EXHIBIT 4.4
FORM OF REGISTERED LYON
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE
CODE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF
PRINCIPAL AMOUNT AT MATURITY OF THIS SECURITY IS $662.15, THE ISSUE DATE IS
FEBRUARY 16, 1999, THE YIELD TO MATURITY IS 5.5%.
IDEC PHARMACEUTICALS CORPORATION
Liquid Yield Option(TM) Note due 2019
(Zero Coupon-Subordinated)
No. R- CUSIP: 449370 AC 9
Issue Date: February 16, 1999 Original Issue Discount: $662.15
Issue Price: $337.85 (for each $1,000 Principal Amount at
(for each $1,000 Principal Amount Maturity)
at Maturity)
IDEC PHARMACEUTICALS CORPORATION, a Delaware corporation,
promises to pay to ________ or registered assigns, the Principal Amount at
Maturity of ________ Dollars on February 16, 2019.
This Security shall not bear interest except as specified on the
other side of this Security. Original Issue Discount will accrue as specified on
the other side of this Security. This Security is convertible as specified on
the other side of this Security.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated: IDEC PHARMACEUTICALS CORPORATION
By______________________________________
Title:
Attest:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
CHASE MANHATTAN BANK
AND TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned
Indenture.
By_________________________________
Authorized Signatory
Dated:_____________________________
[FORM OF REVERSE SIDE OF LYON]
Liquid Yield Option(TM) Note Due 2019
(Zero Coupon-Subordinated)
1. Interest.
This Security shall not bear interest, except as specified in
this paragraph or in paragraph 10 hereof. If the Principal Amount at Maturity
hereof or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 6.02 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 5 hereof,
upon the date set for payment of the Purchase Price or Change in Control
Purchase Price
pursuant to paragraph 6 hereof or upon the Stated Maturity of this Security) or
if interest due hereon or any portion of such interest is not paid when due in
accordance with paragraph 10 hereof, then in each such case the overdue amount
shall, to the extent permitted by law, bear interest at the rate of 5.5% per
annum, compounded semiannually, which interest shall accrue from the date such
overdue amount was originally due to the date payment of such amount, including
interest thereon, has been made or duly provided for. All such interest shall be
payable on demand. The accrual of such interest on overdue amounts shall be in
lieu of, and not in addition to, the continued accrual of Original Issue
Discount.
Original Issue Discount (the difference between the Issue Price
and the Principal Amount at Maturity of the Security), in the period during
which a Security remains outstanding, shall accrue at 5.5% per annum, on a
semiannual bond equivalent basis using a 360-day year composed of twelve 30-day
months, from the Issue Date of this Security.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company
will make payments in respect of Redemption Prices, Purchase Prices, Change in
Control Purchase Prices and at Stated Maturity to Holders who surrender
Securities to a Paying Agent to collect such payments in respect of the
Securities. The Company will pay cash amounts in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
However, the Company may make such cash payments by check payable in such money.
3. Paying Agent; Conversion Agent and Registrar.
Initially, Chase Manhattan Bank and Trust Company, National
Association, a national banking association organized under the laws of the
United States (the "Trustee"), will act as Paying Agent, Conversion Agent and
Registrar. The Company may appoint and change any Paying Agent, Conversion
Agent, Registrar or co-registrar without notice, other than notice to the
Trustee except that the Company will maintain at least one Paying Agent in the
State of New York, City of New York, Borough of Manhattan, which shall initially
be an office or agency of the Trustee. The Company or any of its Subsidiaries or
any of their Affiliates may act as Paying Agent, Conversion Agent, Registrar or
co-registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
February 16, 1999 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as in
effect from time to time (the "TIA"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms , and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the Company
limited to $345,000,000 aggregate Principal Amount at Maturity (subject to
Section 2.07 of the Indenture). The Indenture does not limit other indebtedness
of the Company, secured or unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities
are redeemable as a whole, or from time to time in part, at any time at the
option of the Company at the Redemption Prices set forth below, provided that
the Securities are not redeemable prior to February 16, 2004.
