EXHIBIT 10.2
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (the "Pledge Agreement") is made and entered into
as of August 5, 2002, by and among SCIOS INC., a Delaware corporation (the
"Pledgor"), having its principal office at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, XXXXX FARGO BANK, NATIONAL ASSOCIATION, in its capacity as
trustee (the "Trustee") for the holders from time to time (the "Holders") of the
Securities (as defined herein), issued by the Pledgor under the Indenture
referred to below, and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as collateral
agent for the Trustee and the Holders (the "Collateral Agent"). Capitalized
terms used and not defined in this Pledge Agreement have the meanings set forth
or referred to in the Indenture (as defined below).
WITNESSETH
WHEREAS, the Pledgor and X.X. Xxxxxx Securities Inc., Xxxxxx Brothers
Inc., XX Xxxxx Securities Corporation, Xxxxxxx & Company, Inc., Xxxxx, Xxxxxxxx
& Xxxx, Inc. and Prudential Securities Incorporated (collectively, the "Initial
Purchasers") are parties to a Purchase Agreement, dated as of July 30, 2002 (the
"Purchase Agreement"), pursuant to which the Pledgor will issue and sell
Initial Purchasers $150,000,000 aggregate principal amount of 5.50% Convertible
Subordinated Notes due 2009 (the "Initial Securities") and pursuant to which the
Pledgor has granted to the Initial Purchasers options to purchase all or any
part of up to an additional $25,000,000 aggregate principal amount of the
Securities (the "Option Securities" and together with the Initial Securities,
the "Securities");
WHEREAS, the Pledgor and the Trustee have entered into that certain
indenture, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Pledgor is issuing the Initial Securities on the date hereof;
WHEREAS, the Pledgor is the beneficial owner of security entitlements
(the "Pledged Security Entitlements") with respect to (i) the United States
Treasury securities identified by CUSIP number in SCHEDULE I hereto, and
credited to the Pledgor's account with Xxxxx Fargo Bank, National Association
(the "Account Holder"), ABA No. 000000000, CR: Corporate Trust Clearing, A/C:
0000000000, FFC: Scios Inc. A/C: 12948301 at its office at 00 Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, in the name of Xxxxx Fargo Bank, National
Association, as Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders of the 5.50% Convertible Subordinated Notes due 2009 of
Scios Collateral Pledge Account" (the "Pledge Account") and (ii) all other
financial assets credited from time to time to the Pledge Account (collectively
with the assets described in clause (i) above, the "Pledged Financial Assets");
WHEREAS, to secure the obligations of the Pledgor under this Pledge
Agreement, the Registration Rights Agreement, the Indenture and the Securities
to pay in full each of the first six scheduled interest payments on the
Securities when due and to secure repayment of a portion of the principal,
premium (if any) and interest on the Securities in the event that the Securities
become due and payable prior to such time as the first six scheduled interest
payments thereon shall have been paid in full (collectively, the "Obligations"),
the Pledgor has agreed to pledge to
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the Collateral Agent for the benefit of the Trustee and the ratable benefit of
the Holders of the Securities, a security interest in the Collateral (as defined
herein) securing the payment and performance by the Pledgor of all of the
Obligations;
WHEREAS, it is a condition precedent to the initial purchase of the
Securities by the Initial Purchasers thereof that the Pledgor shall have
executed and delivered this Pledge Agreement; and
WHEREAS, unless otherwise defined herein or in the Indenture, terms
used in Article 8 or 9 of the Uniform Commercial Code as in effect in the State
of New York ("UCC") and/or in the Federal Book Entry Regulations (as defined
below) are used in this Pledge Agreement as such terms are defined in such
Article 8 or 9 and/or the Federal Book Entry Regulations. The term "Federal Book
Entry Regulations" means (a) the federal regulations contained in Subpart B
("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry
securities consisting of U.S. Treasury bonds, notes and bills and Subpart D
("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R. Section 357.2,
Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44
and (b) to the extent substantially identical to the federal regulations
referred to in clause (a) above (as in effect from time to time), the federal
regulations governing other book-entry securities.
AGREEMENT
NOW, THEREFORE, in consideration of the premises herein contained, and
in order to induce the Holders of the Securities to purchase the Securities, the
Pledgor hereby agrees with the Collateral Agent, for the benefit of the Trustee
and for the ratable benefit of the Holders of the Securities, as follows:
SECTION 1. Pledge and Grant of Security Interest. The Pledgor hereby
pledges to the Collateral Agent, for the benefit of the Trustee and the ratable
benefit of the Holders of the Securities, and hereby grants to the Collateral
Agent, a security interest and continuing lien in, all of the Pledgor's right,
title and interest in and to the following, in each case, whether now owned or
hereafter acquired by the Pledgor, wherever located and whether now or hereafter
existing or arising (hereinafter collectively referred to as the "Collateral"):
(a) the Pledged Financial Assets and the certificates, if
any, representing the Pledged Financial Assets, and all dividends, interest,
money (as defined in the UCC), instruments (as defined in the UCC, the
"Instruments") and other property from time to time received, receivable or
otherwise distributed or distributable in respect of or in exchange for any or
all of such Pledged Financial Assets;
(b) the Pledge Account and all security entitlements with
respect thereto, all Pledged Security Entitlements with respect to all Pledged
Financial Assets from time to time credited to the Pledge Account, any and all
securities accounts in which the Pledged Security Entitlements are carried, and
all dividends, interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed or distributable in respect of or
in exchange for any or all of such Pledged Security Entitlements;
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(c) all other securities, securities entitlements and other
financial assets hereafter acquired by the Pledgor pursuant to Article 11 of the
Indenture; and
(d) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a), (b) and (c) of this Section 1) and, to the extent not
otherwise included, all cash.
SECTION 2. Security for Obligations. This Pledge Agreement secures,
and the Collateral is collateral security for, the prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or
otherwise) of all the Obligations or other obligations of the Pledgor, whether
for principal, interest, fees or otherwise, now or hereafter existing, under
this Pledge Agreement, the Securities, the Registration Rights Agreement and the
Indenture (all such obligations being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Pledge Agreement secures, and the
Collateral is collateral security for, the payment of all amounts that
constitute part of the Secured Obligations and would be owed by the Pledgor to
the Collateral Agent, the Trustee or the Holders under this Pledge Agreement,
the Securities, the Registration Rights Agreement and the Indenture but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.
SECTION 3. Maintaining the Pledge Account. So long as any Secured
Obligation shall remain outstanding:
(a) The Pledgor will maintain separately the Pledge Account with
Xxxxx Fargo Bank, National Association.
(b) Notwithstanding any term or condition to the contrary in any
other agreement relating to the Pledge Account, and except as otherwise provided
by the provisions of Section 5 and Section 18 hereof, no funds shall be paid or
released to or for the account of, or withdrawn by or for the account of, the
Pledgor or any other Person from the Pledge Account.
The Pledge Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect.
SECTION 4. Delivery of Collateral.
(a) All cash, certificates or instruments representing or
evidencing the Pledged Financial Assets, the Pledged Security Entitlements or
the Pledge Account shall be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, at any time in its discretion
and without notice to the Pledgor, to transfer to or to register in the name of
the Collateral Agent or any of its nominees any or all of the Collateral. In
addition, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing any or all of the
Collateral for certificates or instruments of smaller or larger denominations.
Also, the Collateral Agent shall have the right at any time to convert
Collateral consisting of financial assets credited to the
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Pledge Account to Collateral consisting of financial assets held directly by the
Collateral Agent, and to convert Collateral consisting of financial assets held
directly by the Collateral Agent to Collateral consisting of financial assets
credited to the Pledge Account.
(b) With respect to any Collateral in which the Pledgor has any
right, title or interest and that constitutes an uncertificated security, the
Pledgor shall cause the issuer thereof either (i) to register the Collateral
Agent as the registered owner of such security or (ii) to agree in writing with
the Pledgor and the Collateral Agent that such issuer will comply with
instructions with respect to such security originated by the Collateral Agent
without further consent of the Pledgor, such agreement to be in form and
substance satisfactory to the Collateral Agent.
(c) With respect to any Collateral in which the Pledgor has any
right, title or interest and that constitutes a security entitlement, the
Pledgor shall cause the securities intermediary with respect to such security
entitlement either (i) to identify in its records the Collateral Agent as the
entitlement holder of such security entitlement against such securities
intermediary or (ii) to agree in writing with the Pledgor and the Collateral
Agent that such securities intermediary will comply with entitlement orders
(that is, notifications communicated to such securities intermediary directing
transfer or redemption of the financial asset to which the Pledgor has a
security entitlement) originated by the Collateral Agent without further consent
of the Pledgor, such agreement to be in substantially the form of ANNEX A hereto
or otherwise in form and substance satisfactory to the Collateral Agent.
(d) With respect to any Collateral that constitutes a securities
account, the Pledgor will comply with subsection (c) of this Section 4 with
respect to all security entitlements carried in such securities account.
