Document:

Exhibit 4.1

 

	
  CUSIP NO. 421915 EJ4

  	
   

  	
  PRINCIPAL AMOUNT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $500,000,000

  

 

HEALTH
CARE PROPERTY INVESTORS, INC.

6.00%
SENIOR NOTES DUE 2017

THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND, UNLESS AND
UNTIL IT IS EXCHANGED FOR SECURITIES IN DEFINITIVE FORM AS AFORESAID, MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE
OF THE DEPOSITARY OR BY THE DEPOSITARY OR ITS NOMINEE TO A SUCCESSOR DEPOSITARY
OR ITS NOMINEE.

UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (“DTC”), 55 WATER STREET, NEW YORK, NEW YORK TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

HEALTH
CARE PROPERTY INVESTORS, INC., a Maryland corporation (the “Company”, which
term shall include any successor under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of Five Hundred Million Dollars ($500,000,000) on January
30, 2017, and to pay interest thereon from January 22, 2007 or from the most
recent interest payment date on which interest has been paid or duly provided
for, semi-annually in arrears on January 30 and July 30 (each, an “Interest
Payment Date”) of each year (or if such date is not a Business Day, on the next
Business Day thereafter; no interest will accrue on such payment for the period
from and after such Interest Payment Date to the date of such payment on the
next succeeding Business Day), commencing July 30, 2007, at the rate of 6.00%
per annum, until the entire principal amount hereof is paid or duly provided
for. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Holder
in whose name this Note (or one or more predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the date that is 15 calendar days prior to such Interest Payment Date, whether
or not a Business Day.  Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date, and may either be paid to the Holder
in whose name this Note (or one or more predecessor Notes) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Notes of this series not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any 

securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.  Interest will be computed on the basis of a
360-day year of twelve 30-day months. Payments of principal, premium, if any,
and interest in respect of this Note will be made by the Company in immediately
available funds.

Payment
of the principal of and interest on this Note shall be payable at the Corporate
Trust Office of The Bank of New York, located at 101 Barclay Street, Floor 8 W,
New York, New York 10286 or at such other office or agency of the Company
maintained for that purpose in The City of New York, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that, at the option of
the Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear on the Security Register or by
transfer to an account maintained by the payee with a bank located in the
United States; and, provided, further, that so long as this Note is registered
in the name of DTC or its nominee, principal and interest payments will be paid
to DTC or its nominee, as the Holder, by wire transfer in same-day funds.

Reference
is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.

Unless
the certificate of authentication hereon has been executed by the Trustee by
manual signature of one of its authorized signatories, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

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IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal this 22nd day of January, 2007.

	
  

  	
  Health Care Property Investors, Inc.,

  
	
   

  	
  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Wallace

  	
   

  
	
   

  	
  Name:

  	
  Mark Wallace

  
	
   

  	
  Title:

  	
  Senior Vice President, Chief Financial 

  
	
   

  	
   

  	
  Officer and Treasurer

  
	
   

  	
   

  	 

	
  Attest:

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  By:

  	
  /s/ Edward J. Henning

  	
   

  	
   

  	 

	
  Name:

  	
  Edward J. Henning

  	
   

  	 

	
  Title:

  	
  Senior Vice President, General Counsel

  	
   

  	 

	
   

  	
  and Corporate Secretary

  	
   

  	 

							

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TRUSTEE’S
CERTIFICATE OF AUTHENTICATION:

This
is one of the Notes of the series designated herein referred to in the
within-mentioned Indenture.

The Bank of New York, as Trustee

	
  By:

  	
  /s/ Stacey B. Poindexter

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  

 

Dated: January 22, 2007

This
Note is one of a duly authorized issue of securities of the Company (herein
called the “Notes”), issued as a series of securities under an indenture dated
as of September 1, 1993 (the “Indenture”), between the Company and The Bank of
New York, as trustee (the “Trustee,” which term includes any successor trustee
under the Indenture with respect to the Notes), to which Indenture and all
indentures supplemental thereto, reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
the duly authorized series designated as the “6.00% Senior Notes Due 2017,”
originally limited (subject to exceptions provided in the Indenture) in aggregate
principal amount to $500,000,000; however, from time to time, without giving
notice or seeking consent of the Holders of the Notes, the Company may issue
additional Notes of this series having the same ranking, interest rate and
maturity and other terms as this Note. All terms used in this Note which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.

