an individual lot.(l)
lA. Dwellings containing one (1) dwelling unit and not P P P P N N N N N
more than two (2) such dwellings per rear lot (as
regulated by Section 5.5 of the Subdivision
Regulations) providing all requirements of the
regulations shall be met for each dwelling unit as
though each were on an individual rear lot.(6)
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Dwellings containing one dwelling unit, and not Y Y Y Y Y Y Y N N
more than one such dwelling per lot, occupied by a
person, together with his family, who is the
owner, corporate officer, manager, caretaker, or
janitor of a permitted commercial use on the same
lot.(2)
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A. Dwellings containing one or two dwelling units and not N N N N P P P N N
more than two dwellings per lot may be permitted in
commercial zones subject to the following conditions:
1. That the areas to be used for residential purposes
shall meet all the requirements of a residence in
an R-20 zone and each dwelling unit shall require
20,000 square feet exclusive from any other use or
dwelling unit on the lot.(3)
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Dwellings containing two dwelling units and not more P P P P N N N N N
than two such dwellings per lot provided all
requirements of these Regulations shall be met for each
dwelling as though it were on an individual lot and each
dwelling unit meets the applicable minimum lot area
requirements.(5)
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3,4 Amendment effective December 23, 1975
Amendment effective October 30, 1981
Amendment effective August 27, 1984
Amendment effective December 4, 1992
Amendment effective March 27, 1998.
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</TABLE>
(30-2)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
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5.(1) One additional dwelling to be used as an in-law, P P P P P P P P P
apartment, including kitchen facilities, may be located
in the dwelling even if the size of the lot is not large
enough to fulfill the minimum lot area requirements for
an additional dwelling unit, and shall be subject to the
following conditions:
a. That the entire dwelling is only to be occupied by
family members (related by blood, marriage, or
adoption), and is not to be rented or used for
income purposes.
b. That tile in-law apartment shall be directly
attached to the existing dwelling or attached to
the dwelling via an enclosed structure. In
addition, the in-law apartment shall not exceed a
maximum floor area of 750 square feet.
c. That the in-law apartment shall be accessible to
the main dwelling unit.
d. That the in-law apartment shall utilize the
dwelling's existing driveway and utility meters.
e. That wherever possible the entrance to the in-law
apartment shall be located to the side or rear of
the existing dwelling and/or the proposed
addition.
f. That the Special Permit is temporary in that it
shall expire five (5) years after publication of
the legal notice of the approval, or at the time
of sale or transfer of the property, whichever
comes first. The Planning and Zoning Commission
may, at the request of the property owner, extend
the permit for any number of periods, each not
longer than five (5) years. This may be done by
providing the Commission with a notarized
statement verifying that the use of the in-law
apartment complies with the above requirements.(5)
g. If the Special Permit expires, the property
owner shall at his or her own expense, remove the
kitchen facilities within sixty (60) days of the
expiration of the Special Permit.(2)
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5A. Plannned Residential Developments provided such P P P P N N N N N
development is served by a public sanitary
sewerage system and a public water supply system
or a state-approved community water supply system,
and subject to the provisions of Section 43.
5B. Planned Residential Developments designed N N N P N N N N N
exclusively for occupancy by elderly persons
provided such development is served by a public
sanitary sewerage system and a public water supply
system and subject to the provisions of Section
43.
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7. Planned Residential Developments provided such P P N N N N N N N
development is served by a public water supply
system or a state-approved community water supply
system and subject to the provisions of Section
43.
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</TABLE>
(1) Original Para. 5 Deleted 4/29/76.
(2) Amendment 9/26/80
(3,4) Amendments 7/1/83
(5) Amendments 12/22/89 & 10/27/95
(30-3)
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SECTION 30, SCHEDULE A, PERMITTED USES
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Trailers, motor homes, or mobile homes on the same lot P P P P P P P P P
with a dwelling containing one dwelling unit and subject
to the following conditions:
a. There shall be no more than one trailer, motor
home, or mobile home per lot.
b. If the trailer, motor home or mobile home is to be
occupied, its sanitary facilities shall have the
approval of the Town Health Officer, and it shall
be occupied by only one family, at least one of
whom shall be either the owner of the lot or
related by blood, marriage, or 1egal adoption to a
member of the family occupying the dwelling unit.
Such dwelling unit may be one for which a building
permit has been issued.
c. The trailer, motor home, or mobile home shall be
located so as not to be generally visible from the
street and the surrounding property.
d. Any approval shall be limited to a period of one
year and not renewable.
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Camp trailers, motor homes, boats(1) and pickup coaches, Y Y Y Y Y Y Y Y Y
unoccupied, not more that 23 feet in length and subject
to the following conditions:
a. There shall be no permanent connections to utility
service including electrical, heat, water,
sanitary service and the like.
b. Storage shall be to the rear of the dwelling or
other major building, in a neat and orderly manner
generally not visible from the street and where
collapsible, in a collapsed state or shall be
stored in a garage.
c. Storage shall be limited to camp trailers, motor homes,
boats and pickup coaches in a residential zone, but no
more than two of the above listed items shall be stored
per dwelling unit. In addition, such vehicles shall be
registered in the name of and be the legal property of
an occupant of the dwelling unit.
(1) Amendment effective January 26, 1979.
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</TABLE>
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SECTION 30, SCHEDULE A, PERMITTED USES
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10A. A business or professional office when conducted on the Y Y Y Y Y Y Y Y Y
premises entirely by mail and/or telephone and when
there is no pedestrian, automobile or other vehicular
traffic necessary for its conduct with the exception of
normal residential traffic activity by the residents,
provided the use meets all the requirements as follows:
a. No persons other than family members residing on
the premises, shall be engaged in the conduct of
the office or enterprise
b. The office or enterprise shall not impair the
residential character of the premises and
neighborhood, and shall have no outside storage
or display windows, nor shall there be any
evidence of the operation outside the dwelling
unit.
c. The floor area used for the conduct of the office
or enterprise shall not exceed 25 per cent of the
floor area of the dwelling unit.
d. The use shall not create interference with radio
and television reception in the vicinity.
e. No industrial manufacturing or processing
equipment of any type shall be allowed.(l)
(1) Amendment effective May 27, 1976
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</TABLE>
(30-5)
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SECTION 30, SCHEDULE A, PERMITTED USES
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lOB. A professional or business office or customary home S S S S Y Y Y Y Y
enterprise excluding data processing and the like, in a
dwelling unit and not in an accessory building and
subject to the following conditions:
a. The person or persons conducting the office or
enterprise shall reside in the dwelling unit, and
there shall be no more than two non-resident
persons engaged in the conduct of the office or
enterprise.
b. The office or enterprise shall not impair the
residential character of the premises and there
shall be no evidence of the operation outside the
dwelling unit except permitted signs. The use
shall be completely enclosed in the building and
shall have no outside storage or display windows.
c. The floor area used for the conduct of the office
or enterprise shall not exceed 25 per cent of the
finished space area of the dwelling unit.
d. The use shall not create interference with radio
and television reception in the vicinity.(1)
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11. The letting of rooms and/or furnishing of board in a P P P P P P P P P
dwelling unit to a total of not more than six persons,
subject to the following conditions:
a. The person or persons letting the rooms shall
reside in the dwelling unit.
b. The letting of rooms shall not include the
provision of cooking facilities for such rooms but
may include sharing of the cooking facilities of
the dwelling unit.
c. No accessory building shall be used for letting of
rooms or furnishing of board.
d. Such use shall not be combined with a commercial
or industrial use on a lot except as provided in
paragraph 2 of this section.
