SEC Filing | Calliditas Therapeutics AB

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As filed with the Securities and Exchange Commission on July 12, 2021

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Calliditas Therapeutics AB

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

Sweden

(State or other jurisdiction of
incorporation or organization)

Not Applicable

(I.R.S. Employer
Identification No.)

Kungsbron 1, C8
SE-111 22
Stockholm, Sweden
Tel: +46 (0) 8 411 3005

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Calliditas Therapeutics Inc.
251 Little Falls Drive
Wilmington, Delaware 19808-1674
(302) 636-5400

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Kristopher D. Brown
James Xu
Janet Hsueh
Goodwin Procter LLP
620 Eighth Avenue
New York, NY 02109
(212) 813-8800

Dain Hard Nevonen
Linnéa Sellstrom
Advokatfirman Vinge KB
Stureplan 8, Box 1703
SE-111 87
Stockholm, Sweden
+46(0) 10 614 30 00

Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration statement.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☒

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company ☒

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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

CALCULATION OF REGISTRATION FEE

Title of Each Class of
Securities to be Registered

Amount
to be
Registered(1)

Proposed
Maximum
Offering
Price per
Security(1)

Proposed
Maximum
Aggregate
Offering
Price(2)

Amount of
Registration
Fee(3)

Common Shares, quota value SEK 0.04 per share(1)(4)

Debt Securities(1)

Warrants(1)

Units(1)

Total

(1)

There are being registered under this registration statement such indeterminate number of common shares, debt securities, warrants to purchase common shares and a combination of such securities, separately or as units, as may be sold by the registrant from time to time. The securities registered hereunder also include such indeterminate number of common shares as may be issued upon conversion, exercise or exchange of warrants that provide for such conversion into, exercise for or exchange into common shares. In addition, pursuant to Rule 416 under the Securities Act of 1933, as amended, or the Securities Act, the common shares being registered hereunder include such indeterminate number of common shares as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends, or similar transactions.

(2)

An unspecified number of securities or aggregate principal amount, as applicable, is being registered as may from time to time be offered at unspecified prices and, in addition, an unspecified number of additional common shares are being registered as may be issued from time to time upon conversion of any debt securities that are convertible into common shares or pursuant to any anti-dilution adjustments with respect to any such convertible debt securities.

(3)

In reliance on, and in accordance with Rules 456(b) and 457(r) under the Securities Act of 1933, as amended, or the Securities Act, the Registrant is registering an unspecified amount of securities of each identified class of securities that may be registered hereunder and deferring payment of all of the registration fee. Any registration fees will be paid subsequently on a pay-as-you-go basis in accordance with Rule 457(r).

(4)

The common shares registered hereby may be represented by the Registrant’s American Depositary Shares, or ADSs, each of which represents two common shares of the Registrant. ADSs issuable upon deposit of the common shares registered hereby have been registered pursuant to a separate registration statement on Form F-6 (File No. 333-238726).

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PROSPECTUS

Common Shares
Common Shares in the Form of American Depositary Shares
Debt Securities
Warrants
Units

We may offer, issue and sell the securities identified above from time to time in one or more offerings. This prospectus provides you with a general description of the securities.

Each time we offer and sell our securities pursuant to this prospectus, we will provide a supplement to this prospectus that contains specific information about the offering, as well as the amounts, prices and terms of the securities. The supplement may also add, update or change information contained in this prospectus with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement, together with the documents we incorporate by reference, before you invest in any of our securities.

We may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters, dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement. See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution” for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the offering of such securities.

Our common shares may be represented by American Depository Shares, or ADSs. Each ADS represents two common shares. ADSs representing our common shares are listed on The Nasdaq Global Select Market under the symbol “CALT.” On July 9, 2021, the last reported sale price of the ADSs on The Nasdaq Global Select Market was $32.00 per ADS.

Our common shares are traded on Nasdaq Stockholm under the symbol “CALTX.” The closing price of our shares on Nasdaq Stockholm on July 9, 2021 was SEK 137.8 per share, which equals a price of $32.05 per ADS based on the SEK/U.S. dollar exchange rate of SEK 8.60 to $1.00 as of July 9, 2021 and an ADS-to-share ratio of 1:2.

Investing in these securities involves certain risks. Please refer to the risks described in the “Risk Factors” section beginning on page 4 of this prospectus, as well as in any document incorporated by reference in this prospectus or set forth in any accompanying prospectus supplement for a description of risks you should consider when evaluating an investment in the debt securities described herein.

None of the Securities and Exchange Commission, any state securities commission, the Swedish Financial Supervisory Authority or any other foreign securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is July 12, 2021.