If
an Event of Default with respect to the Notes shall occur and be continuing,
the principal of the Notes may be declared due and payable in the manner and
with the effect provided in the Indenture.

The
Notes are not subject to any sinking fund.

The
Notes may be redeemed, in whole or in part, at any time at the option of the
Company at a Redemption Price equal to the greater of: (1) 100% of the
principal amount of the Notes to be redeemed, or (2) the sum of the present
values of the remaining scheduled payments of principal and interest thereon
(exclusive of interest accrued to the Redemption Date) discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the applicable treasury rate (as defined below) plus
25 basis points, plus accrued and unpaid interest on the amount being redeemed
to the Redemption Date.

“Treasury
rate” means, with respect to any Redemption Date:

·              the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated “H.15(519)” or any successor publication which is published weekly
by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded U.S. Treasury securities adjusted to constant
maturity under the caption “Treasury Constant Maturities,” for the maturity
corresponding to the comparable treasury issue (if no maturity is within three
months before or after the remaining life (as defined below), yields for the
two published maturities most 

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closely
corresponding to the comparable treasury issue will be determined and the
treasury rate will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month); or

·              if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the comparable
treasury issue, calculated using a price for the comparable treasury issue
(expressed as a percentage of its principal amount) equal to the comparable
treasury price for such Redemption Date.

The
treasury rate will be calculated by the Independent Investment Banker on the
third Business Day preceding the date fixed for redemption.

“Comparable
treasury issue” means the U.S. Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term (“remaining
life”) of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term of such Notes.

“Comparable
treasury price” means (1) the average of five Reference Treasury Dealer
quotations for such Redemption Date, after excluding the highest and lowest
Reference Treasury Dealer Quotations, or (2) if the Independent Investment
Banker obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such quotations.

“Independent
Investment Banker” means one of the Reference Treasury Dealers appointed by the
Company to act as the “Independent Investment Banker.”

“Reference
Treasury Dealers” means each of UBS Securities LLC and Citigroup Global
Markets Inc. and their
respective successors and three other nationally recognized investment banking
firms that are Primary Treasury Dealers specified from time to time by the
Company; provided, however, that if any of the foregoing shall cease to be a
primary US Government securities dealer in the United States (a “Primary
Treasury Dealer”), the Company shall substitute therefor another nationally
recognized investment banking firm that is a Primary Treasury Dealer.

“Reference
Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any Redemption Date, the average, as determined by the Independent
Investment Banker, of the bid and asked prices for the comparable treasury
issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Independent Investment Banker at 5:00 p.m., New York City
time, on the third Business Day preceding such redemption date.

The
Company may redeem the Notes in increments of $1,000.  If the Company redeems less than all of the
Notes, the Trustee will select the Notes to be redeemed using a method it
considers fair and appropriate.  The
Company will cause notices of redemption to be mailed by first-class mail at
least 30 but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at its registered address.

If
this Note is to be redeemed in part only, the notice of redemption that relates
to this Note will state the portion of the principal amount thereof to be
redeemed.  The Company will issue a Note
in principal amount equal to the unredeemed portion of this Note in the name of
the Holder hereof upon cancellation of the original Note.  Any Notes called for redemption will 

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become
due on the Redemption Date.  On or after
the Redemption Date, interest will cease to accrue on the Notes or portions of
them called for redemption.