(1) Amendment effective May 27, 1976
(2) Amended effective January 29, 1988
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</TABLE>
(30-6)
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12. Housing subject to state and local provisions for Y Y Y Y Y Y Y Y Y
migrant (temporary) farm labor, on the farm where they
are primarily employed.
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13. Farms, truck gardens, nurseries, forestry and the Y Y Y Y Y Y Y Y Y
keeping of livestock and poultry except commercial
raising of fur-bearing animals and garbage-fed swine,
provided that no livestock or poultry, except household
pets, shall be kept on any lot of less than 3 acres in
area, and any building used for housing livestock and
poultry or the storage of fertilizer or manure shall be
located not less than 100 feet from any property or
street line.
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14A. Child day care centers and nursery schools which offer N N N P P P P P P
or provide a program of supplementary care to more than
twelve related or unrelated children outside their own
homes on a regular basis for a part of the twenty-four
hours in one or more days in the week, provided the
facility meets all statutes and regulations of the State
of Connecticut for licensing of child day care centers.
14B.(3) Group day care homes which offer or provide a program P P P P P P P P P
of supplementary care to not less than seven nor more
than twelve related or unrelated children on a regular
basis for a part of the twenty-four hours in one or more
days of the week, provided the facility meets all
statutes and regulations of the State of Connecticut
for licensing of group day care homes.(4)
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15. Temporary stands for the display and sale of farm and Y Y Y Y Y Y Y Y Y
truck garden and forestry produce grown exclusively on
the premises provided there is only one such stand on
the premises and that such stand does not exceed 100
square feet in area.
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16. Stands for the display and sale of farm and truck garden S S S S S S S S S
and forestry produce, of which a major portion thereof was
raised or produced on that bona fide farm, provided it
is on an active farm and there is only one such stand on
that farm.(1) Related agricultural products may be sold
provided the sale of such products is secondary to the
operation of the business.(2)
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(1) Amendment effective 5/1/75.
(2) Amendment effective 5/27/76.
(3) Amendment effective 5/26/89.
(4) Amendment effective 2/7/97.
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</TABLE>
(30-7)
<PAGE>
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17. Buildings and facilities used primarily for the P P P P P P P P P
following uses: Churches and places of worship; parish
halls, schools, colleges, universities, museums; general
hospitals (excluding correctional institutions and
hospitals for the insane); cemeteries, educational,
religious, philanthropic, scientific, literary,
historical, and charitable institutions, agricultural and
horticultural societies, is such uses are conducted by a
non-profit organization and not as a business or for
profit, provided that accessory use of such buildings
and facilities for profit or not for profit shall be
allowed if such use is in connection with a federally,
State or municipally funded program for the elderly
intended to promote the public health, welfare, safety
or education.(1)
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18A. Public Service Corporation buildings and facilities, all P P P P P P P Y Y
with no outside service yard or outside storage or
supplies.(2)
18B. Public Service Corporation buildings and facilities with N N N N N N N Y Y
outside service yard or outside storage supplies.(3)
18C. Public Service Corporation buildings and facilities not P P P P S S S S S
exceeding 100 square feet above ground level in area or
10 feet in height:
a. The facility shall be located on a lot or
casement of not less than 400 sq. ft.
b. Minimum setback from street line shall be 10 feet.
c. Minimum setback from side line and rear line shall
be 5 feet.
d. Sufficient landscaping and screening shall be
provided to insure that the facility is in
harmony with the zone and the surrounding
neighborhood.
e. All utility wires from adjacent poles to the
facility shall be underground.(4)
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19. Municipal Buildings and Uses of the Town of Cheshire and P P P P P P P P P
other governmental uses.(5)
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(1) Amendment effective October 30, 1975.
(2) Amendment effective September 17, 1979.
(3) Amendment effective September 17, 1979.
(4) Amendment effective August 30, 1985.
(5) Amendment effective September 17, 1979.
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</TABLE>
(30-8)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
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20. Clubs for golf, tennis, swimming and similar facilities P P P N N N N P P
whether conducted as a business for profit or not, with
or without a liquor permit, subject to the following
conditions:
a. Golf facilities shall be located on a lot of not
less than 50 acres or, if in combination with
tennis, swimming, or similar facilities, not less
than 60 acres. Tennis, swimming and similar
facilities alone shall be located on a lot of not
less than 10 acres.
b. Unless located in an I-1, or I-2 zone, all club
facilities, including club house, pro shop,
restaurant, bar, locker rooms, or recreation hall
shall be located not less than 200 feet from any
property line and parking area and accessory
buildings shall be located not less than 150 feet
from any property line. If any of the above are
located in an I-1 or I-2 zone, the normal
dimensional requirements set forth in Section 32,
Schedule B, shall apply, as well as the normal
parking setback requirements for Industrial zones
as set forth in Section 33.1 and parking
requirements as set forth in Section 33.1.7.(1)
c. A single indirectly lighted sign of not more than
six square feet single side area, nor more than
six feet in height as measured from the ground may
be maintained not less than 20 feet from any
property line.
d. The furnishing of meals, refreshments, beverages
and entertainment shall be incidental to the
conduct of the facility, and provided that
three-quarters of the customers' seats are located
within an enclosed building of the facility. There
shall be no living accommodations except for
employees of the club.
e. Golf facilities shall be so designated and located
that there is no hazard to persons or property off
the premises. A11 tees shall be located no less
than 30 feet from any property line. There shall
be no artificial lighting on the course itself and
no play permitted alter darkness.
(1) Amendment effective April 17, 1972.
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</TABLE>
(30-9)
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SECTION 30, SCHEDULE A, PERMITTED USES
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21. Assisted living, convalescent homes, and the like P P P P N N N N N
licensed by the State of Connecticut subject to the
following conditions:(3)
a. The facility shall be the only building on a lot
of no less than 10 acres in area.
b. The facility shall meet the following dimensional
requirements:
Minimum setback from street line 150 ft.
Minimum setback from sideline 50 ft.
Minimum setback from rear line 100 ft.
Maximum height of structure 40 ft.
Maximum lot coverage 10 %
c. In addition to the above requirements, a minimum
of 50% of the total area shall be landscaped or
designated as open space.
d. Parking in assisted living residential facilities
shall be a minimum of one (1) per every three (3)
dwelling units and on (1) for every employee on
the largest shift.
e. As part of the filing requirements for the special
permit, the applicant shall submit a profile
drawing to scale showing the proposed facility and
its relationship to buildings on both sides
for a distance of 500'. The commission may
require additional information necessary to assist
them it determining the scale of the proposed
structure(s) in relation to the surrounding area.
This additional information may include visual
representations of the project such as, but not
limited to, architectural models made to scale,
additional renderings, etc.
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21A. Facilities for the retarded and/or autistic, licensed by P P P P N N N N N
the State of Connecticut and subject to the following
conditions:
a. The facility shall be located on a lot not less
than ten (10) acres in area.
b. There shall not be more than thirty-six (36)
individua1 residents on the premises at any one
time. Residential dwellings shall be separate
buildings containing six (6) or less residents plus
the appropriate staff personnel.
c. If the facility provides educational services, no
more than twenty (20) additional students shall be
allowed Classrooms, recreation, administration and
other similar activities may be housed in a
separate building.
d. All structures shall be located at least 100 feet
from all property lines.(l)
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22. Parks and play grounds, historic landmarks, and the like, P P P P P P P P P
operated by a private or governmental unit or a community
association.