(e) Prior to or concurrently with the execution and delivery
hereof and prior to the transfer to the Collateral Agent of the Pledged Security
Entitlements, as provided in subsections (a) through (c) of this Section 4, the
Collateral Agent shall establish the Pledge Account with Xxxxx Fargo Bank,
National Association. Upon transfer of the Pledged Financial Assets to the
Collateral Agent, as confirmed to the Collateral Agent by the securities
intermediary, the Collateral Agent shall make appropriate book entries
indicating that the Pledged Financial Assets have been credited to and are held
in the Pledge Account. Subject to the other terms and conditions of this Pledge
Agreement, all funds or other property held by the Collateral Agent pursuant to
this Pledge Agreement shall be held in the Pledge Account subject (except as
expressly provided in Sections 5(a), (b) and (c) hereof) to the exclusive
dominion and control of the Collateral Agent and exclusively for the benefit of
the Trustee and the ratable benefit of the Holders of the Securities and
segregated from all other funds or other property otherwise held by the
Collateral Agent.
(f) All Collateral shall be retained in the Pledge Account
pending disbursement pursuant to the terms hereof.
(g) Concurrently with the execution and delivery of this Pledge
Agreement, the Collateral Agent, the Trustee and the Account Holder is
delivering to the Pledgor a duly
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executed Control Agreement (the "Control Agreement"), in the form of ANNEX A
attached hereto.
(h) Concurrently with the execution and delivery of this Pledge
Agreement, the Collateral Agent is delivering, and concurrently with the
execution of any supplement to this Pledge Agreement, the Collateral Agent will
deliver, to the Pledgor and the Initial Purchasers, a duly executed certificate,
in the form of ANNEX B attached hereto, of an officer of the Collateral Agent.
(i) Concurrently with the execution and delivery of this Pledge
Agreement, the Pledgor is delivering to the Collateral Agent acknowledgment
copies or stamped receipt copies of proper financing statements, duly filed on
or before the Closing Date under the UCC, covering the Collateral described in
this Pledge Agreement.
SECTION 5. Disbursements.
(a) At least three Business Days prior to the due date of any of
the first six scheduled interest payments on the Securities, the Pledgor may,
pursuant to written instructions given by the Pledgor to the Collateral Agent
(an "Issuer Order"), direct the Collateral Agent to release from the Pledge
Account and pay to the Holders of the Securities proceeds sufficient to provide
for payment in full of such interest then due on the Securities. Upon receipt of
an Issuer Order, the Collateral Agent will (i) issue a Payment Order (as defined
in the Control Agreement) to the Account Holder for the release from the Pledge
Account funds to the Collateral Agent in an amount sufficient to provide for the
payment of the interest on the Securities in accordance with such Issuer Order
and (ii) pay such funds to the Holders of the Securities in accordance with the
Indenture and the Securities. Nothing in this Section 5 shall affect the
Collateral Agent's rights to apply the Collateral to the payments of amounts due
on the Securities upon acceleration thereof.
(b) If the Pledgor makes any of the first six scheduled interest
payments on the Securities or portion of such an interest payment from a source
of funds other than the Pledge Account ("Pledgor Funds"), the Pledgor may, after
payment in full of such interest payment, direct the Collateral Agent pursuant
to an Issuer Order to issue a Payment Order (as defined in the Control
Agreement) to the Account Holder for the release to the Pledgor or to another
party at the direction of the Pledgor (the "Pledgor's Designee") proceeds from
the Pledge Account in an amount less than or equal to the amount of Pledgor
Funds applied to such interest payment. Upon receipt by the Collateral Agent of
such Issuer Order and provided the Collateral Agent has received such interest
payment, the Collateral Agent shall direct the Account Holder pursuant to a
Payment Order to pay over to the Pledgor or the Pledgor's Designee, as the case
may be, the requested amount from proceeds in the Pledge Account as soon as
practicable.
(c) At least three Business Days prior to the due date of each
of the first six scheduled interest payments on the Securities, the Pledgor
shall give the Collateral Agent notice (by Issuer Order) as to whether such
interest payment will be made pursuant to Section 5(a) or 5(b) above and the
respective amounts of interest that will be paid from the Pledge Account and
from Pledgor Funds. Any Pledgor Funds to be used to make any interest payment
shall be delivered to the Collateral Agent, in immediately available funds,
prior to 10:00 a.m. (New York
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time) on such interest payment date. If no such notice is given or such Pledgor
Funds have not been so delivered, the Collateral Agent will act pursuant to
Section 5(a) above as if it had received an Issuer Order pursuant thereto for
the payment in full of the interest then due from the Pledge Account.
(d) The Collateral Agent shall instruct the Account Holder to
liquidate Collateral in the Pledge Account (pursuant to written instructions
from Pledgor) in order to make any of the scheduled payments of interest on the
Securities, unless there are sufficient funds in the Pledge Account on such
interest payment date. The Collateral Agent shall be entitled to instruct the
Account Holder to sell any Collateral as contemplated hereunder prior to the
maturity of such Collateral and shall not be responsible for any costs and
expenses of such sale.
(e) Nothing contained in this Pledge Agreement shall (i) afford
the Pledgor any right to issue entitlement orders with respect to any of the
Pledged Security Entitlements or any securities account in which any such
security entitlement may be carried, or otherwise afford the Pledgor control of
any Pledged Security Entitlement or (ii) otherwise give rise to any rights of
the Pledgor with respect to the Pledged Financial Assets or any securities
account in which any such security entitlement may be carried, other than the
Pledgor's rights under this Pledge Agreement as the beneficial owner of
collateral pledged to and subject to the exclusive dominion and control (except
as expressly provided in Sections 5(a) and (b) hereof) of the Collateral Agent
in its capacity as such (and not as a securities intermediary) before the
payment in full, when due, of the Obligations. The Pledgor acknowledges,
confirms and agrees that the Collateral Agent is an entitlement holder of the
Pledged Security Entitlements solely as Collateral Agent for the benefit of the
Trustee and the ratable benefit of the Holders of the Securities and not as a
securities intermediary.
SECTION 6. Investing of Amounts in the Pledge Account. If requested
and as directed by the Pledgor, the Collateral Agent will, subject to the
provisions of Sections 3, 5 and 14 of this Pledge Agreement, from time to time,
instruct the Account Holder to invest interest paid on the Pledged Financial
Assets and reinvest other proceeds of any Pledged Financial Assets that may
mature or be sold, in each case, in (i) identified United States Treasury
securities or (ii) selected shares of a money market fund registered under the
Investment Company Act of 1940, as amended, the portfolio of which consists of
United States Treasury securities, in each case credited to the Pledge Account.
SECTION 7. Representations and Warranties.
(a) The Pledgor hereby represents and warrants that:
(1) This Pledge Agreement has been duly authorized,
validly executed and delivered by the Pledgor and (assuming the due
authorization and valid execution and delivery of this Pledge Agreement by each
of the Trustee and the Collateral Agent and the enforceability of this Pledge
Agreement against each of the Trustee and the Collateral Agent in accordance
with its terms) constitutes a valid and binding agreement of the Pledgor,
enforceable against the Pledgor in accordance with its terms, except as (i) the
enforceability hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, preference, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting creditors' rights or
6.
remedies generally, (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability and the discretion of the court
before which any proceeding therefore may be brought, (iii) the exculpation
provisions and rights to indemnification hereunder may be limited by U.S.
federal and state securities laws and public policy considerations and (iv) the
waiver of rights and defenses contained in Section 12(b), Section 19.8 and
Section 19.13 hereof may be limited by applicable law.
(2) The Pledgor's exact legal name, as provided in
Section 9-503(a)(1) of the UCC, is Scios Inc. The Pledgor is located (within the
meaning of Section 9-307 of the UCC) in the State of Delaware.
(3) The Pledgor is the legal and beneficial owner of the
Collateral free and clear of any Lien, claim, option or right of others (except
for the security interests created by this Pledge Agreement). No effective
financing statement or instrument similar in effect covering all or any part of
the Collateral is on file in any public or recording office, other than the
financing statements filed pursuant to this Pledge Agreement.
(4) Upon the delivery of the Collateral in accordance
with the terms hereof, all filings and other actions (including, without
limitation, (A) actions necessary to obtain control of the Collateral as
provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and (B) actions
necessary to perfect the Collateral Agent's security interest with respect to
the Collateral evidenced by a certificate of ownership) necessary to perfect the
security interest in the Collateral created under this Pledge Agreement have
been duly made or taken and are in full force and effect, and this Pledge
Agreement creates in favor of the Collateral Agent for the benefit of the
Trustee and the ratable benefit of the Holders of the Securities a valid and,
together with such filings and other actions, perfected first priority security
interest in the Collateral, securing the payment of the Secured Obligations.
(5) The execution and delivery by the Pledgor of, and
the performance by the Pledgor of its obligations under, this Pledge Agreement
will not contravene any provision of applicable law or the Certificate of
Incorporation of the Pledgor or any material agreement or other material
instrument binding upon the Pledgor or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Pledgor, or
result in the creation or imposition of any Lien on any assets of the Pledgor,
except for the security interests granted under this Pledge Agreement.
(6) No consent of any other person and no approval,
authorization, order of, action by notice to, filing or qualification with, any
governmental authority, regulatory body, agency or other third party is required
for (i) the grant by the Pledgor of the assignment, pledge and security interest
granted under this Pledge Agreement, (ii) the execution or delivery by the
Pledgor of, or the performance by the Pledgor of its obligations under, this
Pledge Agreement, (iii) the perfection or maintenance of the assignment, pledge
and security interest created hereunder (including the first priority nature of
such assignment, pledge or security interest), or (iv) except for such consents,
approvals, authorizations or orders required to be obtained by the Collateral
Agent (or the Holders) for reasons other than the consummation of this
transaction, for the exercise by the Collateral Agent of its voting or other
rights provided for in this Pledge Agreement or the remedies in respect of the
Collateral pursuant to this Pledge
7.