If
a Change of Control Repurchase Event (defined below) occurs, unless the Company
has previously exercised its right to otherwise redeem the Notes as described
above, the Company will make an offer to each Holder of Notes to repurchase all
or any part (in multiples of $1,000 principal amount) of that Holder’s Notes at
a repurchase price in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus any accrued and unpaid interest on the Notes repurchased
to the date of repurchase. Within 30 days following any Change of Control
Repurchase Event or, at the Company’s option, prior to any Change of Control
(defined below), but after the public announcement of the Change of Control,
the Company will mail a notice to each Holder describing the transaction or
transactions that constitute or may constitute the Change of Control Repurchase
Event and offering to repurchase Notes on the payment date specified in the
notice, which date will be no earlier than 30 days and no later than 60 days
from the date such notice is mailed. The notice shall, if mailed prior to the
date of consummation of the Change of Control, state that the offer to
repurchase is conditioned on the Change of Control Repurchase Event occurring
on or prior to the payment date specified in the notice.

The
Company will comply with the requirements of Rule 14e-1 under the Securities
Exchange Act of 1934, as amended, (the “Exchange Act”), and any other
securities laws and regulations to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control Repurchase Event. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control Repurchase
Event provisions of the Notes, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Change of Control Repurchase Event provisions of the
Notes by virtue of such conflict.

On
the Change of Control Repurchase Event payment date, the Company will, to the
extent lawful:

(1)           accept for payment all Notes or
portions of Notes properly tendered pursuant to its offer;

(2)           deposit with the paying agent an
amount equal to the aggregate purchase price in respect of all Notes or
portions of Notes properly tendered; and

(3)           deliver or cause to be delivered to
the Trustee the Notes properly accepted, together with an officers’ certificate
stating the aggregate principal amount of Notes being purchased by the Company.

The
Paying Agent will promptly pay, from funds deposited by the Company for such
purpose, to each Holder of Notes properly tendered the purchase price for the
Notes, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book-entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of any Notes surrendered.

The
Company will not be required to make an offer to repurchase the Notes upon a
Change of Control Repurchase Event if a third party makes an offer in the
manner, at the times and otherwise in compliance with the requirements for an
offer made by the Company and such third party purchases all Notes properly
tendered and not withdrawn under its offer.

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For purposes of the Notes:

“Change of Control
Repurchase Event” means the occurrence of both a Change of Control and a Below
Investment Grade Rating Event.

“Change
of Control” means the occurrence of any of the following:

(1)           the direct or indirect sale,
transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or substantially
all of the Company’s properties or assets and those of its subsidiaries, taken
as a whole, to any “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), other than the Company or one of its wholly owned subsidiaries;
or

(2)           the adoption of a plan relating to
the liquidation or dissolution of the Company; or

(3)           the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of
which is that any “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), other than the Company or one of its wholly owned subsidiaries
(provided that this exception does not include any transaction in which public
stockholders cease to own Voting Stock entitling public stockholders to elect
the same percentage of the members of the Company’s board of directors as
public stockholders are entitled to elect on January 17, 2007), becomes the
beneficial owner, directly or indirectly, of more than 50% of the Company’s
Voting Stock, measured by voting power rather than number of shares; or

(4)           the first day on which a majority of
the members of the Company’s board of directors are not Continuing Directors.

Notwithstanding
the foregoing, a transaction effected to create a holding company for the
Company will not be deemed to involve a Change of Control if (1) pursuant to
such transaction the Company becomes a wholly owned subsidiary of such holding
company and (2) the holders of the Voting Stock of such holding company
immediately following such transaction are the same as the holders of the
Company’s Voting Stock immediately prior to such transaction.

“Continuing
Directors” means, as of any date of determination, any member of the Company’s
board of directors who:

(1)           was a member of such board of
directors on January 22, 2007; or

(2)           was nominated for election or elected
to the Company’s board of directors with the approval of a majority of the
Continuing Directors who were members of the Company’s board of directors at
the time of such nomination or election.

“Voting
Stock” as applied to stock of any person, means shares, interests,
participations or other equivalents in the equity interest (however designated)
in such person having ordinary voting power for the election of the directors
(or the equivalent) of such person, other than shares, interests,
participations or other equivalents having such power only by reason of the
occurrence of a contingency.