</TABLE>
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SECTION 30, SCHEDULE A, PERMITTED USES
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23. Campgrounds (cont.) P P N N N N N N P
c. Access roads at the entrance shall be paved to
Town standards for quality and shall be a minimum
of 22 feet wide.
d. The check-in station or office shall be at least
500 feet from the entrance intersection and shall
have adequate paved parking to avoid congestion.
(1 space for each employee and a minimum of 5
visitor's spaces.)
e. Interior circulation shall be by one-way system
where feasible. Such one-way roads shall be 12
feet wide and shall be oiled.
f. No campsite shall be closer to the state highway
than 500 feet nor closer than 300 feet from any
other property line.
g. There shall be no more than four campsites per
acre. For each such developed acre, 2 undeveloped
acres shall be required.
h. No campground shall have less than a minimum of 5O
acres.
i. All campsites devoted to tenting shall be on
well-drained gravel sites.
j. Tenting areas shall be protected from vehicular
traffic.
k. Rubbish shall be collected daily from all
campsites.
1. Potable crater supply and sanitary facilities
shall meet State Health requirements. In addition,
all toilets shall be flush-type.
m. Water retention ponds and other precautions for
fire protection shall be developed as per request
of Town of Cheshire Fire Marshal.
n. There shall be a 14-day maximum occupancy limit
during any 90-day period.(1)
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24. Hotels, motels, tourist courts and the like, designed N N N N N N N N P
primarily for transient guests and subject to the
following conditions:
a. The facility shall be located on a lot of not less
than 120,000 square feet in area and there shall be
not less than 4,000 square feet of land area for
each guest unit on the premises and not less than
20,000 square feet of land area for each guest
unit equipped with kitchen facilities.
(1) Amendment effective February 27, 1975.
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</TABLE>
(30-11)
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24. Hotels (cont.)
b. The facility shall be served by a public water N N N N N N P N P
supply system or a state-approved community water
supply system.
c. The front and rear setbacks shall not be less than
100 feet and side line setbacks not less than 50
feet.
d. No more than 20 percent of the units shall have
kitchen facilities.
e. This section shall not be held to permit trailer
parks or camps.
- ---------------------------------------------------------------------------------------------------------------------------------
25. Privately owned and managed ambulance services certified N N N P P P P P P
as required by the Connecticut General Statutes as
amended.(1)
(0riginal Para. 25 Restaurants, deleted by Commission
action on 2/26/79)
- ---------------------------------------------------------------------------------------------------------------------------------
26. a. Restaurants and other food service establishments, N N N N S S S P P
with or without a liquor permit, provided at least
three quarters of the customer seats are located
within an enclosed building. Restaurants and other
food service establishments when in industrial
zones shall not be constructed or located within
2,000 feet of any existing or proposed
restaurants. Distances shall be measured between
the nearest point of the nearest adjacent sides of
the existing and proposed restaurants.(2),(4)
b. Such uses may include a food take-out service
incidental to the primary permitted use where
customers are served in motor vehicles.(4)
- ---------------------------------------------------------------------------------------------------------------------------------
27. Ice cream parlors, where ice cream, soda and ice cream N N N N S S S N N
associated products are the only items sold provided
customers are served only when inside the building, and
further provided there is a minimum of ten seats located
inside the building for use by customers. Parking shall
conform to Paragraph 31.1.7 of these Regulations.(3)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Amendment effective May 2, 1988
(2) Amendment effective March 2, 1979.
(3) Amendment effective July 22, 1976.
(4) Amendment effective September 30, 1994.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(30-12)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
--------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
** ** *
23. Gasoline stations (wholesale and retail) with or without N N N N N P P P N
repairer's license and Repairers subject to the
following conditions and certifications as required by
the Connecticut General Statutes as amended - gasoline
stations (wholesale and retail) with or without a
repairer's license and Repairers.
a. Any petroleum or other inflammable products stored
above ground shall be contained in drums or
containers of not more than 55 gallons, except
that fuel oils to be consumed on the premises may
be stored in a 275 gallon tank.
b. The facility shall be located on a lot having a
frontage of at least 150 feet on a street and
having a land area of at least 30,000 square feet.
c. All gasoline pump islands shall be located at
least 25 feet from all lot lines.
d. No curb-cut shall be greater than 30 feet in width
and no part of any curb-cut shall be within 25
feet of any side or rear line or street
intersection. All curb-cuts shall be clearly
defined by curbing.
e. Gas stations with full repairer's license shall be
permitted provided such use be located on a lot
having a frontage of at least 150 feet on a street
and having a land area of at least 40,000 square
feet.
f. All accessory equipment or merchandise displayed
outside shall be no more than 10 feet from the
building with the exception that such merchandise
and accessory equipment shall be permitted to be
displayed on the pump island.
g. After the effective date of this amendment to this
section and these regulations, no retail or
wholesale gasoline station shall be constructed or
located within fifteen hundred feet (1,500) of an
existing gasoline filling station (retail or
wholesale).
(1) Amendment effective March 12, 1971.
* Effective December 30, 1983 ** Effective 6/8/90
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(30-13)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
--------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
# * #
29. Motor vehicle dealers (which can have repairer's N N N N N N P P P
licenses by State Statutes) subject to the following
conditions and certification as required by the
Connecticut General Statutes as amended.
a. Any petroleum or other inflammable products stored
above ground shall be contained in drums or
containers of not more than 55 gallons, except
truck fuel oils to be consumed on the premises may
be stored in a 275 gallon tank
b. The facility shall be located on a lot having a
frontage of at least 150 feet on a street and
having a land area of 40,000 square feet.
c. Outside accessory equipment or structures shall be
located at least 25 feet from all lot lines.
d. No curb-cut shall be within 25 feet of any side or
rear line or street intersection. All curb-cuts
shall be clearly defined by curbing.
- ---------------------------------------------------------------------------------------------------------------------------------
30. Automatic Car Washing and Cleaning Establishments. An
establishment equipped to wash automobiles, pick-up
trucks, and small vans. The car wash shall be fully
automatic enabling the driver to remain in the vehicle
as it is washed. It shall be in a completely enclosed
building./2/
/1/ Amendment effective March 12, 1971.
/2/ Amendment effective February 27, 1987
* Effective December 30, 1983
** Effective December 19, 1986
# Effective June 8, 1990
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(30-14)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
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ZONING DISTRICTS
--------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ---------------------------------------------------------------------------------------------------------------------------------
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31. Commercial and Boarding Kennels and Veterinary hospitals P P P N N N N P S
subject to the following conditions:
a. No dogs shall be housed or exercised in outside
kennels or runs.
b. A11 buildings in which dogs are housed or
exercised shall be of solid construction of either
masonary or framed with insulation and shall have
finished interior walls.
c. Exercise runs shall have finished masonary floor
with covered drains, and shall be separated by
solid partitions of at least 4 feet in height.
d. All external doors shall be of solid core
construction.
e. Kennel rooms and exercise runs shall be provided
with forced air ventilation and shall have no open
windows.
f. A11 ceilings shall be insulated and finished with
sound absorbent materials.
g. In residential zones, the facility shall be on a
lot with a minimum area of 5 acres and any
building housing animals shall be at least 150
feet from any property line.
h. In industrial zones, the facility shall be on a
lot with a minimum area of 100,000 square feet, a
minimum lot width of 250 feet and subject to the
frontage setback, height and lot coverage
requirements of the I-3 zone.