The table below shows Redemption Prices of a Security per $1,000
Principal Amount at Maturity on the dates shown below and at Stated Maturity,
which prices reflect accrued Original Issue Discount calculated to each such
date. The Redemption Price of a Security redeemed between such dates shall
include an additional amount reflecting the additional Original Issue Discount
accrued since the next preceding date in the table.
If converted to a semiannual coupon note following the occurrence
of a Tax Event, this Security will be redeemable at the Restated Principal
Amount plus accrued and unpaid interest from the date of such conversion through
the Redemption Date; but in no event will this Security be redeemable before
February 16, 2004.
6. Purchase by the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Securities
held by such Holder on the following Purchase Dates and at the following
Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery of a
Purchase Notice containing the information set forth in the Indenture at any
time from the opening of business on the date that is 20 Business Days prior to
such Purchase Date until the close of business on such Purchase Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in the
Indenture.
The Purchase Price (equal to the Issue Price plus accrued
Original Issue Discount to the Purchase Date) may be paid, at the option of the
Company, in cash or by the issuance and delivery of shares of Common Stock of
the Company, or in any combination thereof.
If prior to a Purchase Date this Security has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from the date of conversion to the Purchase Date.
At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to purchase the
Securities held by such Holder 35 Business Days after the occurrence of a Change
in Control of the Company occurring on or prior to February 16, 2004 for a
Change in Control Purchase Price equal to the Issue Price plus accrued Original
Issue Discount to the Change in Control Purchase Date, which Change in Control
Purchase Price shall be paid in cash. If prior to a Change in Control Purchase
Date this Security has been converted to a semiannual coupon note following the
occurrence of a Tax Event, the Change in Control Purchase Price shall be equal
to the Restated Principal Amount plus accrued and unpaid interest from the date
of conversion to the Change in Control Purchase Date.
Holders have the right to withdraw any Purchase Notice or Change
in Control Purchase Notice, as the case may be, by delivering to the Paying
Agent a written notice of withdrawal in accordance with the provisions of the
Indenture.
If cash (and/or securities if permitted under the Indenture)
sufficient to pay the Purchase Price or Change in Control Purchase Price, as the
case may be, of all Securities or portions thereof to be purchased as of the
Purchase Date or the Change in Control Purchase Date, as the case may be, is
deposited with the Paying Agent on the Business Day following the Purchase Date
or the Change in Control Purchase Date, as the case may be, Original Issue
Discount ceases to accrue on such Securities (or portions thereof) immediately
after such Purchase Date or Change in Control Purchase Date, as the case may be,
and the Holder thereof
shall have no other rights as such (other than the right to receive the Purchase
Price or Change in Control Purchase Price, as the case may be, upon surrender of
such Security).
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at the Holder's registered address. If money sufficient to pay the
Redemption Price of all Securities (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date, immediately after such Redemption Date original issue Discount ceases to
accrue on such Securities or portions thereof. Securities in denominations
larger than $1,000 of Principal Amount at Maturity may be redeemed in part but
only in integral multiples of $1,000 of Principal Amount at Maturity.
8. Conversion.
Subject to the next two succeeding sentences, a Holder of a
Security may convert it into Common Stock of the Company at any time before the
close of business on February 16, 2019. If the Security is called for
redemption, the Holder may convert it at any time before the close of business
on the Redemption Date. A security in respect of which a Holder has delivered a
Purchase Notice or Change in Control Purchase Notice exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if such notice of exercise is withdrawn in accordance with the terms of the
Indenture.
The initial Conversion Rate is 6.734 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section
10.01 of the Indenture to have interest in lieu of Original Issue Discount
accrue on the Security following a Tax Event, the Holder will be entitled on
conversion to receive the same number of shares of Common Stock such Holder
would have received if the Company had not exercised such option. If the Company
exercises such option, Securities surrendered for conversion during the period
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business of such Interest Payment Date
(except Securities to be redeemed on a date within such period) must be
accompanied by payment of an amount equal to the interest thereon that the
registered Holder is to receive. Except where Securities surrendered for
conversion must be accompanied by payment as described above, no interest on
converted Securities will be payable by the Company on any Interest Payment Date
subsequent to the date of conversion.