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	Page
ABOUT THIS PROSPECTUS		1
PRESENTATION OF FINANCIAL INFORMATION		1
OUR BUSINESS		3
RISK FACTORS		4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		4
USE OF PROCEEDS		6
THE SECURITIES WE MAY OFFER		7
DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION		8
OTHER FINANCIAL INFORMATION		16
DESCRIPTION OF AMERICAN DEPOSITARY SHARES		26
DESCRIPTION OF DEBT SECURITIES		37
DESCRIPTION OF WARRANTS		45
DESCRIPTION OF UNITS		46
TAXATION		47
PLAN OF DISTRIBUTION		48
LEGAL MATTERS		51
EXPERTS		52
ENFORCEABILITY OF CIVIL LIABILITIES		53
WHERE YOU CAN FIND ADDITIONAL INFORMATION		54
INCORPORATION BY REFERENCE		55
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES		56
EXPENSES		57
CONSOLIDATED FINANCIAL STATEMENTS		F-1

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, as a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act of 1933, as amended, using a “shelf” registration process. Under this shelf registration process, we may sell our securities described in this prospectus from time to time and in one or more offerings. Each time we offer our securities, we will provide you with a supplement to this prospectus that will describe the specific amounts, prices and terms of the securities we offer. The prospectus supplement may also add, update or change information contained in this prospectus. This prospectus, together with applicable prospectus supplements and the documents incorporated by reference in this prospectus and any prospectus supplements, includes all material information relating to this offering. Please read carefully both this prospectus and any prospectus supplement together with additional information described below under “Where You Can Find Additional Information” and “Incorporation by Reference.”

You should rely only on the information contained in or incorporated by reference in this prospectus and any applicable prospectus supplement. We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities described in this prospectus. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously filed with the SEC and incorporated by reference, is accurate as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus may not be used to consummate a sale of our securities unless it is accompanied by a prospectus supplement.

For investors outside the United States: We have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the case of the U.S. Persons outside the U.S. who come into possession of this prospectus, who must inform themselves of, and observe any restrictions relating to, the offering of the securities and the distribution of this prospectus outside the U.S.

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to the terms “Calliditas Therapeutics AB,” “Calliditas Therapeutics,” “Calliditas,” “the company,” “we,” “us” and “our” refer to Calliditas Therapeutics AB and its wholly owned subsidiaries.

We own various trademark registrations and applications, and unregistered trademarks, including CALLIDITAS (registered in the European Union and filed a United States trademark application), CALLIDITAS THERAPEUTICS (filed a United States trademark application), PHARMALINK (registered in the United States and Sweden) and NEFECON (registered in the United States, Sweden and the European Union) and our corporate logo. All other trade names, trademarks and service marks of other companies appearing in this prospectus are the property of their respective holders. Solely for convenience, the trademarks and trade names in this prospectus may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trademarks, trade names or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC. As permitted by the rules and regulations of the SEC, the registration statement filed by us includes additional information not contained in this prospectus. You may read the registration statement and the other reports we file with the SEC at the SEC’s website or its offices described below under the heading “Where You Can Find Additional Information.”

PRESENTATION OF FINANCIAL INFORMATION

We prepare our audited consolidated financial statements in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. None

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of our financial statements were prepared in accordance with generally accepted accounting principles in the United States. All references in this prospectus to “$” are to U.S. dollars and all references to “SEK” are to Swedish Kronor. Unless otherwise indicated, certain SEK amounts contained in this prospectus have been translated into U.S. dollars at the rate of SEK 8.60 to $1.00, which was the rate of Sveriges Riksbank on July 9, 2021. These translations should not be considered representations that any such amounts have been, could have been or could be converted into SEK at that or any other exchange rate as of that or any other date.

We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them. Our historical consolidated financial statements present the consolidated results of operations of Calliditas Therapeutics AB and its wholly owned subsidiaries.