- ---------------------------------------------------------------------------------------------------------------------------------
32. Horses or ponies for hire, riding academies or boarding P P P N N N N P P
stables for five or more animals located on a lot of not
less than 15 acres provided that any building (other
than a dwelling) and riding ring shall be located at
least 300 feet from any lot line.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(30-15)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
--------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
33. Professional and Business offices. N N N P S S S P S
- ---------------------------------------------------------------------------------------------------------------------------------
34. Banks and Other Financial Institutions. N N N P S S S P S
- ---------------------------------------------------------------------------------------------------------------------------------
35. Stores and other buildings and structures where goods N N N N N S S N N
are sold or service is rendered primarily at retail
including self-service clothes cleaning establishments
and including cleaning equipment incidental to the
retail business of the store.
- ---------------------------------------------------------------------------------------------------------------------------------
36. Stores and other buildings and structures not more than N N N N S S S N N
a total of 2,000 sq. ft. of gross floor area per whole
structure, the use of which in whole or in part is for
the sale of goods or rendering of services primarily at
retail and including self-service clothes cleaning
establishments and cleaning equipment incidental to the
retail business of the store.(1)
- ---------------------------------------------------------------------------------------------------------------------------------
37. Undertaker's establishments on a lot of at least 40,000 N N N P S S S N N
sq. ft. in area subject to the following conditions:
a. The lot shall have at least 150 feet of frontage
on the street.
b. The principal building shall not extend to within
less than 60 feet of the front line.
c. Parking shall be in the rear of the principal
building
d. Vehicular access shall be at least 20 feet from
any side or rear line.
- ---------------------------------------------------------------------------------------------------------------------------------
*
38. Radio and television-broadcasting studios excluding N N N N N S S P S
transmitting and receiving towers in excess of 35 feet
above the ground.
(1) Amendment effective September 26, 1974.
* Effective December 30, 1983
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(30-16)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
--------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
39A. Commercial recreation facilities provided the use is the N N N N N N P P N
only use on a lot not less than 30,000 square feet in
area and that the use is located primarily within an
enclosed building.
39B. Indoor ice skating facilities provided the use is N N N N N N S P S
located entirely within an enclosed building or
buildings when requirements of the facility and the
provisions of these regulations require a lot of not
less than 120,000 square feet in area.(2)
39C. Sports Training Facilities with related commercial N N N N N N P P P
recreational facilities provided the use is the only use
on a lot not less than 40,000 square feet in area.
Sports training facilities located in an enclosed
building with related outdoor facilities shall not be
located on any lot with frontage on Route 10 or with
direct access to Route 10. Any outdoor facilities,
although open to the public, shall be secondary to the
primary sports training use, and shall be limited to use
for baseball, soccer, lacrosse, tennis, field hockey,
basketball and footba11.(7)
- ---------------------------------------------------------------------------------------------------------------------------------
*
40. Printing and publishing establishments occupying not N N N N N S S P S
more than 2,500 square feet of floor area.
- ---------------------------------------------------------------------------------------------------------------------------------
*
41. Printing and publishing establishments N N N N N N N P S
- ---------------------------------------------------------------------------------------------------------------------------------
42. Medical clinics and laboratories and dental clinics and N N N P S S S N N
laboratories.
- ---------------------------------------------------------------------------------------------------------------------------------
*
43. Research Laboratories. N N N N N N N P S
- ---------------------------------------------------------------------------------------------------------------------------------
*
44. The manufacture, processing, assembling of goods and N N N N N N N P S
storage incidental to the primary use.(3)
- ---------------------------------------------------------------------------------------------------------------------------------
*
45. Warehousing, wholesale business and wholesale business N N N N N N P P S
warehousing.
- ---------------------------------------------------------------------------------------------------------------------------------
*
46A. Contractor's warehousing and storage yards.(4) N N N N N N N P S
*
46B. Excavation, contractors and paving contractors, N N N N N N N P S
business and equipment storage yards.
- ---------------------------------------------------------------------------------------------------------------------------------
*
47. Lumber and building materials business and storage N N N N N N N P S
yards.
- ---------------------------------------------------------------------------------------------------------------------------------
1 & 2 Amendment effective April 29, 1976.
3 Amendment effective September 1, 1975.
4 46 renumbered to 46A, effective September 1,1975.
5 Amendment effective September 1, 1975.
6 Amendment effective May 8, 1978.
* Effective December 30, 1983.
7 Amendment effective July 29, 1994.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(30-17)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
48. Freight and materials trucking N N N N N N N P S
businesses, freight terminals and
freight transshipment facilities.(1)
- ------------------------------------------------------------------------------------------------------------
49. Laundry, cleaning and dyeing plants. N N N N N N N P P
- ------------------------------------------------------------------------------------------------------------
50. Plants, other than bona fide farms, N N N N N N N P S
for the processing and distribution
of milk and edible dairy products.
Plants for the packaging and
distribution of beverages.
- ------------------------------------------------------------------------------------------------------------
51. Commercial storage and sale of fuel N N N N N N P P S
and bottled gas. Total above ground
tank capacity shall not be more than
30,000 gallons and no above ground
tank shall be closer than 40 feet to
any building.
51A. Commercial storage and sale of bulk N N N N N N N Y Y
liquid oxygen for home health care
and similiar uses shall require
administrative approval by the
Cheshire Fire Marshall, and the Town
Planning office.(6)
- ------------------------------------------------------------------------------------------------------------
52 Painting, woodworking, sheet metal, N N N N N N N P S
blacksmiths, welding, tire recapping,
machine shops and the like.
- ------------------------------------------------------------------------------------------------------------
53A. Bulk storage of cement and concrete N N N N N N N N S
mixing plants.(2)
53B. Bulk storage of petroleum and N N N N N N N N P
petroleum products and bituminous
paving mixing plants.(3)
- ------------------------------------------------------------------------------------------------------------
54. Commercial transmitting and receiving N N N N N N N P S
antenna, with enclosure for
associated equipment, in excess of 35
feet but less than 100 feet above the
ground in height provided the
distance from any lot line shall be
at least two times the height of the
antenna.
- ------------------------------------------------------------------------------------------------------------
55. Earth removal and filling in N N N N P P P P P
accordance with Section 25.(4)
- ------------------------------------------------------------------------------------------------------------
56. Screening, sifting, washing, crushing N N N N N N N P P
bulk storage of, and other forms of
processing of sand, stone, gravel, and
the like.(5)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
1,2,3,5 Amendments effective September 1, 1975
4 Amendment effective February 27, 1975
* Effective December 30, 1983
6 Amendment effective May 28, 1993.
(30-18)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
57. Golf driving ranges. N N N N N N N N P
- ------------------------------------------------------------------------------------------------------------
58. Carnivals or fairs sponsored by a N P P P P P P P P
local non-profit organization,
subject to the following conditions:
a. The facility shall be on a lot
having a minimum area of 3 acres.
b. There shall be provision for
adequate parking within 500 feet
of the facility.
c. All structures shall be a
minimum of 150 feet from any lot
line.
d. Direct access shall be on lands
adjacent to State Highway Routes
10 or 70.
e. Two signs may be allowed for a
period not to exceed the duration
of the event and two weeks
immediately preceding the event.
f. There shall be no more than one
special permit issued to an
organization during any one
calendar year. The duration
shall be for no more than 10
consecutive calendar days.
g. Subsequent yearly events
sponsored by the same
organization and located on the
same site may be approved
administratively by the Planning
Staff.