Agreement, except as may be required in connection with the disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally.
(7) There are no legal or governmental proceedings
pending or, to the best of the Pledgor's knowledge, threatened to which the
Pledgor or any of the properties of the Pledgor is subject that would materially
adversely affect the power or ability of the Pledgor to perform its obligations
under this Pledge Agreement or to consummate the transactions contemplated
hereby.
(8) The pledge of the Collateral pursuant to this Pledge
Agreement is not prohibited by law or governmental regulation (including,
without limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System) applicable to the Pledgor.
(9) No Event of Default (as defined below) exists.
(10) The jurisdiction (for purposes of Section 8-110(e)
of the UCC) of the securities intermediary that maintains the Pledge Account and
all securities accounts carrying the Pledged Security Entitlements is New York.
(b) The Collateral Agent hereby represents and warrants that:
(1) This Pledge Agreement has been duly authorized,
validly executed and delivered by the Collateral Agent and (assuming the due
authorization and valid execution and delivery of this Pledge Agreement by each
of the Trustee and the Pledgor and the enforceability of this Pledge Agreement
against each of the Trustee and the Pledgor in accordance with its terms)
constitutes a valid and binding agreement of the Collateral Agent, enforceable
against the Collateral Agent in accordance with its terms, except as the
availability of equitable remedies may be limited by equitable principles of
general applicability and the discretion of the court before which any
proceeding therefore may be brought.
(2) The execution and delivery by the Collateral Agent
of, and the performance by the Collateral Agent of its obligations under, this
Pledge Agreement will not contravene any provision of applicable law or its
organizational documents or any material agreement or other material instrument
binding upon the Collateral Agent or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Collateral
Agent.
(3) No consent of any other person and no approval,
authorization, order of, action by notice to, filing or qualification with, any
governmental authority, regulatory body, agency or other third party is required
for (i) the execution or delivery by the Collateral Agent of, or the performance
by the Collateral Agent of its obligations under, this Pledge Agreement, or (ii)
except for such consents, approvals, authorizations or orders required to be
obtained by the Collateral Agent (or the Holders) for reasons other than the
consummation of this transaction, for the exercise by the Collateral Agent of
its voting or other rights provided for in this Pledge Agreement or the remedies
in respect of the Collateral pursuant to this Pledge Agreement, except as may be
required in connection with the disposition of any portion of the Collateral by
laws affecting the offering and sale of securities generally.
8.
(4) There are no legal or governmental proceedings
pending or, to the best of the Collateral Agent's knowledge, threatened to which
the Collateral Agent or any of the properties of the Collateral Agent is subject
that would materially adversely affect the power or ability of the Collateral
Agent to perform its obligations under this Pledge Agreement or to consummate
the transactions contemplated hereby.
SECTION 8. Further Assurances.
(a) The Pledgor agrees that from time to time, at the expense of
the Pledgor, the Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary,
or that the Collateral Agent may reasonably request, in order to perfect and
protect any pledge or security interest granted or purported to be granted
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Pledgor will: (i) if any Collateral shall be
evidenced by a promissory note or other instrument, deliver and pledge to the
Collateral Agent hereunder such note or instrument, duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Agent; (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the pledge and
security interest granted or purported to be granted hereby; (iii) deliver and
pledge to the Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders of the Securities certificates representing Collateral
that constitutes certificated securities, accompanied by undated stock or bond
powers executed in blank; and (iv) deliver to the Collateral Agent evidence that
all other action that the Collateral Agent may deem reasonably necessary or
desirable in order to perfect and protect the security interest created by
Pledgor under this Pledge Agreement has been taken.
(b) The Pledgor hereby authorizes the Collateral Agent to file
one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more financing statements indicating that
such financing statements cover all assets or all personal property (or words of
similar effect), in each case without the signature of the Pledgor, and
regardless of whether any particular asset described in such financing
statements falls within the scope of UCC or the granting clause of this Pledge
Agreement. A photocopy or other reproduction of this Pledge Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. The Pledgor ratifies
its authorization for the Collateral Agent to have filed such financing
statements, continuation statements or amendments filed prior to the date
hereof.
(c) The Pledgor will furnish to the Collateral Agent from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.
(d) The Pledgor will promptly pay all reasonable costs incurred
in connection with any of the foregoing within 30 days of receipt of an invoice
therefor. The Pledgor also agrees, whether or not requested by the Collateral
Agent, to take all actions that are necessary to
9.
perfect or continue the perfection of, or to protect the first priority of, the
Collateral Agent's security interest in and to the Collateral, including the
filing of all necessary financing and continuation statements, and to protect
the Collateral against the rights, claims or interests of third persons (other
than any such rights, claims or interests created by or arising through the
Collateral Agent).
SECTION 9. Covenants. The Pledgor covenants and agrees with the
Collateral Agent for the benefit of the Trustee and ratable benefit of the
Holders of the Securities that from and after the date of this Pledge Agreement
until the earlier of payment in full in cash of (x) the Obligations when due
under the terms of the Indentures or (y) all obligations due and owing under the
Indenture and the Securities in the event such obligations become due and
payable prior to the payment of the first six scheduled interest payments on the
Securities:
(a) that (A) it will not (and will not purport to) sell, assign
or otherwise dispose of, or grant any option or warrant with respect to, any of
the Collateral or its beneficial interest therein, and (B) it will not create or
suffer to exist any Lien or other adverse interest upon or with respect to any
of the Collateral or its beneficial interest therein (except for the security
interests granted under this Pledge Agreement and any Lien arising under the
Indenture in favor of the Collateral Agent);
(b) that it will not (A) enter into any agreement or
understanding that restricts or inhibits or purports to restrict or inhibit the
Collateral Agent's rights or remedies hereunder, including, without limitation,
the Collateral Agent's right to sell or otherwise dispose of the Collateral or
(B) fail to pay or discharge any tax, assessment or levy of any nature with
respect to its beneficial interest in the Collateral not later than five days
prior to the date of any proposed sale under any judgment, writ or warrant of
attachment with respect to such beneficial interest;
(c) that it will not change its name, type of organization,
jurisdiction of organization, organizational identification number or location
from those set forth in Section 7(a)(2) hereof without first giving at least 30
days' prior written notice to the Collateral Agent and taking all action
reasonably required by the Collateral Agent under this Pledge Agreement for the
purpose of perfecting or protecting the security interest granted by this Pledge
Agreement;
(d) that it will, and cause the Collateral Agent and the Trustee
to, execute and deliver on or prior to any sale of Option Securities, a
supplement to this Pledge Agreement, in substantially the form attached hereto
as ANNEX C, providing for the pledge of additional Collateral to secure all
Obligations in respect of the Option Securities; and
(e) that it agrees with the Collateral Agent for the benefit of
the Trustee and the ratable benefit of the Holders of the Securities that in the
event of a Registration Default, as defined in the Registration Rights
Agreement, and the interest rate on the Securities is increased as provided in
the Registration Rights Agreement, the Pledgor shall, as promptly as
practicable, deliver free to the Collateral Agent additional Pledged Security
Entitlements in such amount as will be sufficient upon receipt of scheduled
interest and/or principal payments of all Pledged Security Entitlements
thereafter held in the Pledge Account, in the opinion of a nationally recognized
firm of independent public accountants selected by the Pledgor, to provide
payment
10.
for the first six scheduled interest payments due on the Securities (assuming
the additional interest requirement remains in effect for the entire period).
The additional Pledged Security Entitlements shall be pledged by the Pledgor to
the Collateral Agent for the benefit of the Trustee and the ratable benefit of
the Holders and shall be held by the Collateral Agent in the Pledge Account.
SECTION 10. Power of Attorney. In addition to all of the powers
granted to the Collateral Agent pursuant to the Indenture, the Pledgor hereby
irrevocably appoints the Collateral Agent as the Pledgor's attorney-in-fact
(with full power of substitution), with full authority in the place and stead of
the Pledgor and in the name of the Pledgor or otherwise, from time to time in
the Collateral Agent's discretion, to take any action and to execute any
instrument that is necessary or advisable or as the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including:
(a) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above;
(c) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral; and
(d) to pay or discharge taxes or Liens levied or placed upon the
Collateral that the Pledgor has failed to pay or discharge in accordance
herewith, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Collateral Agent in its sole
reasonable discretion, and such payments made by the Collateral Agent to become
part of the Obligations of the Pledgor to the Collateral Agent, due and payable
immediately upon demand;
provided, however, that the Collateral Agent shall have no obligation to perform
any of the foregoing actions. The Collateral Agent's authority under this
Section 10 shall include, without limitation, the authority to endorse and
negotiate any checks or instruments representing proceeds of Collateral in the
name of the Pledgor, execute and give receipt for any certificate of ownership
or any document constituting Collateral, transfer title to any item of
Collateral, sign the Pledgor's name on all financing statements (to the extent
permitted by applicable law) or any other documents deemed necessary or
appropriate by the Collateral Agent to preserve, protect or perfect the security
interest in the Collateral granted hereunder and to file the same, prepare, file
and sign the Pledgor's name on any notice of Lien, and to take any other actions
arising from or incident to the powers granted to the Collateral Agent in this
Pledge Agreement. This power of attorney is coupled with an interest and is
irrevocable by the Pledgor.
SECTION 11. No Assumption of Duties; Reasonable Care. The powers
conferred on the Collateral Agent hereunder are solely to protect the security
interest of the Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders of the Securities in the
11.