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OUR BUSINESS

We are a clinical-stage biopharmaceutical company focused on identifying, developing and commercializing novel treatments in orphan indications, with an initial focus on renal and hepatic diseases with significant unmet medical needs. Our lead product candidate, Nefecon, is a proprietary, novel oral formulation of budesonide, an established, highly potent local immunosuppressant, for the treatment of the autoimmune renal disease IgA nephropathy, or IgAN, for which there is a high unmet medical need and there are no approved treatments. IgAN is a progressive, chronic disease that over time results in deterioration of kidney function in patients, many of whom end up at risk of developing end-stage renal disease, or ESRD, with the need for dialysis or kidney transplant. Nefecon is currently the only pharmaceutical candidate in development for IgAN that is intended to be disease-modifying. Nefecon targets the ileum, the distal region of the small intestine, which is the presumed origin of IgAN due to the ileum being the location of the highest concentration of the Peyer’s patches, which are responsible for the production of secretory immunoglobulin A, or IgA, antibodies. Nefecon is the only compound in development for IgAN that has met the primary and key secondary endpoints in a randomized, double-blind, placebo-controlled Phase 3 clinical trial. Nefecon has been granted orphan drug designation for the treatment of IgAN in the United States and the European Union. We also recently acquired a controlling interest in Genkyotex S.A., or Genkyotex, providing us with access to a novel platform of Nicotinamide adenine dinucleotide phosphate, oxidase, or NOX, inhibitors, which we intend to primarily develop for orphan diseases with fibrotic components, with a main focus on kidney and liver diseases.

We were founded in accordance with Swedish law on February 20, 2004 under the name Pharmalink AB and were registered with the Swedish Companies Registration Office on April 15, 2004. On September 19, 2017, we changed our name to Calliditas Therapeutics AB. We have one wholly-owned subsidiary, located in Sweden and two wholly-owned subsidiaries in the United States. The U.S. subsidiaries are Calliditas Therapeutics US Inc. and Calliditas NA Enterprises Inc., and the Swedish subsidiary is Nefecon AB. We have two additional subsidiaries, Genkyotex S.A., located in France, and Genkyotex Suisse S.A., located in Switzerland.

Our registered office is located at Kungsbron 1, C8, SE-111 22, Stockholm, Sweden, and our telephone number is +46 (0) 8 411 3005. Our website address is www.calliditas.com. We have included our website address in this prospectus solely as an inactive textual reference. The information contained on or accessible through our website is not incorporated by reference into this prospectus.

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RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider the risks described in the documents incorporated by reference in this prospectus and any prospectus supplement, as well as other information we include or incorporate by reference into this prospectus and any applicable prospectus supplement, before making an investment decision. Our business, financial condition or results of operations could be materially adversely affected by the materialization of any of these risks. The trading price of our securities could decline due to the materialization of any of these risks, and you may lose all or part of your investment. This prospectus and the documents incorporated herein by reference also contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described in the documents incorporated herein by reference, including (i) the Annual Report on Form 20-F for the year ended December 31, 2020 filed with the SEC on April 27, 2021 (File No. 001-39308), which is incorporated herein by reference, and (ii) other documents we file with the SEC that are deemed incorporated by reference into this prospectus.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains express or implied forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in this prospectus are based upon information available to our management as of the date of this prospectus and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

•

the timing, progress and results of our ongoing Phase 3 clinical trial for Nefecon and development plans for sentanaxib or any other future product candidates;

•

the potential attributes and benefits of Nefecon, sentanaxib and other product candidates and their competitive position with respect to alternative treatments;

•

the timing, scope or likelihood of domestic and foreign regulatory filings and approvals;

•

the potential benefit of orphan drug designation, the FDA’s accelerated approval pathway, the EMA’s conditional approval pathway, the FDA’s Section 505(b)(2) pathway and the EMA’s hybrid application pathway for Nefecon or any other future product candidates;

•

our ability and plans to use proteinuria as the primary endpoint for our Phase 3 clinical trial for Nefecon to support approval by the FDA, EMA or comparable foreign regulatory authorities;

•

our ability to successfully identify and develop other potential product candidates;

•

the impact of the COVID-19 pandemic to our business and clinical trials as well as supply of our product candidates;

•

our expectations regarding the potential market size and the size of the patient populations for our product candidates, if approved for commercial use;

•

our manufacturing, commercialization and marketing capabilities and strategy;

•

the rate and degree of market acceptance and clinical utility of Nefecon, sentanaxib and any future product candidates;

•

the timing of our submission of marketing applications to the FDA and EMA for Nefecon;

•

the anticipated benefits of our acquisition of Genkyotex S.A., or Genkyotex;

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•

our ability to integrate Genkyotex’s operations, pipeline of product candidates and personnel with our business;

•

our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals, including sales and marketing personnel if Nefecon or other future product candidates are approved;

•

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

•

our competitive position, and developments and projections relating to our competitors and our industry, including estimates of the size and growth potential of the markets for our product candidates;

•

our plans to enter into collaborations for commercialization of Nefecon, sentanaxib or any future product candidates;

•

whether we are classified as a passive foreign investment company for current and future periods;

•

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•

our exposure to additional scrutiny as a U.S. public company;

•

our expectations regarding the time during which we will be an emerging growth company under the JOBS Act;

•

our use of proceeds from this offering; and

•

the impact of laws and regulations.