- ------------------------------------------------------------------------------------------------------------
59. Temporary fairs, bazaars and sales of Y Y Y Y Y Y Y Y Y
local non-profit organizations held
on premises, the majority of which
are owned by the sponsoring
organization, subject to the
following conditions:
a. Duration shall not be more than
10 consecutive calendar days
during any one calendar year.
b. There shall be provision for
adequate parking within 500 feet
of the facility.
c. Two signs may be allowed for a
period not exceed the duration
of the event and the two weeks
immediately preceding the event.
</TABLE>
(1) Amendment effective 7/02/93.
- --------------------------------------------------------------------------------
(30-19)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
60. Accessory uses customarily associated Y Y Y Y N N N N N
with or incidental to any permitted
use in any residential zone subject
to the following conditions:
a. Accessory uses may include
private garages for the use of
the occupants of the lot. One
garage space may be rented to a
non-resident of the lot provided
the garage space is not one of
the spaces required in Section
33.1.1 and the use of the rented
space meets all other
requirements of the Zoning
Regulations.
b. Buildings and structures for
recreational and homeowner
association use in approved
Planned Residential Developments
and Cluster Subdivisions shall
be considered accessory uses.
c. All accessory buildings shall
meet the requirements of Section
32.2.5.
d. Except as provided elsewhere in
these Regulations, such uses
shall not include the sale of
articles not made on the
premises, nor a restaurant, or
other food service
establishment, beauty parlor or
other hairdressing
establishment, and the like.
e. No accessory use shall change
the residential character of the
area.(1)
- ------------------------------------------------------------------------------------------------------------
61. Clubhouses for non-profit, fraternal, N N N N N P P N N
community service and/or veteran's
organizations with or without a
liquor permit. Parking requirements
shall be in accordance with Section
33.1.2.(2)
</TABLE>
(1) Amendment effective September 25, 1975.
(2) Amendment effective November 29, 1972.
- --------------------------------------------------------------------------------
(30-20)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
62. Temporary political signs pertaining Y Y Y Y Y Y Y Y Y
to candidates, political parties or
political issues in a National, State
or Municipal election for a period of
60 days prior to and 7 days
subsequent to said election, subject
to the following:
a. No more than one sign per lot,
not to exceed: 6 square feet in
the R-80, R-40, R-20 and R-20A
zones; 32 square feet in the
C-1, C-2, C-3, I-1 and I-2
zones. (1)
b. Regardless of zone, one 32
square foot free-standing sign
and wall signs covering the
front or entrance wall shall be
allowed for one Townwide
headquarters per political
party. (1)
c. The responsibility for removal
of signs shall lie with the
individual or individuals
posting said sign or signs. (2)
</TABLE>
(1) Amendment effective July 1, 1983
(2) Amendment effective September 1, 1975
- --------------------------------------------------------------------------------
(30-21)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
64. A temporary real estate office Y Y Y Y Y Y Y Y Y
located on the site of a Planned
Residential Development, Cluster
Subdivision, Resubdivision or Rental
Apartment development approved by the
Planning and Zoning Commission
provided:
a. That the temporary real estate
office is exclusively for the
sale or rental of units or homes
on the site on which said office
is located.
b. That the temporary real estate
office shall be located in one
of the hones or units in the
development.
c. That the temporary real estate
office shall be permanently
removed when 90 percent of the
units or homes are initially
sold or rented. (1)
- ------------------------------------------------------------------------------------------------------------
65. A temporary construction office Y Y Y Y Y Y Y Y Y
provided:
a. That the temporary construction
office shall be used exclusively
for construction on the site on
which it is located.
b. That the temporary construction
office be located either in a
model home or unit or in a
movable trailer or trailers.
c. That the temporary construction
office be permanently removed
upon completion of all
structures on the approved
section of the site of the
Planned Residential Development,
Cluster Subdivision,
Subdivision, Resubdivision, Site
Plan, Special Permit, Planned
Commercial Development, approved
lot or lots of record. (2)
</TABLE>
(1) Amendment effective September 1, 1975.
(2) Amendment effective September 1, 1975.
- --------------------------------------------------------------------------------
(30-22)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
66. Refuse Transfer and Recycling Centers N N N N N N N N P
-- Refuse contractors within enclosed
buildings which shall include
facilities for the transfer
and sorting of refuse for the
recycling of same providing that
adequate buffer areas are provided
between the structure and adjoining
properties, and adequate on site
measures shall be taken to prevent
the activity from in any way
affecting the adjoining properties.
Nothing herein shall be construed to
prevent on site storage in no more
than two covered roll off containers
which shall be located immediately
adjacent to the facility subject,
however, to the provisions relating
to outside storage as set forth in
Sections 32.7 and 32.7.1 of these
regulations. (1)
- ------------------------------------------------------------------------------------------------------------
67A. Sheltered Care Facility Designed N P P P N N N N N
Exclusively for Occupancy by Elderly
Persons -- in accordance with the
provisions of Section 43.6
- ------------------------------------------------------------------------------------------------------------
67B. Planned Community Designed N P P P N N N N N
Exclusively for Occupancy by Elderly
Persons Providing Interrelated
Residential Units and Varying Levels
of Nutritional and Health Care Units
and Related Services -- in accordance
with the provisions of Section 43.7
- ------------------------------------------------------------------------------------------------------------
68. Helioports and storage facilities for N N N N N N N P P
helicopters, excluding emergency
helicopters, subject to the following:
Helioports must be located on
lots of at least 10 acres and no
portion of the landing area may
be closer than 300 feet from the
nearest property line. All
helioports shall meet the
standards and conditions set by
the State of Connecticut,
Department of Aeronautics.(2)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(2) Amendment effective December 24, 1987.
(1) Amendment effective August 31, 1979.
- --------------------------------------------------------------------------------
(30-23)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
69. Health and Exercise Facilities. (1) N N N P S S S P S
- ------------------------------------------------------------------------------------------------------------
70. Boat dealers, to include sales and N N N N N N P P P
service of boats, motors, boat
trailers and related accessories,
subject to the following conditions:
a. Any petroleum or other
inflammable products stored
above ground shall be contained
in drums or containers of not
more than 55 gallons, except
that fuel oils to be consumed on
the premises may be stored in a
275 gallon tank.
b. The facility shall be located on
a lot having a frontage of at
least 150 feet on a street and
having a land area of 40,000
square feet.
c. No curb-cut shall be within 25
feet of any side or rear line or
street intersection. All
curb-cuts shall be clearly
defined by curbing. (2)
- ------------------------------------------------------------------------------------------------------------
71. The sale of registered motor vehicles Y Y Y Y Y Y Y Y Y
on a residential lot and subject to
the following conditions:
a. The motor vehicle for sale shall
not exceed a rated capacity of
two and one-half (2 1/2) tons. In
addition, such vehicles shall be
registered in the name of and/or
be the legal property of a
resident of the dwelling unit.
b. No more than two (2) motor
vehicles shall be offered for
sale or sold from any one lot in
the period of one calendar year. (3)
</TABLE>
(1) Amendment effective April 29, 1988.
(2) Amendment effective May 27, 1988.
(3) Amendment effective September 30, 1988.
- --------------------------------------------------------------------------------
(30-24)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
72. The Sale and Display of Antiques (1) P P P P S S S N N
"Antiques" for the purpose of these
regulations are defined as any work
of art, piece of furniture,
decorative object, and the like,
created and produced at least 25
years prior to the date of sale.