“Below
Investment Grade Rating Event” means the Notes are rated below Investment Grade
by both Rating Agencies on any date from the date of the public notice of an
arrangement that could result in a Change of Control until the end of the
60-day period following public notice of the occurrence of a Change of Control
(which period shall be extended so long as the rating of the Notes is under
publicly announced consideration for possible downgrade by either 

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of
the Rating Agencies); provided that a Below Investment Grade Rating Event
otherwise arising by virtue of a particular reduction in rating shall not be deemed
to have occurred in respect of a particular Change of Control (and thus shall
not be deemed a Below Investment Grade Rating Event for purposes of the
definition of Change of Control Repurchase Event) if the Rating Agencies making
the reduction in rating to which this definition would otherwise apply do not
announce or publicly confirm or inform the Trustee in writing at its request
that the reduction was the result, in whole or in part, of any event or
circumstance comprised of or arising as a result of, or in respect of, the
applicable Change of Control (whether or not the applicable Change of Control
shall have occurred at the time of the Below Investment Grade Rating Event).

“Investment
Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any
successor rating categories of Moody’s) and BBB- or better by S&P (or its
equivalent under any successor rating categories of S&P) (or, in each case,
if such Rating Agency ceases to rate the Notes for reasons outside of the
Company’s control, the equivalent investment grade credit rating from any
Rating Agency selected by the Company as a replacement Rating Agency).

“Rating Agency” means:

(1)           each of Moody’s and S&P; and

(2)           if either of Moody’s or S&P
ceases to rate the Notes or fails to make a rating of the Notes publicly
available for reasons outside of the Company’s control, a “nationally
recognized statistical rating organization” within the meaning of Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a
replacement agency for Moody’s or S&P, or both, as the case may be.

“Moody’s”
means Moody’s Investors Service, Inc.

“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

As
provided in and subject to the provisions of the Indenture, the Holder of this
Note shall not have the right to institute any proceeding with respect to the
Indenture or for the appointment of a receiver or trustee or for any other
remedy thereunder, unless such Holder shall have previously given the Trustee
written notice of a continuing Event of Default with respect to the Notes, the
Holders of not less than 25% in principal amount of the Notes at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of the Notes at the time Outstanding
a direction inconsistent with such request, and shall have failed to institute
any such proceeding, for 60 days after receipt of such notice, request and
offer of indemnity. The foregoing shall not apply to any suit instituted by the
Holder of this Note for the enforcement of any payment of principal hereof or
any interest on or after the respective due dates expressed herein.

The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Notes under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Notes. The Indenture
also contains provisions permitting the Holders of not less than a majority in
principal amount of the Notes at the time Outstanding, on behalf of the 

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Holders
of all Notes, to waive compliance by the Company with certain provisions of the
Indenture. Furthermore, provisions in the Indenture permit the Holders of not
less than a majority of the aggregate principal amount of the Outstanding Notes
to waive, in certain circumstances, on behalf of all Holders of the Notes,
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.

No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and interest on, this Note
at the times, places and rate, and in the coin or currency, herein and in the
Indenture prescribed.

As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Security Register upon
surrender of this Note for registration of transfer at the office or agency of
the Company maintained for the purpose in any place where the principal of and
interest on this Note are payable, duly endorsed by or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by the Holder hereof or by his attorney duly authorized
in writing, and thereupon one or more new Notes of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.

This
Note may be transferred, in whole but not in part, only to a nominee of DTC, or
by a nominee of DTC to DTC, or to a successor to DTC for such Global Security
selected or approved by the Company or to a nominee of such successor to DTC.
If at any time DTC notifies the Company that it is unwilling or unable to
continue as depositary for the Notes or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act, if so required by applicable
law or regulation, the Company shall appoint a successor depositary with
respect to the Notes. If (a) a successor depositary for the Notes is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such unwillingness, inability or ineligibility, (b) an
Event of Default has occurred and is continuing and the beneficial owners
representing a majority in principal amount of the Notes advise DTC to cease acting
as depositary for such Notes, or (c) the Company, in its sole discretion,
determines at any time that all Notes (but not less than all) of this series
shall no longer be represented by such Global Note or Notes, then the Company
shall execute, and the Trustee shall authenticate and deliver, definitive Notes
of like series, rank, tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Note or Notes.