You should refer to the section titled “Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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USE OF PROCEEDS

Except as otherwise provided in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the securities offered by this prospectus for general corporate purposes, which may include working capital, capital expenditures, research and development expenditures, regulatory affairs expenditures, clinical trial expenditures, acquisitions of new technologies and investments, and the repayment, refinancing, redemption or repurchase of future indebtedness or capital stock.

The intended application of proceeds from the sale of any particular offering of securities using this prospectus will be described in the accompanying prospectus supplement relating to such offering. The precise amount and timing of the application of these proceeds will depend on our funding requirements and the availability and costs of other funds.

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THE SECURITIES WE MAY OFFER

The descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize all the material terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement relating to any securities the particular terms of the securities offered by that prospectus supplement. If we indicate in the applicable prospectus supplement, the terms of the securities may differ from the terms we have summarized below. We will also include in the prospectus supplement information, where applicable, about material United States federal income tax considerations relating to the securities, and the securities exchange, if any, on which the securities will be listed.

We may sell from time to time, in one or more offerings:

•

common shares;

•

common shares represented by ADSs;

•

series of senior or subordinated debt securities;

•

warrants to purchase common shares which may be represented by ADSs; and/or

•

units consisting of one or more of the foregoing

The terms of any securities we offer will be determined at the time of sale. We may issue securities that are exchangeable for or convertible into common shares or any of the other securities that may be sold under this prospectus. When particular securities are offered, a supplement to this prospectus will be filed with the SEC, which will describe the terms of the offering and sale of the offered securities. This prospectus may not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement.

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DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION

Introduction

Set forth below is a summary of certain information concerning our share capital as well, as a description of certain provisions of our articles of association and relevant provisions of the Swedish Companies Act. The summary below contains only material information concerning our share capital and corporate status and does not purport to be complete and is qualified in its entirety by reference to our articles of association and applicable Swedish law. Further, please note that as a holder of ADSs, you will not be treated as one of our shareholders and will not have any shareholder rights.

General

We were founded in accordance with Swedish law on February 20, 2004 under the name Pharmalink AB and were registered with the Swedish Companies Registration Office on April 15, 2004. On September 19, 2017, we changed our name to Calliditas Therapeutics AB. Our common shares have been listed for trading on Nasdaq Stockholm since June 29, 2018 under the ticker “CALTX.” Our ADSs have been listed for trading on The Nasdaq Global Select Market since June 5, 2020 under the ticker “CALT.”

We have one wholly-owned subsidiary located in Sweden and two wholly-owned subsidiaries in the United States. The U.S. subsidiaries are Calliditas Therapeutics US Inc. and Calliditas NA Enterprises Inc. and the Swedish subsidiary is Nefecon AB. We have two additional subsidiaries, Genkyotex S.A., located in France, and Genkyotex Suisse S.A., located in Switzerland.

Common Shares

All of our outstanding common shares have been validly issued, fully paid and non-assessable, and are not redeemable and do not have any preemptive rights other than under the Swedish Companies Act as described below. In accordance with our articles of association, all of the common shares are in one class of shares, denominated in SEK. As of March 31, 2021, we had issued and outstanding 49,941,584 common shares.

The development in the number of shares since our foundation in 2004 is shown below.

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Year	Transaction	Nominal Value		Subscription Price per Share (SEK)		Increase in Number of Shares		Increase in Share Capital (SEK)		Total Number of Shares		Total Share Capital (SEK)
2004	Foundation		100		—		1,000		100,000		1,000		100,000
2004	New share issue		100		25,000		12		1,200		1,012		101,200
2005	New share issue		100		50,562		178		17,800		1,190		119,000
2009	New share issue		100		60,000		132		13,200		1,322		132,000
2012	New share issue		100		52,950		664		66,400		1,986		198,600
2013	New share issue		100		52,950		813		81,300		2,799		279,900
2014	New share issue		100		52,950		189		18,900		2,988		298,800
2014	New share issue		100		52,950		809		80,900		3,797		379,700
2015	New share issue		100		52,950		756		75,600		4,553		455,300
2016	New share issue		100		52,950		752		75,200		5,305		530,500
2017	New share issue		100		52,950		605		60,500		5,910		591,000
2017	Share split (1:10)		10		—		53,190		—		59,100		591,000
2017	New share issue		10		5,295		7,026		70,260		66,126		661,260
2017	New share issue		10		5,295		566		5,660		66,692		666,920
2017	Share split (1:250)		0.04				16,606,308		—		16,673,000		666,920
2018	Conversion of bridge loans in connection with offering		0.04		45.00		2,114,903		84,596.12		18,787,903		751,516.12
2018	New share issue in connection with listing		0.04		45.00		16,414,444		656,577.76		35,202,347		1,408,093.88
2019	New share issue		0.04		60.00		3,505,291		140,211.64		38,707,638		1,548,305.52
2020	New share issue in connection with listing		0.04		89.70		9,937,446		397,497.80		48,645,084		1,945,803.40
2020	Exercise of Warrant program		0.04		42.36		1,296,500		52,860.00		49,941,584		1,997,663.40