Collateral and shall not impose any duty on the Collateral Agent to exercise any
such powers other than those expressly provided herein or imposed by applicable
law. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral as to (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters, (ii) taking of any necessary steps
to preserve rights against any parties or any other rights pertaining to any
Collateral or (iii) except as otherwise set forth in Section 6 hereof, investing
or reinvesting any of the Collateral or any loss on any investment; provided
however, that in the case of clause (i) and clause (ii) of the sentence, nothing
contained in this Pledge Agreement shall relieve the Collateral Agent of any
responsibilities in its capacity as securities intermediary. The Collateral
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own property. The
Collateral Agent shall be entitled to all the rights, benefits, privileges and
immunities accorded to it under the Indenture.
SECTION 12. Indemnity and Expenses.
(a) The Pledgor agrees to indemnify, defend and save and hold
harmless each the Collateral Agent and the Trustee and its officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or resulting from this
Pledge Agreement (including, without limitation, enforcement of this Pledge
Agreement), except to the extent such claim, damage, loss, liability or expense
results from such Indemnified Party's bad faith, gross negligence or willful
misconduct.
(b) The Pledgor will upon demand pay to the Collateral Agent and
the Trustee the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees and expenses of its counsel and of any experts
and agents, that such party may incur in connection with (i) the review,
negotiation and administration of this Pledge Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon, any
of the Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent, the Trustee or the Holders of the Securities hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
SECTION 13. Remedies. If any Event of Default under the Indenture
or default hereunder (any such Event of Default or default being referred to in
this Pledge Agreement as an "Event of Default") shall have occurred and be
continuing:
(a) The Collateral Agent, the Trustee and the Holders of the
Securities may exercise in respect of the Collateral, in addition to all other
rights and remedies given by law or by this Pledge Agreement or the Indenture,
all of the rights and remedies of a secured party under the UCC (whether or not
the UCC applies to the affected Collateral) and also may: (i) require the
Pledgor to, and the Pledgor hereby agrees that it will at its expense and upon
request
12.
of the Collateral Agent forthwith, assemble all or part of the Collateral as
directed by the Collateral Agent and make it available to the Collateral Agent
at a place and time to be designated by the Collateral Agent that is reasonably
convenient to both parties and (ii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at any broker's
board or at public or private sale, in one or more sales or lots, at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Pledgor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. The purchaser of any or all Collateral so sold shall thereafter hold
the same absolutely, free from any claim, encumbrance or right of any kind
whatsoever created by or through the Pledgor. Any sale of the Collateral
conducted in conformity with reasonable commercial practices of banks, insurance
companies, commercial finance companies, or other financial institutions
disposing of property similar to the Collateral shall be deemed to be
commercially reasonable. The Collateral Agent, the Trustee or any Holder of
Securities may, in its own name or in the name of a designee or nominee, buy any
of the Collateral at any public sale and, if permitted by applicable law, at any
private sale. All expenses (including court costs and reasonable attorneys'
fees, expenses and disbursements) of, or incident to, the enforcement of any of
the provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Collateral.
(b) Any cash held by or on behalf of the Collateral Agent and
all cash proceeds received by or on behalf of the Collateral Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent pursuant
to Section 12(b) of this Pledge Agreement) in whole or in part by the Collateral
Agent for the benefit of the Trustee and the ratable benefit of the Holders of
the Securities against, all or any part of the Secured Obligations in such order
as the Collateral Agent shall elect. Any surplus of such cash or cash proceeds
held by or on behalf of the Collateral Agent and remaining after payment in full
of all the Secured Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Collateral Agent may, without notice to the Pledgor
except as required by law and at any time or from time to time, charge, set off
and otherwise apply all or any part of the Secured Obligations against the
Pledge Account or any part thereof.
(d) The Pledgor agrees to (i) provide the Collateral Agent with
such information as may be necessary, or in the opinion of the Collateral Agent,
advisable to enable the Collateral Agent to effect the sale of the Collateral
and (ii) use its reasonable best efforts to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of all or
any portion of the Collateral pursuant to this Section 13 valid and binding and
in compliance with any and all other applicable requirements of law. The Pledgor
further agrees
13.
that a breach of any of the covenants contained in this Section 13(d) will cause
irreparable injury to the Collateral Agent, the Trustee and the Holders of the
Securities, that the Collateral Agent, the Trustee and the Holders of the
Securities have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 13(d) shall
be specifically enforceable against the Pledgor, and the Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.
(e) The Pledgor acknowledges the impossibility of ascertaining
the amount of damages that would be suffered by the Collateral Agent, the
Trustee or any Holders of the Securities by reason of the failure by the Pledgor
to perform any of the covenants contained in Section 13(d) above and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it will pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Collateral Agent shall
demand compliance with Section 13(d) above.
SECTION 14. Security Interest Absolute. All rights of the Collateral
Agent, the Trustee and the Holders of the Securities and the pledges,
assignments and security interests hereunder, and all obligations of the Pledgor
hereunder, shall be irrevocable, absolute and unconditional and the rights of
the Collateral Agent hereunder shall be enforceable irrespective of any or all
of the following:
(a) any lack of validity or enforceability of the Indenture
or Securities or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from the Indenture or Securities or
any other agreement or instrument relating thereto;
(c) any taking, exchange or release of, or non-perfection of any
Liens on, any Collateral or any other collateral for all or any of the Secured
Obligations;
(d) any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations, or
any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other assets of the
Pledgor;
(e) any change, restructuring or termination of the corporate
structure or existence of the Pledgor; or
(f) to the extent permitted by applicable law, any other
circumstance (including, without limitation, any statute of limitations) or any
existence of or reliance on any representation by the Collateral Agent, the
Trustee or any Holder of the Securities, which might otherwise constitute a
defense available to, or a discharge of, the Pledgor in respect of the Secured
Obligations or of this Pledge Agreement.
14.
This Pledge Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by the Collateral Agent, the Trustee or
any Holder of the Securities or by any other Person upon the insolvency,
bankruptcy or reorganization of the Pledgor or otherwise, all as though such
payment had not been made.
SECTION 15. Amendments, Waivers and Consents. (a) No amendment or
waiver of any provision of this Pledge Agreement, and no consent to any
departure by the Pledgor from any provision of this Pledge Agreement, shall in
any event be effective unless the same shall be in writing and signed by the
Collateral Agent and the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Collateral Agent, the Trustee or any Holder
of the Securities to exercise, and no delay in exercising any right hereunder,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right.
SECTION 16. Notices. Any notice or communication given hereunder
shall be sufficiently given if in writing and delivered in person or mailed by
first class mail, commercial courier service or telecopier communication,
addressed as follows; or, as to any party, at such other address as shall be
designated by such party in a written notice to the other parties:
if to the Pledgor:
Scios Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
if to the Trustee:
Xxxxx Fargo Bank, National Association
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Corporate Trust Department
With a copy to:
Xxxxx Fargo Bank, National Association
000 Xxxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Corporate Trust Department
15.
if to the Collateral Agent:
Xxxxx Fargo Bank, National Association
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Corporate Trust Department
With a copy to:
Xxxxx Fargo Bank, National Association
000 Xxxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Corporate Trust Department
All such notices and other communications shall, when mailed, delivered or
telecopied, respectively, be effective when deposited in the mails, delivered or
telecopied, respectively, addressed as aforesaid.
SECTION 17. Continuing Security Interest. This Pledge Agreement shall
create a continuing security interest in the Collateral and (a) shall, unless
otherwise provided in this Pledge Agreement, remain in full force and effect
until terminated in accordance with Section 18 hereof, (b) be binding upon the
Pledgor, its successors and assigns and (c) inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Trustee and
the Holders of the Securities and their respective successors, transferees and
assigns.
SECTION 18. Termination. So long as no Event of Default shall have
occurred and be continuing, this Pledge Agreement (other than Pledgor's
obligations under Section 12 hereof) shall terminate upon the earliest of (i)
the redemption of the Securities in whole, (ii) the payment in full of the
Obligations when due, or (iii) the discharge of the Indenture. Upon any such
termination, without any necessary action on the part of the Pledgor, (i) the
Control Agreement(s) will terminate and control of the Pledge Account and the
Pledged Security Entitlements shall revert to the Pledgor, (ii) the Collateral
Agent shall promptly obtain from the Account Holder and deliver to the Pledgor
all certificates and instruments representing any portion of the Pledged
Financial Assets constituting certificated securities and (iii) the Collateral
Agent shall no longer have any rights in any of the Collateral.
SECTION 19. Miscellaneous Provisions.
19.1 No Adverse Interpretation of Other Agreements. This Pledge
Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Pledge
Agreement.
19.2 Severability. The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such
16.
clause or provision, or part thereof, and shall not in any manner affect such
clause or provision in any other jurisdiction or any other clause or provision
of this Pledge Agreement in any jurisdiction.
19.3 Headings. The headings in this Pledge Agreement 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.
19.4 Counterpart Originals. This Pledge Agreement may be signed
in two or more counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Pledge Agreement by telecopier
shall be effective as delivery of an original executed counterpart of this
Pledge Agreement.
19.5 Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders of the Securities and the
Account Holder, any benefit or any legal or equitable right, remedy or claim
under this Pledge Agreement. If the Pledgor consolidates or merges into any
other Person, in a transaction in which the Pledgor is not the surviving
corporation, or conveys, transfers or leases its properties and assets
substantially as an entirety to, any person, then the successor entity shall
assume the Pledgor's obligations under this Pledge Agreement in writing.