The sale and display of antiques
subject to the following conditions:
1. Additional storage is permitted
in an ancillary building
provided it is entirely enclosed
within another building.
2. There shall be no external
evidence of such use other than
permitted signage as provided in
Section 34.1.1 for Residential
Zone and 34.1.4 in Commercial
Zones.
3. There shall be a minimum of five
(5) parking spaces provided on
the site.
4. In Residential Zones:
a. property must have frontage
onto a State Highway
b. such use must be secondary
to the residential use of
the entire premises and
shall not occupy more then
50% of the floor area in the
residence wherein located.
- ------------------------------------------------------------------------------------------------------------
73. Hair and Beauty Salons (2) N N N P P P P P* P*
(including barber shops)
* When in industrial zones shall
not be constructed or located
within 1,000 feet of any
existing or proposed hair or
beauty salon.
a. Distances shall be
measured between the
nearest adjacent sides of
the existing and proposed
beauty salons.
b. Parking requirements shall
be according to Section
33.1.7 standards.
</TABLE>
(1) Amendment effective March 31, 1995.
(2) Amendment effective April 26, 1996 at 12:01 A.M.
- --------------------------------------------------------------------------------
(30-25)
<PAGE>
SECTION 30, SCHEDULE A, PERMITTED USES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ZONING DISTRICTS
-------------------------------------------------------------
PERMITTED USES R-80 R-40 R-20 R-20A C-1 C-2 C-3 I-1 I-2
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
74. ADULT ENTERTAINMENT (1) N N N N N N N P P
Businesses providing adult entertainment
shall not be located within 500 feet of any
other such business nor within 2,000 feet of
any public or private school or day care
center, church, synagogue, or other similar
place of worship; public park, playground, or
other recreational facility where large
numbers of minors regularly congregate:
library: funeral home: or residentially zoned
or residentially used property. The distance
shall be measured in a straight line from the
nearest edge of the building or zoning
district boundary line, as applicable. Adult
entertainment shall include, but not be
limited to, the following: Topless dancing or
any dancing or performance which involves
nudity, which involves the removal of
clothing such that partial or complete nudity
results, which involves the fondling of the
genitals of the dancer or performer or the
genitals of another person, or which involves
sexual intercourse or deviate sexual conduct.
Nudity is defined as the showing of the male
or female genitals, pubic area or buttocks
with a less than fully opaque covering; the
showing of the female breast with less than a
fully opaque covering of any part of the
nipple; or the showing of the male genitals
in a discernibly turgid state.
- ------------------------------------------------------------------------------------------------------------
75. Pet Grooming (2) N N N P P P P P* P*
*When in industrial zones shall not
be constructed or located within
1,000 of an existing or proposed pet
groomer.
a. Distance shall be measured
between the nearest
adjacent sides of the
existing and proposed pet
groomers.
b. No dogs shall be housed
outside.
c. Parking requirements shall
be according to Section
33.1.7 Standards.
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amendment effective June 7, 1996. (30-26)
<PAGE>
EXHIBIT H
PAGE 1 0F 2
[Graphic Omitted: Plan for proposed expansion of premises]
PLAN A
<PAGE>
EXHIBIT H
PAGE 2 0F 2
[Graphic Omitted: Plan for proposed expansion of premises]
PLAN B
<PAGE>
EXHIBIT I
All that certain parcel of land, with the buildings and improvements located
thereon, situated on the southerly side of Knotter Drive In the Town of
Cheshire, County of New Haven and State of Connecticut, and being shown on a map
entitled "Plan Prepared for WE Knotter, LLC. 350 Knotter Drive Cheshire, Conn.
ALTA/ACSM Land Title Survey Scale: 1" = 100' Date: 10-25-1999 Design: RED Draft:
SLH Project: 99267" made by Meehan & Goodin, Engineers - Surveyors, P.C., which
map is on file in the Town Clerk's Office in the Town of Cheshire to which
reference may be had. Said premises are more particularly bounded and described
as follows:
Beginning at a point with State Coordinates N 259654.677. E 552480.562, which
point marks the southwesterly corner of the herein described parcel;
Thence N 21(degrees) 48' 52" E along land now or formerly of Bloomingdale's By
Mail, Ltd., a distance of 1,419.365 feet to a point;
Thence by a curve to the left having a delta angle of 55(degrees) 30' 00" and a
radius of 780.00 feet along the southerly line of Knotter Drive. an arc distance
of 755.553 feet to a point;
Thence N 30(degrees) 00' 00" E along the southerly line of Knotter Drive, a
distance of 2.362 feet to a point;
Thence S 62(degrees) 56' 39" E along land now or formerly of Louis Deberadinis,
a distance of 1,516.538 feet to a point;
Thence S 32(degrees) 57' 00" W along land now or formerly of JMJ Associates,
LLC, a distance of 154.399 feet to a point;
Thence S 30(degrees) 36' 32" W partly along land now or formerly of JMJ
Associates, LLC, and partly along land now or formerly of Bloomingdale's by
Mail, Ltd., in all, a distance of 316.871 feet to a point;
Thence S 9(degrees) 05' 30" W along land now or formerly of Bloomingdale's by
Mail, Ltd., a distance of 40.430 feet to a point;
Thence S 18(degrees) 19' 16" W along land now or formerly of Bloomingdale's by
Mail, Ltd., a distance of 436.678 feet to a point;
Thence N 72(degrees) 24' 33" W along land now or formerly of Bloomingdale's by
Mail, Ltd., a distance of 308.701 feet to a point;
Thence S 21(degrees) 48' 52" W along land now or formerly of Bloomingdale's by
Mail, Ltd., a distance of 1.020.833 feet to a point;
Thence N 49(degrees) 53' 17" W along land now or formerly of Bloomingdale's by
Mail, Ltd., a distance of 357.475 feet to a point;
Thence N 68(degrees) 11' 08" W along land now or formerly of Bloomingdale's by
Mail, Ltd., a distance of 1.246.798 feet to the point or place of beginning.
<PAGE>
Exhibit J
Tenant's Property
Air-cooled condensing units (Alexion supplied)
Air dryers -- compressed air (Alexion supplied)
Autoclaves (Alexion supplied)
Automated transfer switches (Alexion supplied)
Back-up generators (Alexion supplied)
Process boilers (Alexion supplied)
HVAC boilers (Alexion supplied)
Ceiling mounted HEPA filter modules (Alexion supplied) (Alexion supplied)
Process chillers and associated pumps and tanks (Alexion supplied)
HVAC chillers and associated pumps and tanks (Alexion supplied)
Clean cold rooms with associated condensing units and controls (Alexion
supplied)
Computer networks (Alexion supplied)
Control systems (Alexion supplied)
Controlled environment enclosures and rooms (Alexion supplied)
Electrical panels (Alexion supplied)
Electrical power conditions (Alexion supplied)
Electrical step-down transformers (Alexion supplied)
Fermentors (Alexion supplied)
Fume hoods (Alexion supplied)
Glassware washer (Alexion supplied)
Heat exchangers (Alexion supplied)
Hoists (Alexion supplied)
Intercom systems (Alexion supplied)
Lab casework/furniture including, but not limited to, lab benches, hoods and
shelving units (Alexion supplied)
Motor disconnects / Motor starters (Alexion supplied)
Phone systems (Alexion supplied)
Pressure reducing valves (Alexion supplied)
Reheat packages with associated pumps and tanks (Alexion supplied)
Security systems (Alexion supplied)
Single phasing protection units (Alexion supplied)
Stainless steel piping/valves/pumps (Alexion supplied)
Stainless steel sinks (Alexion supplied)
Stainless steel tanks (Alexion supplied)
Steam pressure reducing stations (Alexion supplied)
Stills (Alexion supplied)
Vacuum pumps (Alexion supplied)
Variable frequency drivers (Alexion supplied)
Waste neutralization systems (Alexion supplied)
Water filters (Alexion supplied)
Water softeners (Alexion supplied)
Water systems (Alexion supplied)
April 27, 2000
<PAGE>
EXHIBIT K
PERMITTED REMOVABLES
Arch Chemicals condition of vacated space at 350 Knotter Drive, Cheshire, CT.