There were no special terms or installment payments for any of the transactions listed above. There have been two changes in voting rights since we were listed on Nasdaq Stockholm in 2018 through a directed share issue in July 2019, entailing an increase of the number of shares and votes with 3,505,291 and share capital with SEK 140,211.64, and the initial public offering on the Nasdaq Global Select Market in June 2020, entailing an increase of the number of shares with 9,937,446 and share capital with SEK 397,497.80. During the period as a listed company, there has not been any reduction of amount of share capital.

At the 2021 annual general meeting held on May 27, 2021 our shareholders resolved that for the period until the 2022 annual general meeting, our board of directors would be authorized to, at one or several occasions, increase our share capital by issuing new shares. Such share issue resolution may be made with or without deviation from the shareholders’ preferential rights, where payment for new share can be made in cash, contribution in kind, debt conversion or in accordance with certain other conditions. The authorization may only be utilized to the extent that it corresponds to a dilution of not more than 20% of the total number of outstanding shares outstanding as per the time of the annual general meeting. The authorization was proposed by the board of directors to increase its financial flexibility. Should the board of directors resolve on an issue with deviation from the shareholders’ preferential rights, the reason for such deviation shall be to finance an acquisition, to procure capital to finance the continued development of projects or to commercialize our products. Any share issue under the authorization must be made at market terms and conditions. The subscription price will be determined by the board of directors. Any new shares issued on the basis of the authorization will rank pari passu with our existing shares.

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On the date of the 2021 annual general meeting, we had 49,941,584 shares outstanding. As such, under the authorization, the board of directors is authorized to issue up to 12,485,396 new shares.

Below are summaries of the material provisions of our articles of association and of related material provisions of the Swedish Companies Act.

Articles of Association

Object of the Company

Our object is set forth in Section 3 of our articles of association and is to, directly or through subsidiaries, conduct research and development as well as the manufacture and sale of pharmaceuticals and medical devices, own and manage shares and other securities as well as other tangible and intangible property, as well as any other business associated therewith.

Powers of the Directors

Our board of directors shall direct our policy and shall supervise the performance of our chief executive officer and his or her actions. Our board of directors may exercise all powers that are not required under the Swedish Companies Act or under our articles of association to be exercised or taken by our shareholders.

Number of Directors

Our articles of association provide that our board of directors shall consist of three to ten members. Our board of directors currently has five members, with no deputy members.

Rights Attached to Shares

All of the common shares have equal rights to our assets and earnings and are entitled to one vote at the general meeting. At the general meeting, every shareholder may vote to the full extent of their shares held or represented, without limitation. Each common share entitles the shareholder to the same preferential rights related to issues of shares, warrants and convertible bonds relative to the number of shares they own and have equal rights to dividends and any surplus capital upon liquidation. Shareholders’ rights can only be changed in accordance with the procedures set out in the Swedish Companies Act. Transfers of shares are not subject to any restrictions.

Exclusive Forum

Our articles of association provide that, unless we consent in writing to the selection of an alternative forum and without any infringement on Swedish forum provisions and without applying Chapter 7, Section 54 of the Swedish Companies Act, the United States District Court for the Southern District of New York shall be the sole and exclusive forum for resolving any complaint filed in the United States asserting a cause of action arising under the Securities Act, or the Federal Forum Provision. We recognize that the proposed Federal Forum Provision may impose additional litigation costs on shareholders in pursuing any such claims, particularly if the shareholders do not reside in or near the State of New York. Additionally, proposed Federal Forum Provision may limit our shareholders’ ability to bring a claim in a U.S. judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our shareholders.

Preemptive Rights

Under the Swedish Companies Act, shareholders of any class of shares will generally have a preemptive right to subscribe for shares or warrants issued of any class in proportion to their shareholdings. Shareholders will have preferential rights to subscribe for new shares in proportion to the number of shares they own. If an offering is not fully subscribed for based on subscription rights, shares may be allocated to subscribers without subscription rights. The preemptive right to subscribe does not apply in respect of shares issued

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for consideration by payment in kind or of shares issued pursuant to convertible debentures or warrants previously issued by the company.