19.6 Interpretation of Agreement. To the extent a term or
provision of this Pledge Agreement conflicts with the Indenture, the Indenture
shall control with respect to the subject matter of such term or provision.
Acceptance of or acquiescence in a course of performance rendered under this
Pledge Agreement shall not be relevant to determine the meaning of this Pledge
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.
19.7 Survival of Representations and Covenants. All
representations, warranties and covenants contained herein shall survive the
execution and delivery of this Pledge Agreement, and shall terminate only upon
the termination of this Pledge Agreement, except as otherwise specified in such
representatives, warranties and covenants.
19.8 Waivers. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
19.9 Authority of the Collateral Agent.
(a) The Collateral Agent shall have and be entitled to
exercise all powers hereunder that are specifically granted to the Collateral
Agent by the terms hereof, together with such powers as are reasonably incident
thereto. The Collateral Agent may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Except as otherwise expressly provided in this
Pledge Agreement
17.
or the Indenture, neither the Collateral Agent nor any director, officer,
employee, attorney or agent of the Collateral Agent shall be liable to the
Pledgor for any action taken or omitted to be taken by the Collateral Agent, in
its capacity as Collateral Agent, hereunder, except for its own bad faith, gross
negligence or willful misconduct, and the Collateral Agent shall not be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Collateral Agent and its
directors, officers, employees, attorneys and agents shall be entitled to rely
on any communication, instrument or document believed by it or them to be
genuine and correct and to have been signed or sent by the proper person or
persons.
(b) The Pledgor acknowledges that the rights and
responsibilities of the Collateral Agent and the Trustee under this Pledge
Agreement with respect to any action taken by the Collateral Agent or the
Trustee or the exercise or non-exercise by the Collateral Agent or the Trustee
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge Agreement shall, as between
the Collateral Agent or the Trustee and the Holders of the Securities, be
governed by the Indenture and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Collateral Agent or
Trustee and the Pledgor, the Collateral Agent or the Trustee shall be
conclusively presumed to be acting as agent for the Holders of the Securities
with full and valid authority so to act or refrain from acting, and the Pledgor
shall not be obligated or entitled to make any inquiry respecting such
authority.
19.10 Final Expression. This Pledge Agreement, together with the
Indenture and any other agreement executed in connection herewith, is intended
by the parties as a final expression of this Pledge Agreement and is intended as
a complete and exclusive statement of the terms and conditions thereof.
19.11 Rights of Holders of the Securities. No Holder of
Securities shall have any independent rights hereunder other than those rights
granted to individual Holders of the Securities pursuant to Section 6.6 of the
Indenture; provided that nothing in this subsection shall limit any rights
granted to the Collateral Agent or the Trustee under the Securities or the
Indenture.
19.12 Appointment of the Collateral Agent. The Trustee hereby
appoints the Xxxxx Fargo Bank, National Association as Collateral Agent, in
accordance with the terms and conditions set forth herein and Xxxxx Fargo Bank,
National Association hereby accepts such appointment.
19.13 Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Damages.
(a) This Pledge Agreement shall be governed by, and
construed in accordance with, the laws of the state of New York.
(b) The Pledgor agrees that each the Collateral Agent and
the Trustee shall, in its respective capacity as collateral agent and trustee or
in the name and on behalf of any Holder of Securities, have the right, to the
extent permitted by applicable law, to proceed against
18.
the Pledgor or the Collateral in a court in any location reasonably selected in
good faith (and having personal or in rem jurisdiction over the Pledgor or the
Collateral, as the case may be) to enable the Collateral Agent or the Trustee to
realize on the Collateral, or to enforce a judgment or other court order entered
in favor of the Collateral Agent or the Trustee. The Pledgor agrees that it will
not assert any counterclaims, setoffs or crossclaims in any proceeding brought
by the Collateral Agent or the Trustee to realize on such property or to enforce
a judgment or other court order in favor of the Collateral Agent of the Trustee,
except for such counterclaims, setoffs or crossclaims which, if not asserted in
any such proceeding, could not otherwise be brought or asserted. The Pledgor
waives any objection that it may have to the location of the court in the city
of New York once the Collateral Agent or the Trustee has commenced a proceeding
described in this paragraph including, without limitation, any objection to the
laying of venue or based on the grounds of forum non conveniens.
(c) The Pledgor agrees that neither any Holder of Securities
nor (except as otherwise provided in this Pledge Agreement or the Indenture),
the Collateral Agent nor the Trustee in its capacity as trustee shall have any
liability to the Pledgor (whether arising in tort, contract or otherwise) for
losses suffered by the Pledgor in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship established by
this Pledge Agreement, or any act, omission or event occurring in connection
therewith, unless it is determined by a final and nonappealable judgment of a
court that is binding on the Collateral Agent, the Trustee or such Holder of
Securities, as the case may be, that such losses were the result of acts or
omissions on the part of the Collateral Agent, the Trustee or such Holders of
Securities, as the case may be, constituting bad faith, gross negligence or
willful misconduct.
(d) To the extent permitted by applicable law, the Pledgor
waives the posting of any bond otherwise required of the Collateral Agent, the
Trustee or any Holder of Securities in connection with any judicial process or
proceeding to enforce any judgment or other court order pertaining to this
Pledge Agreement or any related agreement or document entered in favor of the
Collateral Agent, the Trustee or any Holder of Securities, or to enforce by
specific performance, temporary restraining order or preliminary or permanent
injunction, this Pledge Agreement or any related agreement or document between
the Pledgor on the one hand and the Collateral Agent, the Trustee and/or the
Holders of the Securities on the other hand.
[The remainder of this page intentionally left blank.]
19.
IN WITNESS WHEREOF, the Pledgor, the Collateral Agent and the Trustee
have each caused this Pledge Agreement to be duly executed and delivered as of
the date first above written.
PLEDGOR:
SCIOS INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------------------
Title: Chief Financial Officer
-------------------------------------------------
COLLATERAL AGENT:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Collateral Agent
By: /s/ Xxxxxx Mar
----------------------------------------------------
Name: Xxxxxx Mar
--------------------------------------------------
Title: Vice President, Authorized Officer
-------------------------------------------------
TRUSTEE:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Xxxxxx Mar
----------------------------------------------------
Name: Xxxxxx Mar
--------------------------------------------------
Title: Vice President, Authorized Officer
-------------------------------------------------
20.
SCHEDULE I
Pledged Financial Assets
Security Coupon Date CUSIP No.
U.S. Treasury Strips 2/15/03 000000XX0
U.S. Treasury Strip 8/15/03 000000XX0
U.S. Treasury Strip 2/15/04 000000XX0
U.S. Treasury Strip 8/15/04 000000XX0
U.S. Treasury Strip 2/15/05 000000XX0
U.S. Treasury Strip 8/15/05 000000XX0
1.
ANNEX A
CONTROL AGREEMENT
THIS CONTROL AGREEMENT (the "Agreement"), dated as of August 5, 2002,
by and among SCIOS INC. (the "Pledgor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION,
in its capacity as trustee (the "Trustee") for the Holders (as defined in the
Pledge Agreement referred to below), XXXXX FARGO BANK, NATIONAL ASSOCIATION, as
collateral agent for the Trustee and the Holders (the "Collateral Agent"), and
XXXXX FARGO BANK, NATIONAL ASSOCIATION, in its capacity as securities
intermediary and depository bank (the "Account Holder").
PRELIMINARY STATEMENTS:
(1) The Pledgor has granted the Collateral Agent a security interest
(the "Security Interest") in certain security entitlements (the "Pledged
Security Entitlements") with respect to certain U.S. Treasury securities (the
"Pledged Financial Assets") identified on SCHEDULE I attached hereto maintained
by the Collateral Agent with the Account Holder and carried from time to time in
an account with the Account Holder, ABA No. 000000000, CR: Corporate
Trust Clearing, A/C: 0000000000, FFC: Scios Inc. A/C: 12948301 at its office at
00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, in the name of "Xxxxx Fargo
Bank, National Association, as the Collateral Agent for the benefit of the
Trustee and the ratable benefit of the Holders of the 5.50% Convertible
Subordinated Notes due 2009 of Scios Inc., Collateral Pledge Account" (the
"Pledge Account") and all additions thereto and substitutions and proceeds
thereof (collectively, the "Collateral"), pursuant to, and as more particularly
described in, a Pledge Agreement dated as of August 5, 2002, by and among the
Pledgor, the Collateral Agent and the Trustee (as the same may hereafter be
amended, restated, supplemented or otherwise modified from time to time, the
"Pledge Agreement"; terms defined in the Pledge Agreement and not otherwise
defined herein are used herein as therein defined). The Pledgor acknowledges
having received value for such pledge of the Collateral.
(2) Terms defined in Article 8 or 9 of the Uniform Commercial Code as
in effect in the State of New York (the "UCC") are used in this Agreement
(including, without limitation, paragraph (1) above) as such terms are defined
in such Article 8 or 9. "FRB" means the Federal Reserve Bank or, as applicable,
a branch thereof. "FRB Account" means the FRB Member Securities Account
maintained in the name of the Collateral Agent by the FRB. "FRB Member" means
any person that is eligible to maintain (and that maintains) with the FRB one or
more FRB Member Securities Accounts in such person's name. "FRB Member
Securities Account" means, in respect of any person, the participant's
securities account maintained in the name of such person at the FRB, to which
account Government Securities held for such person are or may be credited.