To convert a Security, a Holder must (1) complete and manually
sign the conversion notice below (or complete and manually sign a facsimile of
such notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
A Holder may convert a portion of a Security if the Principal
Amount at Maturity of such portion in $1,000 or an integral multiple of $1,000.
No payment or adjustment will be made for dividends on the Common Stock except
as provided in the Indenture. On conversion of a Security, that portion of
accrued Original Issue Discount (or interest if the Company has exercised its
option provided for in paragraph 10 hereof) attributable to the period from the
Issue Date (or, if the Company has exercised the option referred to in paragraph
10 hereof, the later of (x) the date of such exercise and (y) the date on which
interest was last paid) through the Conversion Date with respect to the
converted Security shall not be cancelled, extinguished or forfeited, but rather
shall be deemed to be paid in full to the Holder thereof through the delivery of
the Common Stock (together with the cash payment, if any, in lieu of fractional
shares) in exchange for the Security being converted pursuant to the terms
hereof; and the fair market value of such shares of Common Stock (together with
any such cash payment in lieu of fractional shares) shall be treated as issued,
to the extent thereof, first in exchange for Original Issue Discount (or
interest, if the Company has exercised its option provided for in paragraph 10
hereof) accrued through the Conversion Date, and the balance, if any, of such
fair market value of such Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.
The Conversion Rate will be adjusted for dividends or
distributions on Common Stock payable in Common Stock or other Capital Stock;
subdivisions, combinations or certain reclassifications of Common Stock;
distributions to all holders of Common Stock of certain rights to purchase
Common Stock for a period expiring within 60 days at less than the Quoted Price
at the Time of Determination; and distributions to such holders of assets or
debt securities of the Company or certain rights to purchase securities of the
Company (excluding certain cash dividends or distributions). However, no
adjustment need be made if Securityholders may participate in the transaction or
in certain other cases. The Company from time to time may voluntarily increase
the Conversion Rate.
If the Company is a party to a consolidation, merger or binding
share exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another person.
9. Conversion Arrangement on Call for Redemption.
Any Securities called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed to
be purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Securities from the Holders, to convert
them into Common Stock of the Company and to make payment for such Securities to
the Trustee in trust for such Holders.
10. Tax Event.
(a) From and after (i) the date (the "Tax Event Date") of the
occurrence of a Tax Event and (ii) the date the Company exercises such option,
whichever is later (the "Option Exercise Date"), at the option of the Company,
interest in lieu of future Original Issue Discount shall accrue at the rate of
5.5% per annum on a principal amount per Security (the "Restated Principal
Amount") equal to the Issue Price plus Original Issue Discount accrued through
the Option Exercise Date and shall be payable semiannually on February 16 and
August 16 of each year (each an "Interest Payment Date") to holders of record at
the close of business on February 1 or August 1 (each a "Regular Record Date")
immediately preceding such interest Payment Date. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months and will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the Option Exercise Date.
(b) Interest on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security is registered at the close of business on the
Regular Record Date for such interest at the office or agency of the Company
maintained for such purpose. Each installment of interest on any Security shall
be paid in same-day funds by transfer to an account maintained by the payee
located inside the United States.
(c) Except as otherwise specified with respect to the Securities,
any Defaulted Interest on any Security shall forthwith cease to be payable to
the registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company
as provided for in Section 10.02(b) of the Indenture.
11. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not transfer
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities in respect of which a Purchase Notice or Change in Control
Purchase Notice has been given and not withdrawn (except, in the case of a
Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before a selection of
Securities to be redeemed.
12. Persons Deemed Owners.
The registered Holder of this Security may be treated as the
owner of this Security for all purposes.
13. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years after
deposit of such money or securities with the Trustee or the Paying Agent,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designate
another person.
14. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
at Maturity of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 or Section 11.14 of the Indenture, to provide for
uncertificated Securities in addition to or in place of certificated Securities
or to make any change that does not adversely affect the rights of any
Securityholder, to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA or to add to the covenants or
obligations of the Company under the Indenture or surrender any right, power or
option conferred by the Indenture on the Company.