The preemptive right to subscribe for new shares may be set aside. A share issue with deviation from the shareholders’ preemptive rights may be resolved either by the shareholders at a general meeting, or by the board of directors if the board resolution is preceded by an authorization therefor from the general meeting. A resolution to issue shares with deviation from the shareholders’ preemptive rights and a resolution to authorize the board of directors to do the same must be passed by two-thirds of both the votes cast and the shares represented at the general meeting resolving on the share issue or the authorization of the board of directors.

Voting at Shareholder Meetings

Under the Swedish Companies Act, shareholders entered into the shareholders’ register as of the record date are entitled to vote at a general meeting (in person or by appointing a proxyholder). In accordance with our articles of association, shareholders must give notice of their intention to attend the general meeting no later than the date specified in the notice. Shareholders who have their shares registered through a nominee and wish to exercise their voting rights at a general meeting must request to be temporary registered as a shareholder and entered into the shareholders’ register four business days prior to the date of the general meeting. In addition, the board of directors has the right before a shareholders’ meeting to decide whether shareholders shall be able to exercise their right to vote by mail before the shareholders’ meeting. The rights described herein do not apply to holders of ADSs. See “Description of American Depositary Shares.”

Shareholder Meetings

The general meeting of shareholders is our highest decision-making body and serves as an opportunity for our shareholders to make decisions regarding our affairs. Shareholders who are registered in the share register held by Euroclear Sweden AB six business days before the meeting and have notified us no later than the date specified in the notice described below have the right to participate at our general meetings, either in person or by a representative. All shareholders have the same participation and voting rights at general meetings. At the annual general meeting, inter alia, members of the board of directors are elected, the principles for the appointment of the nomination committee are established, and a vote is held on whether each individual board member and the chief executive officer will be discharged from any potential liabilities for the previous fiscal year. Auditors are elected as well. Decisions are made concerning adoption of annual reports, allocation of earnings, fees for the board of directors and the auditors, guidelines for executive remuneration and other essential matters that require a decision by the meeting. Most decisions require a simple majority but the Swedish Companies Act dictates other thresholds in certain instances. See “— Differences in Corporate Law-Shareholder Vote on Certain Transactions.”

Shareholders have the right to ask questions to our board of directors and managers at general meetings which pertain to the business of the company and also have an issue brought forward at the general meeting. In order for us to include the issue in the notice of the annual general meeting, a request of issue discussion must be received by us normally seven weeks before the meeting. Any request for the discussion of an issue at the annual general meeting shall be made to the board of directors and any request within the nomination committee’s competence shall be made to the nomination committee. The board shall convene an extraordinary general meeting if shareholders who together represent at least 10% of all shares in the company so demand in writing to discuss or resolve on a specific issue.

The arrangements for the calling of general meetings are described below in “— Differences in Corporate Law — Annual General Meeting” and “— Differences in Corporate Law — Special Meeting.”

Notices

The Swedish Companies Act requirements for notice are described below in “— Differences in Corporate Law-Notices.”

Subject to our articles of association and Nasdaq Stockholm’s Rulebook for Issuers, we must publish the full notice of a general meeting by way of press release, on our website and in the Swedish Official Gazette,

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and must also publish in the Svenska Dagbladet, a daily Swedish newspaper, that such notice has been published. The notice of the annual general meeting will be published six to four weeks before the meeting. The notice must include an agenda listing each item that shall be voted upon at the meeting. The notice of any extraordinary general meeting will be published six to three weeks before the meeting. Pursuant to the Swedish Code of Corporate Governance, which does not carry the force of law but is considered ideal corporate governance practice for Swedish companies whose shares trade on a regulated market, we shall, as soon as the time and venue for the annual general meeting have been decided, and no later than in conjunction with the third quarter report, publish such information on our website.

Record Date

Under the Swedish Companies Act, in order for a shareholder to participate in a shareholders’ meeting, the shareholder must have its shares registered in its own name in the share register for four business days. In accordance with section 8 of our articles of association, shareholders must give notice of their intention to attend the shareholders’ meeting no later than the date specified in the notice.

Amendments to the Articles of Associations

Under the Swedish Companies Act, an amendment of our articles of association requires a resolution passed at a shareholders’ meeting. The number of votes required for a valid resolution depends on the type of amendment, however, any amendment must be approved by not less than two-thirds of the votes cast and represented at the meeting. The board of directors is not allowed to make amendments to the articles of association absent shareholder approval.