(3) The Pledgor, the Collateral Agent, the Trustee and the Account
Holder are delivering this Agreement pursuant to the terms of the Pledge
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto hereby agree as follows:
1.
SECTION 1. Notice of Exclusive Control. The Pledgor, the Collateral
Agent and Trustee are entering into this Agreement to perfect, and confirm the
first priority lien of, the Collateral Agent's security interest in the
Collateral. The Account Holder agrees to promptly make all necessary entries or
notations in its books and records to reflect the Collateral Agent's security
interest in the Collateral and to apply any value distributed on account of any
Pledged Financial Assets as directed in writing by the Collateral Agent without
further consent from the Pledgor. The Account Holder acknowledges that the
Collateral Agent has exclusive control over the Pledge Account and all Pledged
Security Entitlements contained therein from time to time.
SECTION 2. The Account. The Account Holder represents and warrants to,
and agrees with, the Pledgor, the Collateral Agent, the Trustee and the Holders
of the Securities:
(a) That the Account Holder has established the Pledge
Account and shall not change the name or account number of the Pledge Account
without the prior written consent of the Collateral Agent;
(b) That the Account Holder maintains the Pledge Account for
the Collateral Agent, and all property (including, without limitation, all funds
and financial assets) held by the Account Holder for the account of the
Collateral Agent is, and will continue to be, credited to the Pledge Account;
(c) That, to the extent that funds are credited to the Pledge
Account, the Pledge Account is a deposit account; and to the extent that
financial assets are credited to the Pledge Account, the Pledge Account is a
securities account. The Account Holder is (i) the bank with which the Pledge
Account is maintained and (ii) the securities intermediary with respect to
financial assets held in the Pledge Account. The Collateral Agent is (x) the
Account Holder's customer with respect to the Pledge Account and (y) the
entitlement holder with respect to financial assets credited from time to time
to the Pledge Account;
(d) That all financial assets in registered form or payable
to or to the order of and credited to the Pledge Account shall be registered in
the name of, payable to or to the order of, or endorsed to, the Account Holder
and in no case during the term of the Pledge Agreement will any financial asset
credited to the Pledge Account be registered in the name of, payable to or to
the order of, or endorsed to, the Pledgor, except to the extent the foregoing
have been subsequently endorsed by the Pledgor to the Account Holder or in
blank;
(e) That, notwithstanding any other agreement to the
contrary, the Account Holder's jurisdiction with respect to the Pledge Account
for purposes of the UCC is, and will continue to be for so long as the Security
Interest shall be in effect, the State of New York;
(f) That the Account Holder does not know of any claim to or
interest in the Pledge Account or any property (including, without limitation,
all funds and financial assets) credited to the Pledge Account, except for
claims and interests of the parties referred to in this Agreement;
(g) That it is a commercial bank that in the ordinary course
of its business maintains securities accounts for others and is acting in that
capacity hereunder and with respect to the Pledge Account;
2.
(h) That it maintains the FRB Account with the FRB;
(i) That the Pledge Account shall be an account to which
funds or financial assets may be credited, and undertakes to treat the
Collateral Agent (in its capacity as such) as entitled to exercise rights that
comprise (and entitled to the benefits of) such funds or financial assets, and
entitled to exercise the rights of an entitlement holder in the manner
contemplated by the UCC;
(j) That, subject to applicable law, it has not granted, and
covenants that so long as it acts as a securities intermediary or bank hereunder
it shall not grant, control over or with respect to any Collateral credited to
any Pledge Account from time to time to any other person other than the
Collateral Agent (in its capacity as such);
(k) That it shall not, subject to applicable law, knowingly
take any action inconsistent with, and represents and covenants that it is not
and so long as this Agreement remains in effect will not knowingly become, party
to any agreement the terms of which are inconsistent with, the provisions of
this Agreement;
(l) That any item of property credited to the Pledge Account
shall be treated as funds or a financial asset;
(m) That any item of Collateral credited to the Pledge
Account shall not be subject to any security interest, lien or right of set-off
in favor of it as securities intermediary, except as may be expressly permitted
under the Indenture and the Pledge Agreement;
(n) To maintain the Pledge Account and maintained appropriate
books and records in respect thereof in accordance with its usual procedures and
subject to the terms of this Agreement;
(o) That, with respect to any Collateral that constitutes a
security entitlement, it shall comply with the provisions of Section 3(a) of
this Agreement and, with respect to any Collateral that constitutes a securities
account, it shall comply with the provisions of Section 3(a) of this Agreement
with respect to all security entitlements carried in such securities account;
and
(p) That if its jurisdiction as securities intermediary shall
change from that jurisdiction specified in Section 2(e) of this Agreement, it
will promptly notify the Collateral Agent and the Trustee of such change and of
such new jurisdiction.
SECTION 3. Control by the Collateral Agent.
(a) The Account Holder will comply with (A) all written
instructions directing disposition of the funds in the Pledge Account (such
instructions, a "Payment Order"), (B) all notifications and entitlement orders
that the Account Holder receives directing it to transfer or redeem any
financial asset in the Pledge Account and (C) all other directions concerning
the Collateral, including, without limitation, directions to distribute to the
Collateral Agent proceeds of any such transfer or redemption or interest on any
property in the Pledge Account (any such instruction, notification or direction
referred to in clause (A), (B) or (C) above being an
3.
"Account Direction"), in each case of clauses (A), (B) and (C) above originated
by the Collateral Agent without further consent by the Pledgor or any other
person.
(b) The Collateral Agent hereby acknowledges that it shall
maintain and exercise control of the Pledge Account on behalf of the Trustee and
the Holders of the Securities.
(c) The Account Holder will not (i) comply with Account
Directions or other directions concerning the Collateral originated by the
Pledgor or (ii) distribute to the Pledgor interest or other distributions on or
in respect of the Collateral.
SECTION 4. Priority of Collateral Agent's Security Interest.
(a) The Account Holder (i) subordinates to the Security
Interest and in favor of the Collateral Agent any security interest, lien, or
right of setoff the Account Holder may have, now or in the future, against the
Pledge Account or property in the Pledge Account, and (ii) agrees that it will
not exercise any right in respect of any such security interest or lien or any
such right of setoff until the Security Interest is terminated, except that the
Account Holder will retain its prior lien on property in the Pledge Account to
secure payment for property purchased for the Pledge Account and normal
commissions and fees for the Pledge Account.
(b) The Account Holder will not enter into any other
agreement with any Person relating to Account Directions or other directions
with respect to the Pledge Account.
SECTION 5. Statements, Confirmations, and Notices of Adverse Claims.
(a) The Account Holder will send copies of all statements and
confirmations for the Pledge Account simultaneously to the Pledgor and the
Collateral Agent.
(b) When the Account Holder knows of any claim or interest in
the Pledge Account or any property credited to the Pledge Account other than the
claims and interests of the parties referred to in this Agreement, the Account
Holder will promptly notify the Collateral Agent and the Pledgor of such claim
or interest.
SECTION 6. The Account Holder's Responsibility.
(a) The Account Holder will not be liable to the Pledgor of
the Collateral Agent or the Trustee or the Holders of the Securities for
complying with an Account Direction or other direction concerning the Collateral
originated by the Collateral Agent, even if the Pledgor notifies the Account
Holder that the Collateral Agent is not legally entitled to issue the Account
Direction or such other direction unless the Account Holder takes the action
after it is served with an injunction, restraining order, or other legal process
enjoining it from doing so, issued by a court of competent jurisdiction, and had
a reasonable opportunity to act on the injunction, restraining order or other
legal process.
(b) This Agreement does not create any obligation of the
Account Holder except for those expressly set forth in this Agreement and in
Part 5 of Article 8 of the UCC and in Article 4 of the UCC. In particular, the
Account Holder need not investigate whether the Collateral Agent is entitled
under the Collateral Agent's agreements with the Pledgor to give an
4.
Account Direction or other direction concerning the Pledge Account. The Account
Holder may conclusively rely on notices and communications it believes given by
the appropriate party.
(c) In no event shall the Account Holder or any of its
affiliates, shareholders, directors, officers, employees or agents be liable for
indirect, special, punitive, incidental or consequential damages of any kind
whatsoever even if advised of the possibility of such damages, other than such
damages caused by its own bad faith, gross negligence or willful misconduct.
(d) Without limiting the foregoing, and notwithstanding any
provision to the contrary elsewhere, the Account Holder and its affiliates,
shareholders, directors, officers, employees or agents:
(i) shall have no responsibilities, obligations or
duties in respect of the subject matter hereof other than those expressly set
forth in this Agreement, and no implied duties, responsibilities, covenants or
obligations shall be read into this Agreement against the Account Holder.