1. Removal of Halon Sprinkler System from several of the Chemical labs. This
system is no longer an DEP approved sprinkler system.
2. Arch Chemicals plans on removing all personal equipment from the space.
All cabinets, hoods, benches or other equipment that is permanently
affixed to the floor would stay.
3 The plastic snorkels from the ceiling to lab counters will be removed
4. Light Panel in Room 284 will be removed
5. Gas Cylinders and Specialized DI Water Equipment will be removed
6. In the Library all bookshelves will be removed. The tracking bookshelves
will stay.
7. Unattached center benches in Room E-10 & D10 will be removed. The
attached bench with drawers and the four attached floor-standing cabinets
in Room E-10 will removed.
8. Shelving in the stock room will be removed
9. All attached cafeteria equipment will stay, but tables and chairs will be
removed.
6
<PAGE>
EXHIBIT L
[GRAPHIC OMITTED]
AREA 2 FLOOR PLAN
<PAGE>
EXHIBIT M
VO. 242 PAGE 219
10
Reservations
WARRANTY DEED
TO ALL PEOPLE TO WHOM THESE PRESENTS SHALL COME, GREETING:
KNOW YE, THAT F.I.P. CORPORATION, a Connecticut corporation with its
principal office in Farmington, Connecticut (hereinafter referred to as the
Grantor) for the consideration of Ten Dollars ($10.00) and other valuable
considerations received to its full satisfaction of CONNECTICUT DEVELOPMENT
AUTHORITY, a body politic and corporate and public instrumentality of the State
of Connecticut, at 210 Washington Street, Hartford, Connecticut (hereinafter
referred to as the Grantee) does give, grant, bargain, sell and confirm unto the
said Grantee, its successors and assigns, forever, a certain piece or parcel of
land, with the improvements thereon and appurtenances thereto, situated on the
southeasterly side of FIP Road in the Cheshire Industrial Park in the Town of
Cheshire, County of New Haven and State of Connecticut, as shown on a map
entitled, "Siemens Corporation Cheshire Industrial Park The F.I.P. Corporation,
Developer Aug. 15, 1974 Scale: l" - 100' Cardinal Engineering Associates Inc."
which map is on file in the Town Clerk's Office in said Town of Cheshire, and
being more particularly bounded and described as follows:
Beginning at a point with State Coordinates N 259 654.677, E 552 480.562.
which point is the southwest corner of the herein-described parcel; thence N
21(degrees) 48' 52" E, a distance of one thousand four hundred nineteen and
three hundred sixty-five one-thousandths (1419.365) feet along lands now or
formerly of P.F. Properties and Fisher Family Properties, in part by each, to a
point with State Coordinates N 260 972.404, E 553 008.001; thence in a
northeasterly direction in a curve to the left having a radius of seven hundred
eighty and no one-hundredths (780.00) feet, a distance of seven hundred
fifty-five and five hundred fifty-three one-thousandths (755.553) feet to a
point; thence N 30(degrees) 00' 00" E a distance of two and three hundred
sixty-two one-thousandths (2.362) feet to a point, the last two courses being
along FIP Road thence S 62(degrees) 51' 39" E, a distance of one thousand five
hundred sixteen and five hundred thirty-eight one-thousandths (1516.538) feet
along land now or formerly of T.R.W. Inc. to a point with State coordinates N
260 672.235, E 554 974.058; thence S 32(degrees)
"No Conveyance Tax collected
/s/ Warren E. Hall
---------------------------
Town Clerk of Cheshire
<PAGE>
VO. 242 PAGE 220
57' 00" W a distance of one hundred fifty-four and three hundred ninety-nine
one-thousandths (154.399) feet to a point; thence S 30(degrees) 36' 32" W a
distance of three hundred sixteen and eight hundred seventy-one one-thousandths
(316.871) feet to a point, the last two courses being along land now or formerly
of Krampitz; thence S 9(degrees) 05' 30" W a distance of forty and four hundred
thirty one-thousandths (40.430) feet to a point: thence S 18(degrees) 19' 16" W
a distance of four hundred thirty-six and six hundred seventy-eight
one-thousandths (436.678) feet to a point; thence N 72(degrees) 24' 33" W a
distance of three hundred eight and seven hundred one one thousandths (308.701)
feet to a point; thence S 21(degrees) 48' 52" W a distance of one thousand
twenty and eight hundred thirty-three one-thousandths (1020.833) feet to a point
with State Coordinates N 258 961.049, E 553 911.472; thence N 49(degrees) 53'
17" W a distance of three hundred fifty-seven and four hundred seventy-five one-
thousandths (357.475) feet to an iron pin, the last five courses being along
land now or formerly of Highland Park: thence N 63(degrees) 11' 08" N along land
now or formerly of F. F. Properties a distance of one thousand two hundred
forty-six and seven hundred ninety-eight one-thousandths (1246.793) feet to the
point or place of beginning.
Said parcel contains seventy-five (75) acres.
No portion of FIP Road, as shown on said map, is conveyed hereby, such
road having been conveyed to the Town of Cheshire by deed of F. F. Properties
dated December 12, 1974 and recorded in Volume at Page of the Cheshire Land
Records.
Together with the right to pass and repass over FIP Road for all customary
highway purposes.
Said premises are conveyed subject to the following encumbrances:
A. Any and all provisions of any ordinance, municipal regulation or public
law.
B. Taxes to the Town of Cheshire on the applicable grand list at time of
closing which are liens against the premises not yet due and payable and any tax
or assessment for sanitary sewers which might be levied by municipal authority.
C. Pipeline easements to the Algonquin Gas Transmission company as set
forth in the Cheshire Land Records at Volume 83, Page 154; Volume 108, Page 557;
Volume 83, Page 436: Volume 118, Page 107, Volume 138, Page 293, Volume 138,
Page 429.
D. Drainage easement to the Town of Cheshire 20' in width abutting FIP
Road.
Said premises are subject also to the following reserved rights and
covenants which shall run with the land and bind and inure to the benefit of the
Grantor, its successors and assigns, and the Grantee, its successors and
assigns:
A. The unrestricted right in Grantor to discharge storm waters into the
existing natural water courses and such other water courses as may be agreed
upon by the parties on the premises to be conveyed subject to the rights of
downstream owners; provided, however, that such discharge shall not unreasonably
interfere with Grantee's right to discharge its own storm waters into
- 2 -
<PAGE>
VO. 242 PAGE 221
said water courses or otherwise unreasonably interfere with Grantee's use of the
premises and Grantor will repair any damage to the premises caused by such
discharge and will indemnify and hold harmless Grantee from and against any
claim, damage or expense arising solely out of Grantor's exercise of such
discharge right.