Provisions Restricting Change in Control of Our Company

Neither our articles of association nor the Swedish Companies Act contains any restrictions on change of control.

Differences in Corporate Law

The applicable provisions of the Swedish Companies Act differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain differences between the provisions of, inter alia, the Swedish Companies Act applicable to us and the Delaware General Corporation Law relating to shareholders’ rights and protections. We are not subject to Delaware law but are presenting this description for comparative purposes. This summary is not intended to be a complete discussion of the respective rights and it is qualified in its entirety by reference to Delaware law and Swedish law.

	Number of Directors
	Sweden. Under the Swedish Companies Act, a public company shall have a board of directors consisting of at least three directors. More than half of the directors shall be resident within the European Economic Area (unless otherwise approved by the Swedish Companies Registration Office). The actual number of board members shall be determined by a shareholders’ meeting, within the limits set out in the company’s articles of association. Under the Swedish Code of Corporate Governance, only one director may also be a senior executive of the relevant company or a subsidiary. The Swedish Code of Corporate Governance includes certain independence requirements for the directors, and requires a majority of the directors to be independent of the company and at least two directors to also be independent of major shareholders.			Delaware. Under the Delaware General Corporation Law, a corporation must have at least one director and the number of directors shall be fixed by or in the manner provided in the bylaws. The Delaware General Corporation Law does not address director independence, though Delaware courts have provided general guidance as to determining independence, including that the determination must be both an objective and a subjective assessment.

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	Removal of Directors
	Sweden. Under the Swedish Companies Act, directors appointed at a general meeting may be removed by a resolution adopted at a general meeting, upon the affirmative vote of a simple majority of the votes cast.			Delaware. Under the Delaware General Corporation Law, unless otherwise provided in the certificate of incorporation, directors may be removed from office, with or without cause, by a majority stockholder vote, though in the case of a corporation whose board is classified, stockholders may effect such removal only for cause.
	Vacancies on the Board of Directors
	Sweden. Under the Swedish Companies Act, if a director’s tenure should terminate prematurely, the election of a new director may be deferred until the time of the next annual general meeting, providing there are enough remaining directors to constitute a quorum.			Delaware. Under the Delaware General Corporation Law, vacancies on a corporation’s board of directors, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors.
	Annual General Meeting
	Sweden. Under the Swedish Companies Act, within six months of the end of each fiscal year, the shareholders shall hold an annual general meeting at which the board of directors shall present the annual report and auditor’s report and, for a parent company which is obliged to prepare group accounts, the group accounts and the auditor’s report for the group. Shareholder meetings shall be held in the city stated in the articles of association. The minutes of a shareholders’ meeting must be made available on the company’s website no later than two weeks after the meeting.			Delaware. Under the Delaware General Corporation Law, the annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from time to time by the board of directors or as provided in the certificate of incorporation or by the bylaws. If a company fails to hold an annual meeting or fails to take action by written consent to elect directors in lieu of an annual meeting for a period of 30 days after the date designated for the annual meeting, or if no date was designated, 13 months after either the last annual meeting or the last action by written consent to elect directors in lieu of an annual meeting, whichever is later, the Delaware Court of Chancery may summarily order a meeting to be held upon the application of any stockholder or director. The Delaware General Corporation Law does not require minutes of stockholders’ meetings to be made public.
	Special Meeting
	Sweden. Under the Swedish Companies Act, the board of directors shall convene an extraordinary general meeting if a shareholder minority representing at least ten per cent of the company’s shares or the auditor of the company so demands, and the board of directors may convene an extraordinary general meeting whenever it believes reason exists to hold an extraordinary general meeting prior to the next annual general meeting.			Delaware. Under the Delaware General Corporation Law, special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.