Without limiting the foregoing, the Account Holder shall have no duty or
authority to determine and/or investigate whether or not an event of default
exists under any agreement between the Pledgor and the Trustee and/or the
Collateral Agent, or to determine and/or investigate whether or not the
Collateral Agent is entitled to give any Account Direction with respect to the
Collateral;
(ii) may in any instance where the Account Holder
determines that it lacks or is uncertain as to its authority to take or refrain
from taking certain action hereunder, or as to any of the requirements of this
Agreement under the circumstance before it, delay or refrain from taking any
action unless and until it shall have received appropriate written instructions
from the Collateral Agent or advice from legal counsel selected by it (or other
appropriate advisor), as the case may be, detailing the action required to be
taken hereunder and the Account Holder may rely conclusively on any such
instructions or advice;
(iii) so long as it and they shall have acted (or
refrained from acting) in good faith and within the reasonable belief that such
action or omission is duly authorized or within the discretion or powers granted
to it hereunder, shall not be responsible or liable for any error of judgment in
any action taken, suffered or omitted by it or them, or for any act done or step
taken or omitted, or for any mistake of fact or law, unless such action
constitutes gross negligence or willful misconduct as finally determined by a
non-appealable judgment of a court of competent jurisdiction on its (or their)
part;
(iv) will not be responsible or liable to the Pledgor,
the Collateral Agent, the Trustee, or any other person or entity whatsoever for
the due execution, legality, validity, enforceability, genuineness,
effectiveness or sufficiency of this Agreement (provided, however, that the
Account Holder warrants that the Account Holder has legal capacity and has been
duly authorized to enter into this Agreement) or for any statement, warranty or
representation made by any other party in connection with this Agreement;
(v) will not incur any responsibility or liability by
acting or not acting in reliance upon advice of counsel, or upon any notice,
consent, certificate, instruction, Account
5.
Direction, statement, wire instruction, telecopy or other writing reasonably and
in good faith believed by it or them to be genuine and in conformance with this
Agreement and signed or sent by the proper party or parties and contemplated
herein; and
(vi) shall not be required to expend or risk its or
their own funds, or to take any action (including the institution or defense of
legal proceedings) which in its or their reasonable judgment may cause it or
them to incur or suffer any expense or liability, unless the Account Holder
shall have been provided with security or indemnity, acceptable to Account
Holder in its sole discretion, for the payment of the costs, expenses (including
reasonable attorneys' fees) and liabilities which may be incurred therein or
thereby.
(e) If any Collateral subject to this Agreement is at any
time attached or levied upon, or in case the transfer or delivery of any such
Collateral shall be stayed or enjoined, or in the case of any other legal
process or judicial order affecting such Collateral, the Account Holder is
authorized to comply with any such order in any manner as the Account Holder or
its legal counsel reasonably deems appropriate. The Account Holder shall give
prompt written notice to the Pledgor and the Collateral Agent of any such
attachment, levy, stay, injunction or legal process. If the Account Holder
complies with any process, order, writ, judgment or decree relating to the
Collateral subject to this Agreement, then the Account Holder shall not be
liable or responsible to the Pledgor, the Collateral Agent, the Trustee, or any
other person or entity whatsoever even if such order, writ, judgment, decree or
process is subsequently modified, vacated or otherwise determined to have been
without legal force or effect.
(f) The Account Holder shall not be liable or responsible for
any delays or failures in performance of any of its duties hereunder which
result from events or conditions beyond its reasonable control and so long as
the same exist or continue and cannot reasonably be remedied by the Account
Holder in accordance with its normal business practices. Such events or
conditions shall include, but shall not be limited to, acts of God, strikes,
lockouts, riots, acts of war or terrorism, epidemics, nationalization,
expropriation, currency restrictions, governmental regulations superimposed
after the fact, fire, communication line failures (including the unavailability
of the Federal Reserve Bank wire or telex or other wire or communication
facility), power failures, earthquakes or other disasters.
SECTION 7. Indemnity. The Pledgor will indemnify the Account Holder,
its officers, directors, employees and agents against claims, liabilities and
expenses arising out of this Agreement (including, without limitation,
reasonable attorney's fees and disbursements), except to the extent the claims,
liabilities or expenses are caused by the Account Holder's gross negligence or
willful misconduct as found by a court of competent jurisdiction in a final,
non-appealable judgment.
SECTION 8. Termination; Survival.
(a) This Agreement shall terminate automatically upon receipt
by the Account Holder of written notice executed by an officer of the Collateral
Agent that (i) all of the Secured Obligations have been paid in full in cash or
otherwise satisfied or (ii) all of the Collateral has been released, which ever
is earlier, and the Account Holder shall thereafter be relieved of all duties
and obligations hereunder. The Account Holder may terminate this Agreement on 60
6.
days' prior notice to the Collateral Agent, the Trustee and the Pledgor,
provided that before such termination the Account Holder and the Pledgor shall
make arrangements to transfer the property in the Pledge Account to another
securities intermediary that shall have executed, together with the Collateral
Agent, the Trustee and the Pledgor, a control agreement in favor of the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders of the Securities in respect of such property in substantially the form
of this Agreement or otherwise in form and substance satisfactory to the
Collateral Agent.
(b) In the event that the Collateral Agent no longer serves
as Collateral Agent for the Collateral, the Collateral Agent, the Trustee, the
Account Holder and the Pledgor shall make arrangements for another Person to
assume the rights and obligations of the Collateral Agent hereunder, and such
Person shall have executed, together with the Account Holder and the Pledgor, a
control agreement in favor of such Person for the benefit of the Trustee and the
ratable benefit of the Holders of the Securities in substantially the form of
this Agreement or otherwise in form and substance satisfactory to the Collateral
Agent.
(c) Sections 7 and 8 will survive termination of this
Agreement.
SECTION 9. Conflict with Other Agreements.
(a) In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter entered
into, the terms of this Agreement shall prevail;
(b) No amendment or modification of this Agreement or waiver
of any right hereunder shall be binding on any party hereto unless it is in
writing and is signed by all of the parties hereto;
(c) The Account Holder hereby confirms and agrees that:
(i) There are no other agreements entered into between
the Account Holder and the Pledgor with respect to the Pledge Account;
(ii) It has not entered into, and until the termination
of the this Agreement will not enter into, any agreement with any other person
relating to the Pledge Account and/or any financial assets credited thereto
pursuant to which it has agreed to comply with entitlement orders (as defined in
Section 8-102(a)(8) of the UCC) of such other person; and
(iii) It has not entered into, and until the termination
of this Agreement will not enter into, any agreement with the Pledgor or the
Collateral Agent purporting to limit or condition the obligation of the Account
Holder to comply with Account Directions as set forth in Section 3 hereof.
SECTION 10. Permitted Investments. In accordance with the Pledge
Agreement, the Collateral Agent shall direct the Account Holder with respect to
the selection of investments to be made with the funds in the Pledge Account.
7.
SECTION 11. Entire Agreement. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral agreements, of the
parties concerning its subject matter. The Collateral Agent, the Trustee and the
Account Holder shall be entitled to all the rights, benefits, privileges and
immunities accorded to the Collateral Agent and the Trustee under the Indenture.
SECTION 12. Amendments. No modification, amendment or waiver of, nor
consent to any departure by any party from, any provision of this Agreement will
be effective unless made in writing signed by the parties hereto, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.
SECTION 13. Financial Assets. The Account Holder agrees with the
Collateral Agent, the Trustee and the Pledgor that, to the fullest extent
permitted by applicable law, all property credited from time to time to the
Pledge Account will be treated as financial assets under Article 8 of the UCC.
SECTION 14. Notices. All notices, demands, requests, consents,
approvals and other communications required or permitted hereunder must be in
writing and will be effective upon receipt if delivered personally, or if sent
by facsimile transmission with confirmation of delivery, or by nationally
recognized overnight courier service, to the Pledgor's, the Collateral Agent's
and the Trustee's addresses as set forth in the Pledge Agreement, and to the
Account Holder's address as set forth below, or to such other address as any
party may give to the others in writing for such purpose.
SECTION 15. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Pledgor, the Collateral Agent, the Trustee
and the Account Holder, and thereafter shall be binding upon and inure to the
benefit of the Pledgor, the Collateral Agent, the Trustee and the Account Holder
and their respective successors and assigns. If the Pledgor consolidates or
merges into any other Person, in a transaction in which the Pledgor is not the
surviving corporation, or conveys, transfers or leases its properties and assets
substantially as an entirety to, any person, then the successor entity shall
assume the Pledgor's obligations under this Agreement in writing.
SECTION 16. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.
SECTION 17. Governing Law and Jurisdiction. THIS AGREEMENT WILL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. Each of the parties hereby irrevocably submits for itself and its property
in any legal action or proceeding relating to this Agreement, or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction and venue of the courts of the State of New York, the courts of the
United States of America in New York, and appellate courts from any thereof.
8.
SECTION 18. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) OF
ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH
PARTY HERETO ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
9.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
PLEDGOR:
SCIOS INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
COLLATERAL AGENT:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Collateral Agent
By: ___________________________________
Name: _________________________________
Title: ________________________________
TRUSTEE:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By: ___________________________________
Name: _________________________________
Title: ________________________________
ACCOUNT HOLDER:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Account Holder
By: ___________________________________
Name: _________________________________
Title: ________________________________
Address: ________________________
_________________________________
Attn: _______________________
Fax: ________________________
SCHEDULE I
Pledged Financial Assets
Security Coupon Date CUSIP No.
U.S. Treasury Strips 2/15/03 000000XX0
U.S. Treasury Strip 8/15/03 000000XX0
U.S. Treasury Strip 2/15/04 000000XX0
U.S. Treasury Strip 8/15/04 000000XX0
U.S. Treasury Strip 2/15/05 000000XX0
U.S. Treasury Strip 8/15/05 000000XX0
1.