B. A right in Grantor to construct, use, maintain and replace such
underground utility and water and such drainage facilities on the premises as
Grantor may deem necessary for the proper development and operation of Cheshire
Industrial Park wherein the premises are located, provided, however, that such
facilities or the construction thereof shall not unreasonably interfere with the
use of the premises by Grantee and that such utility, water and drainage
facilities shall be located only within fifty (50) feet of the exterior boundary
lines of the premises and provided further that all expenses incurred in the
construction, use, maintenance and replacement of such facilities shall be borne
by Grantor and that upon completion of such construction the premises shall be
restored to their state prior to such construction, including relandscaping.
C. A regulation that the ground floor area of the buildings shall not
exceed twenty (20) percent of the total area of the premises without the prior
written consent of the Grantor or its designees.
D. A regulation that no building or buildings, site improvements or
alterations, signs or other structures shall be constructed on the premises nor
shall any addition thereto be constructed without the prior written approval of
Grantor or its designees of the plot plans, building plans and specifications
for such building or addition. Such approval shall not be withheld provided said
building and any additions thereto including signs shall harmonize in appearance
and be of substantially the same quality and workmanship as the other buildings
and structures in the Cheshire Industrial Park.
E. Grantor shall establish or cause to be established an Association
within the Cheshire Industrial Park for the benefit of the owners and occupants
of the Park to be named "Cheshire Industrial Park Association". The purposes of
the Association shall be to protect and maintain the aesthetic beauty of the
Park and its grounds and improvements by regulations, restrictions and other
desirable means. Said Association when established shall be designated by the
Grantor to grant such approvals as are required from the Grantor whether by deed
or otherwise. The Association shall be established on or before January 1, 1990,
or sooner if at least seventy-five (75) percent of the land area constituting
Cheshire Industrial Park has been sold or otherwise conveyed to those who intend
to occupy the same. The Association shall be composed of owners of land and
occupants of facilities within said Park. All eligible entities who are members
shall be entitled to one vote as an occupant within the Park and one vote for
ownership for each ten acres or fraction thereof within the Park which vote may
be cast by the recorded owner or its designee. The rules when established by the
Association cannot be changed or amended except by the affirmative vote of
seventy-five (75) percent of those entitled to vote thereunder.
- 3 -
<PAGE>
VO. 242 PAGE 222
F. Grantor covenants that all of the land within Cheshire Industrial Park
shall be subject to reserved rights and covenants substantially similar to or
stricter (as respects the subserviant estate) as the foregoing reserved rights
and covenants; subject to such modifications thereto as Grantee shall approve.
TO HAVE AND TO HOLD the above granted and bargained premises, with the
appurtenances thereof, unto it, the said Grantee, its successors and assigns
forever, to its and their own proper use and behoof. And also, it, the said
Grantor, does for itself. its successors and assigns, covenant with the said
Grantee, its successors and assigns, that at and until the ensealing of these
presents, it is well seized of the premises, as a good indefeasible estate in
FEE SIMPLE; and has good right to bargain and sell the same in manner and form
as is above written and that the same is free from all encumbrances whatsoever,
except as hereinbefore mentioned.
AND FURTHERMORE, it the said Grantor, does by these presents bind itself
and its successors and assigns forever to WARRANT AND DEFEND the above granted
and bargained premises to it the said Grantee, its successors and assigns,
against all claims and demands whatsoever, except as hereinbefore mentioned.
IN WETNESS WHEREOF, the Grantor has hereunto caused to be set its hand and
seal this 18th day of December
[SEAL]
Signed, sealed and delivered F. I. P. CORPORATION
in the presence of:
By /s/ Stanley D Fisher
/s/ David M. Levin ------------------------
- ------------------ Its President
David M. Levin Stanley D Fisher
/s/ [ILLEGIBLE]
- -------------------
[ILLEGIBLE]
- 4 -
<PAGE>
VO. 242 PAGE 223
STATE OF CONNECTICUT )
) ss.: Hartford, December 18, 1974
COUNTY OF HARTFORD )
On this 18th day of December, 1974, before me, David M. Levin, the
undersigned officer, personally appeared Stanley D. Fisher, who acknowledged
himself to be the President of F. I. P. CORPORATION, a corporation, and that he,
as such President being authorized so to do, executed the foregoing instrument
for the purposes therein contained, by signing the name of the corporation by
himself as
In Witness Whereof, I hereunto set my hand.
/s/ David M. Levin
------------------------------
David M. Levin
Commissioner of the Superior Court
[ILLEGIBLE]
- 5 -
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 27, 1999
included in Alexion Pharmaceuticals, Inc.'s Form 10-K/A for the year ended July
31, 1999 and to all references to our Firm included in this registration
statement.
/s/ ARTHUR ANDERSEN LLP
Hartford, Connecticut
May 8, 2000
II-7
<PAGE>
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
----------------------------------------
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
ALEXION PHARMACEUTICALS, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-3648318
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
23 SCIENCE PARK
NEW HAVEN, CONNECTICUT 06511
(Address of principal executive offices) (Zip Code)
---------------------------------------------
5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2007
(Title of the indenture securities)
-------------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 4th. day of May 2000.
THE CHASE MANHATTAN BANK
By /s/ Kathleen Perry
----------------------------
Kathleen Perry
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1999, in
in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................................ $ 13,271
Interest-bearing balances .................................... 30,165
Securities: ......................................................
Held to maturity securities........................................ 724
Available for sale securities...................................... 54,770
Federal funds sold and securities purchased under
agreements to resell ......................................... 26,694
Loans and lease financing receivables:
Loans and leases, net of unearned income...................... $132,814
Less: Allowance for loan and lease losses..................... 2,254
Less: Allocated transfer risk reserve ........................ 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ....................................... 130,560
Trading Assets .................................................... 53,619
Premises and fixed assets (including capitalized
leases)....................................................... 3,359
Other real estate owned ........................................... 29
Investments in unconsolidated subsidiaries and
associated companies.......................................... 186
Customers' liability to this bank on acceptances
outstanding .................................................. 608
Intangible assets ................................................. 3,659
Other assets ...................................................... 14,554
--------
TOTAL ASSETS ...................................................... $332,198
========
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices .......................................... $102,421
Noninterest-bearing .......................................... $41,580
Interest-bearing ............................................. 60,841
In foreign offices, Edge and Agreement
subsidiaries and IBF's ....................................... 108,233
Noninterest-bearing ............................................... $ 6,061
Interest-bearing ............................................. 102,172
Federal funds purchased and securities sold under agree-
ments to repurchase ............................................... 47,425
Demand notes issued to the U.S. Treasury .......................... 100
Trading liabilities ............................................... 33,626
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ................ 3,964
With a remaining maturity of more than one year
through three years.................................... 14
With a remaining maturity of more than three years.......... 99
Bank's liability on acceptances executed and outstanding 608
Subordinated notes and debentures ................................. 5,430
Other liabilities ................................................. 11,886
TOTAL LIABILITIES ................................................. 313,806
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock ...................................................... 1,211
Surplus (exclude all surplus related to preferred stock)... 11,066
Undivided profits and capital reserves ............................ 7,376
Net unrealized holding gains (losses)
on available-for-sale securities .................................. (1,277)
Accumulated net gains (losses) on cash flow hedges................. 0
Cumulative foreign currency translation adjustments ............... 16
TOTAL EQUITY CAPITAL .............................................. 18,392
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .............................. $332,198
=========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WILLIAM B. HARRISON, JR. )
HELENE L. KAPLAN ) DIRECTORS
HENRY B. SCHACHT )
-5-