The
Notes are issuable only in registered form without coupons and may be sold in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes of
this series are exchangeable for a like aggregate principal amount of Notes of
this series in authorized denominations as requested by the Holders
surrendering the same. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

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Prior
to due presentment of the Note for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Note is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.

The
Indenture contains provisions whereby (i) the Indenture shall cease to be
of further effect with respect to the Notes (subject to the survival of certain
provisions thereof), (ii) the Company may be discharged from its
obligations with respect to the Notes (subject to certain exceptions), or
(iii) the Company may be released from its obligations under specified
covenants and agreements in the Indenture, in each case if the Company
satisfies certain conditions provided in the Indenture.

No
recourse shall be had for the payment of the principal of or interest on this
Note, or for any claim based hereon, or otherwise in respect hereof, or based
on or in respect of the Indenture or any indenture supplemental thereto,
against any past, present or future stockholder, employee, officer or director,
as such, of the Company or of any successor, either directly or through the
Company or any successor, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.

THE
INDENTURE AND THE NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF CALIFORNIA, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SAID STATE.

Pursuant
to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP numbers to be printed
on the Notes as a convenience to the Holders of the Notes. No representation is
made as to the correctness or accuracy of such CUSIP numbers as printed on the
Notes, and reliance may be placed only on the other identification numbers
printed hereon.

All
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

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ASSIGNMENT
FORM

FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY

SELLS, ASSIGNS AND TRANSFERS TO

PLEASE
INSERT SOCIAL

SECURITY OR OTHER IDENTIFYING

NUMBER OF ASSIGNEE

	
  

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please Print or Typewrite Name and Address

  
	
  including
  Zip Code of Assignee)

  
	
   

  
	
   

  

 

	
  the within Note of 

  	
                                

  	
                      

  	
                 

  	
   and 

  	
                                    

  	
                                

  	
   hereby does 

  	
   

  

irrevocably constitute and appoint

	
  

  
	
   

  
	
  Attorney to
  transfer said Note on the books of the within-named Company with full power
  of substitution in the premises.

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  
	
  NOTICE: The signature to this assignment must
  correspond with the name as it appears on the first page of the within Note
  in every particular, without alteration or enlargement or any change
  whatever.

  

 

 11EXHIBIT 10.1

Execution Copy

TERMINATION AND MUTUAL RELEASE (this “Agreement”),
dated as of January 21, 2007, among Paramount Acquisition Corp., a Delaware
corporation (“Paramount”), BioValve
Technologies Inc., a Delaware corporation (“BioValve”), BTI
Tech, Inc. a Delaware corporation (“BTI”), and
Valeritas LLC, a Delaware limited liability company (the “Company”).

Paramount,
BioValve, BTI and the Company are parties to the Contribution Agreement, dated
as of August 25, 2006 (the “Contribution Agreement”).  Capitalized
terms used herein but not defined herein shall have the meanings given to such
terms in the Contribution Agreement).

In consideration the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto, agree as follows:

Section
1. Termination.  Pursuant
to Section 10.1(a) of the Contribution Agreement, Paramount, BioValve and BTI
mutually agree that the Contribution Agreement is terminated effective
immediately and is void and of no effect, without any liability or obligation
on the part of Paramount, BioValve, BTI or the Company other than with respect
to Sections 5.8, 5.13, 5.17, 5.18 and Article 11 of the Contribution Agreement,
which provisions shall survive such termination.