15. Defaults and Remedies.
Under the Indenture, Events of Default include (i) if the
Securities have been converted to semiannual coupon notes following a Tax Event,
default in the payment of interest which default continues for a period of 30
days; (ii) default in payment of the Principal Amount at Maturity (or, if the
Securities have been converted to semiannual coupon notes following a Tax Event,
the Restated Principal Amount), Issue Price plus accrued Original Issue
Discount, Redemption Price, Purchase Price or Change in Control Purchase Price,
as the case may be, in respect of the Securities when the same becomes due and
payable; (iii) failure by the Company to comply with other agreements in the
Indenture or the Securities, subject to notice and lapse of time; (iv) default
(after expiration of any applicable grace periods) under any bond, debenture,
note or other evidence of indebtedness for money borrowed of the Company having
an aggregate outstanding principal amount of in excess of the greater of (a) $10
million or (b) 5% of Consolidated Net Assets, which default shall have resulted
in such indebtedness being accelerated, without such indebtedness being
discharged or such acceleration having been cured, waived, rescinded or annulled
within 15 days after receipt by the Company of Notice of Default; provided,
however, that if any such failure or acceleration referred to in (a) or (b)
above shall cease or be cured, waived, rescinded or annulled, then the Event of
Default by reason thereof shall be deemed not to have occurred; (v) certain
events of bankruptcy or insolvency; and (vi) failure by the Company to deliver
shares of Common Stock or cash in lieu thereof (together with cash in lieu of
fractional shares) unless such Common Stock or cash (or cash in lieu of
fractional shares) is required to be delivered following conversion of a
Security and continuance
of such Default for 10 days. If an Event of Default occurs and is continuing,
the Trustee, or the Holders of at least 25% in aggregate Principal Amount at
Maturity of the Securities at the time outstanding, may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities becoming
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in aggregate Principal
Amount at Maturity of the Securities at the time outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in payment of
amounts specified in clause (i) or (ii) above) if it determines that withholding
notice is in their interests.
16. Subordination.
The Securities are subordinated to all existing and future Senior
Indebtedness. To the extent provided in the Indenture, Senior Indebtedness must
be paid before the Securities may be paid. The Indenture does not limit the
present or future amount of Senior Indebtedness the Company may have. The
Company agrees, and each Securityholder by accepting a Security agrees, to the
subordination and authorizes the Trustee to give it effect and appoints the
Trustee as attorney-in-fact for such purpose.
17. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
19. Authentication.
This Security shall not be valid until an authorized officer of
the Trustee manually signs the Trustee's Certificate of Authentication on the
other side of this Security.
20. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT
TEN (=joint tenants with right of survivorship and not as tenants in common),
CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
21. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND
THIS SECURITY, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
---------------
The Company will furnish to any Securityholder upon written
request and without charge a copy of the Indenture which has in it the text of
this Security in larger type. Requests may be made to:
IDEC Pharmaceuticals Corporation
11011 Torreyama Road
San Diego, California 92121
Attention: Chief Financial Officer
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill in the To convert this Security into
form below: Common Stock of the Company, check
the box:
I or we assign and transfer this
Security to
--------------------------------- To convert only part of this
Security, state the Principal
--------------------------------- Amount at Maturity to be converted
(which must be $1,000 or an
(Insert assignee's soc. integral multiple of $1,000):
sec. or tax ID no.)
________________________________________
If you want the stock certificate
________________________________________ made out in another person's name,
fill in the form below:
________________________________________
________________________________________
(Print or type assignee's name, (Insert other person's
address and zip code) soc. sec. or tax ID no.)
and irrevocably appoint _________ agent to ___________________________________
transfer this Security on the books of the
Company. The agent may substitute another ___________________________________
to act for him.
___________________________________
___________________________________
(Print or type other person's name,
address and zip code)
________________________________________________________________________________
Date:_________________________ Your Signature:_________________________
________________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)