ANNEX B
XXXXX FARGO BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
PURSUANT TO SECTION 4(H) OF THE PLEDGE AGREEMENT, dated as of August 5,
2002 (as amended, restated, supplemented or otherwise modified from time to
time, the "Pledge Agreement"), by and among SCIOS INC., a Delaware corporation
(the "Pledgor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, in its capacity as
trustee (the "Trustee") for the holders from time to time (the "Holders") of the
Securities (as defined in the Pledge Agreement), and XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as collateral agent for the Trustee and the Holders (the
"Collateral Agent"), the undersigned officer of the Collateral Agent, on behalf
of the Collateral Agent, makes the following certifications to the Pledgor and
the Initial Purchasers. Capitalized terms used and not defined in this Officer's
Certificate have the meanings set forth or referred to in the Pledge Agreement.
1. Substantially contemporaneously with the execution and delivery of
this Officer's Certificate, the Collateral Agent has acquired its security
entitlement to the [initial Pledged Financial Assets] [the additional Pledged
Financial Assets identified on Supplement No.__ to the Pledge Agreement] through
a "securities account" (as defined in Section 8-501(a) of the N.Y. Uniform
Commercial Code) maintained by the Collateral Agent, for value and without
notice of any adverse claim thereto. Without limiting the generality of the
foregoing, the Collateral Account, the Pledged Financial Assets and the other
Collateral are not, and the Collateral Agent's security entitlement to the
Collateral is not, to the actual knowledge of the corporate trust officer having
responsibility for the administration of the Pledge Agreement on behalf of the
Collateral Agent, subject to any Lien granted by or to or arising through or in
favor of any securities intermediary (including, without limitation, Xxxxx Fargo
Bank, National Association) through which the Collateral Agent derives its
security entitlement to the Collateral.
2. The Collateral Agent has not knowingly caused or permitted the
Collateral Account or its security entitlement thereto to become subject to any
Lien created by or arising through the Collateral Agent.
2.
IN WITNESS WHEREOF, the undersigned officer has executed this Officer's
Certificate on behalf of Xxxxx Fargo Bank, National Association, as Collateral
Agent this 5th day of August, 2002.
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as
Collateral Agent
By:_______________________________________
Name:
Title:
3.
ANNEX C
[Form of Supplement to the Pledge Agreement]
SUPPLEMENT NO. _____ dated as of ____________, 2002, to the PLEDGE
AGREEMENT dated as of August 5, 2002 (as amended, restated supplemented or
otherwise modified from time to time, the "Pledge Agreement") among SCIOS, INC.,
a Delaware corporation (the "Pledgor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as trustee (in such capacity, the "Trustee") for the holders (the "Holders") of
the Securities (as defined below) issued by the Pledgor under the Indenture
referred to below, and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as collateral
agent (in such capacity, the "Collateral Agent"). Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms
in the Pledge Agreement.
WHEREAS, the Pledgor, X.X. Xxxxxx Securities Inc., Xxxxxx Brothers Inc.
and XX Xxxxx Securities Corporation (the "Initial Purchasers") are parties to a
Purchase Agreement dated as of July 30, 2002 (the "Purchase Agreement"),
pursuant to which the Pledgor granted the Initial Purchasers an overallotment
option to purchase up to $25,000,000 aggregate principal amount of the Pledgor's
5.50% Convertible Subordinated Notes due 2009 (the "Securities");
WHEREAS, the Pledgor and the Trustee have entered into that certain
Indenture dated as of August 5, 2002 (as amended, restated supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Pledgor is issuing the Securities.
WHEREAS, pursuant to the Indenture, the Pledgor is required to
purchase, or cause the purchase of, and pledge to the Collateral Agent for the
benefit of the Trustee and the Holders, on or prior to any sale of Option
Securities Additional Collateral (as defined below) in an amount that will be
sufficient upon receipt of scheduled interest and principal payments of such
securities, according to a written report of a nationally recognized firm of
independent public accountants selected by the Pledgor and delivered to the
Trustee, to provide payment in full of the first six scheduled interest payments
due on the Securities;
WHEREAS, the Pledgor, the Trustee and the Collateral Agent have entered
into the Pledge Agreement, pursuant to which the Pledgor has previously pledged
the Collateral to the Collateral Agent for the benefit of the Holders in
connection with the purchase by the Initial Purchasers of $__________ aggregate
principal amount of Securities;
WHEREAS, the Initial Purchasers have exercised their overallotment
option under the Purchase Agreement to purchase $[__________] aggregate
principal amount of Securities;
WHEREAS, it is a condition precedent to the purchase of the Securities
by the Initial Purchasers pursuant to the overallotment option granted in the
Purchase Agreement that the Pledgor purchase Additional Collateral and deposit
such Additional Collateral into the Pledge Account to be held therein subject to
the terms of the Pledge Agreement and shall have granted the assignment and
security interest and made the pledge and assignment contemplated by the Pledge
Agreement;
1.
NOW THEREFORE, in consideration of the premises herein contained, and
in order to induce the Initial Purchasers to purchase the Securities, the
Pledgor, the Trustee and the Collateral Agent hereby agree, for the benefit of
the Initial Purchasers and for the ratable benefit of the Holders, as follows:
SECTION 1. Pledge and Grant of Security Interest. Pursuant to Section 1
of the Pledge Agreement, as security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, the Pledgor hereby assigns and pledges to the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders and hereby grants to the Collateral Agent for the benefit of the Trustee
and for the ratable benefit of the Holders, a lien on and security interest in
all of the Pledgor's right, title and interest in, to and under the following
property: (a) the Government Securities identified by CUSIP No. in Part I of
Schedule I hereto (the "Additional Collateral") and the certificates
representing the Additional Collateral, the scheduled payments of principal and
interest thereon which will be sufficient to provide for payment in full of the
first six scheduled interest payments due on the Securities issued in connection
herewith and (b) the security entitlements described in Part II of Schedule I
hereto, with respect to the financial assets described, the securities
intermediary named, and the securities account referred to therein. The Pledge
Agreement is hereby incorporated herein by reference.
SECTION 2. Supplement to Schedule I. The parties hereto agree that
Schedule I to the Pledge Agreement shall be supplemented by Schedule I hereto.
SECTION 3. Transfer of Additional Collateral. Pursuant to Section 9(d)
of the Pledge Agreement, on or prior to the date hereof, the Pledgor agrees to
transfer, or caused to be transferred, to the Pledge Account, the Additional
Collateral in such amount that will be sufficient upon receipt of scheduled
interest, and principal payments of such securities, according to a written
report of a national recognized firm of independent public accountants selected
by the Pledgor and delivered to the Trustee, to provide for payment in full of
the first six scheduled interest payments due on the Securities.
SECTION 4. Representations and Warranties.
(a) The Pledgor hereby represents and warrants to the Trustee
and the Collateral Agent that:
(1) Each of this Supplement and the Pledge Agreement
as supplemented hereby has been duly authorized, validly executed and delivered
by the Pledgor and (assuming the due authorization and valid execution and
delivery of this Supplement by each of the Trustee and the Collateral Agent)
constitutes a valid and binding agreement of the Pledgor, enforceable against
the Pledgor in accordance with its terms, except as (i) the enforceability
hereof and thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, preference, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting the rights or remedies of creditors
generally, (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability and the discretion of the court
before which any proceeding therefore may be brought, (iii) the exculpation
provisions and rights to indemnification under the Pledge Agreement may be
limited by U.S. federal and state securities
2.
laws and public considerations and (iv) the waiver of rights and defenses
contained in Section 12(b), Section 19.8 and Section 19.13 of the Pledge
Agreement may be limited by applicable law; and
(2) The representations and warranties of the
Pledgor set forth in Section 7(a) of the Pledge Agreement are true and correct
in all material respects with the same effect as if made on and as of the date
hereof.
(b) The Collateral Agent hereby represents and warrants to the
Trustee and the Pledgor that:
(1) Each of this Supplement and the Pledge Agreement
as supplemented hereby has been duly authorized, validly executed and delivered
by the Collateral Agent and (assuming the due authorization and valid execution
and delivery of this Supplement by each of the Trustee and the Pledgor)
constitutes a valid and binding agreement of the Collateral Agent, enforceable
against the Collateral Agent in accordance with its terms, except as the
availability of equitable remedies may be limited by equitable principles of
general applicability and the discretion of the court before which any
proceeding therefore may be brought; and
(2) The representations and warranties of the
Collateral Agent set forth in Section 7(b) of the Pledge Agreement are true and
correct in all material respects with the same effect as if made on and as of
the date hereof.
SECTION 5. Execution in Counterparts. This Supplement may be signed in
two or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement. This Supplement
shall become effective when the Collateral Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of the Pledgor, the Trustee and the Collateral Agent.
SECTION 6. Effect of Supplement. Except as expressly supplemented
hereby, the Pledge Agreement shall remain in full force and effect.
SECTION 7. Governing Law. This Supplement shall be governed by and
construed in accordance with the laws of the State of New York.
3.
IN WITNESS WHEREOF, the Pledgor, the Trustee and the Collateral Agent
have caused this Supplement to be duly executed and delivered as of the date
first above written.
PLEDGOR:
SCIOS INC.
By: ___________________________________
Name:______________________________
Title:_____________________________
TRUSTEE:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By: ___________________________________
Name:______________________________
Title:_____________________________
COLLATERAL AGENT:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Collateral Agent
By: ___________________________________
Name:______________________________
Title:_____________________________
4.
SCHEDULE I
ADDITIONAL COLLATERAL
Part I Government Securities
Security Coupon Date CUSIP No.
Part II Securities Entitlements
Financial Asset Securities Intermediary Securities Account
5.