Section
2. Release by BioValve Parties and Covenant not to Sue.  BioValve, BTI and the Company, on behalf of
themselves and each of their officers, directors, employees, agents, attorneys,
representatives, predecessors, successors, parents, subsidiaries, affiliates,
heirs and assigns (collectively, the “BioValve
Parties”), hereby discharge and release, unconditionally, absolutely
and forever, Paramount and its officers, directors, employees, agents,
attorneys, representatives, predecessors, successors, parents, subsidiaries,
affiliates, heirs and assigns (collectively, the “Paramount Parties”), of and from any and all liabilities,
judgments, rights, claims, demands, suits, matters, obligations, damages,
debts, losses, costs, actions and causes of action, of every kind and
description in each case arising out of or related to the negotiation,
discussion, execution, delivery and performance of the Contribution Agreement
and the transactions contemplated thereby (collectively, “Claims”), whether in law or equity,
whether presently known or unknown, from the beginning of time to the date of
this Agreement.  Each of the BioValve
Parties covenant and agree that they will not at any time hereafter commence,
maintain, or prosecute any civil, administrative or other action, suit,
proceeding, or charge, relating to any Claims released hereunder, against any
of the Paramount Parties.  The BioValve
Parties acknowledge and agree that if they should hereafter make any Claim or
commence or threaten to commence any Claim against the Paramount Parties with
respect to any cause, matter or thing that is the subject of this Section 2,
this Agreement may be raised as a complete bar to any such Claim, and the
applicable Paramount Parties shall be entitled to recover from the BioValve
Parties all costs incurred in connection with such Claim, including attorneys’
fees and costs.

Section
3. Release by Paramount and Covenant not to Sue.  The Paramount Parties hereby discharge and
release, unconditionally, absolutely and forever, the BioValve Parties, of and
from any and all Claims, whether in law or equity, whether presently known or
unknown, from the beginning of time to the date of this Agreement.  Each of the Paramount 

Parties covenant and agree that they will not at any
time hereafter commence, maintain, or prosecute any civil, administrative or
other action, suit, proceeding, or charge, relating to any Claims released
hereunder, against any of the BioValve Parties. 
The Paramount Parties acknowledge and agree that if they should
hereafter make any Claim or commence or threaten to commence any Claim against
the BioValve Parties with respect to any cause, matter or thing that is the subject
of this Section 3, this Agreement may be raised as a complete bar to any such
Claim, and the applicable BioValve Parties shall be entitled to recover from
the Paramount Parties all costs incurred in connection with such Claim,
including attorneys’ fees and costs.

Section
4. No Liability.  Each of
the parties hereto acknowledge and agree that this Agreement does not
constitute an admission by any party of any breach of the Contribution
Agreement or any other agreement or commitments among the parties hereto.

Section
5. Authority, etc.  Each party
represents and warrants that (i) such party has full power and authority to
enter into this Agreement and that this Agreement constitutes a legal, valid
and binding obligation of such party, enforceable against such party in
accordance with its terms, (ii) no consent, approval, license, permit, order or
authorization of, registration, declaration or filing with, or notice to, any
Person is required by or with respect to such party in connection with the
execution and delivery by such party of this Agreement and the compliance by
such party with the provisions hereof (except for those already obtained or
made), and (iii) the execution and delivery by such party of this
Agreement and the compliance by such party with the provisions hereof do not
and will not conflict with, or result in any material violation or default
(with or without notice or lapse of time or both) under, or give rise to a
right of, or result in, termination, cancellation or acceleration of any
obligation or to a loss of a material benefit under, or result in the creation
of any Lien in or upon any of the properties or assets of such party under, or
give rise to any increased, additional, accelerated or guaranteed rights or
entitlements under, any provision of the Constitutive Documents of such party,
any material Contract to which such party is a party or bound by or its properties
or assets are bound by or subject to or otherwise under which such party has
rights or benefits or any material Law or Judgment, in each case, applicable to
such party or its properties or assets.

Section
3.  Full Force and Effect.  This Agreement shall become, and be deemed to
be, effective upon its execution and delivery by the parties hereto.

Section
4.  Governing Law.  This Agreement for all purposes shall be
governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts executed in and to be performed entirely in such
State.

Section
5.  Counterparts.  This Amendment may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

[SIGNATURE PAGE FOLLOWS]

 2
 

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.

	
   

  	
   

  	
  PARAMOUNT ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BIOVALVE
  TECHNOLOGIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Robert R.
  Gonnelli

  
	
   

  	
   

  	
  Title: President
  and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BTI TECH, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Robert R.
  Gonnelli

  
	
   

  	
   

  	
  Title: President
  and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VALERITAS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  BY: 

  	
  BIOVALVE
  TECHNOLOGIES INC.,

  
	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Robert R.
  Gonnelli

  
	
   

  	
   

  	
  Title: Manager

  

 

 3

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