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	Notices
	Sweden. Under the Swedish Companies Act, a shareholders’ meeting must be preceded by a notice. The notice of the annual general meeting of shareholders must be issued no sooner than six weeks and no later than four weeks before the date of an annual general meeting. In general, notice of other extraordinary general meetings must be issued no sooner than six weeks and no later than three weeks before the meeting. Publicly listed companies must always notify shareholders of a general meeting by advertisement in a Swedish newspaper, the Swedish Official Gazette, by press release, and on the company’s website.			Delaware. Under the Delaware General Corporation Law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the stockholders must be given to each stockholder entitled to vote at the meeting not less than ten nor more than 60 days before the date of the meeting and shall specify the place, date, hour, and purpose or purposes of the meeting.
	Preemptive Rights
	Sweden. Under the Swedish Companies Act, shareholders of any class of shares have a preemptive right (Sw. företrädesrätt) to subscribe for shares issued of any class in proportion to their shareholdings. The preemptive right to subscribe does not apply in respect of shares issued for consideration other than cash or of shares issued pursuant to convertible debentures or warrants previously granted by the company. The preemptive right to subscribe for new shares may also be set aside by a resolution passed by two thirds of the votes cast and shares represented at the shareholders’ meeting resolving upon the issue.			Delaware. Under the Delaware General Corporation Law, unless otherwise provided in a corporation’s certificate of incorporation, a stockholder does not, by operation of law, possess preemptive rights to subscribe to additional issuances of the corporation’s stock.
	Shareholder Vote on Certain Transactions
	Sweden. In matters which do not relate to elections and are not otherwise governed by the Swedish Companies Act or the articles of association, resolutions shall be adopted at the general meeting by a simple majority of the votes cast. In the event of a tied vote, the chairman shall have the casting vote. For matters concerning securities of the company, such as new share issuances, and other transactions such as private placements, mergers, and a change from a public to a private company (or vice-versa), the articles of association may only prescribe thresholds which are higher than those provided in the Swedish Companies Act. Unless otherwise prescribed in the articles of association, the person who receives the most votes in an election shall be deemed elected. In general, a resolution involving the alteration of the articles of association shall be valid only when supported by shareholders holding not less than two-thirds of both the votes cast and the shares represented at the general meeting. The Swedish Companies Act lays out numerous exceptions for which a higher			Delaware. Generally, under Delaware law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation, sale, lease or exchange of all or substantially all of a corporation’s assets or dissolution requires: (i) the approval of the board of directors; and (ii) approval by the vote of the holders of a majority of the outstanding stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority of the votes of the outstanding stock of a corporation entitled to vote on the matter.

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threshold applies, including restrictions on certain rights of shareholders, limits on the number of shares shareholders may vote at the general meeting, directed share issues to directors, employees and other closely related parties, and changes in the legal relationship between shares.

Stock Exchange Listing

Our common shares are currently traded on Nasdaq Stockholm under the symbol “CALTX.” Our ADSs are currently traded on The Nasdaq Global Select Market under the symbol “CALT.”

Transfer Agent and Registrar of Shares

Our share register is maintained by Euroclear. The share register reflects only record owners of our common shares. Holders of our ADSs will not be treated as our shareholders and their names will therefore not be entered in our share register. The depositary, the custodian or their nominees will be the holder of the common shares underlying our ADSs. Holders of our ADSs have a right to receive the common shares underlying their ADSs. For discussion on our ADSs and ADS holder rights, see “Description of American Depositary Shares” in this prospectus.

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OTHER FINANCIAL INFORMATION

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On November 3, 2020, Calliditas Therapeutics AB (“we”, “us”, or “our”) acquired 62.7% of the share capital in Genkyotex S.A., or Genkyotex, a biopharmaceutical company specializing in nicotinamide adenine dinucleotide phosphate oxidase, or NOX, therapies with offices in France and Switzerland, or the Initial Acquisition. On November 26, 2020, we submitted a simplified public mandatory cash offer, or the Tender Offer, to the remaining shareholders in Genkyotex. The Tender Offer closed on December 11, 2020. As a result of the Tender Offer, we increased our ownership percentage to 86.2% of the share capital of Genkyotex. Collectively, the transactions above are referred to as the “Acquisition.”

The following unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting under International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, and adopted by us and gives effect to the Acquisition. The transaction will be accounted for as an acquisition, and we will be deemed the acquiring company for accounting purposes as we own a controlling interest of the share capital and voting rights.

The following unaudited pro forma condensed combined financial statements are based on our historical financial statements and Genkyotex’s historical financial statements as adjusted to give effect to our acquisition of Genkyotex. The unaudited pro forma condensed combined statement of operations gives effect to the acquisition of Genkyotex as if it had occurred on January 1, 2019, which is the earliest year for which pro forma condensed combined financial statements are required to be presented. The unaudited pro forma condensed combined statement of financial position gives effect to the acquisition of Genkyotex as if it had occurred on September 30, 2020. This information should be read in conjunction with our and Genkyotex’s respective audited and unaudited financial statements and related notes included in in this filing.

Genkyotex’s assets and liabilities will be measured and recognized at their fair values as of the acquisition date, and combined our assets, liabilities and results of operations after the consummation of the Acquisition.

The unaudited pro forma condensed combined financial information is based on the assumptions and adjustments that are described in the accompanying notes. The application of the acquisition method of accounting is dependent upon certain valuations and other studies that have yet to be completed. Accordingly, the pro forma adjustments are preliminary, subject to further revision as additional information becomes available and additional analyses are performed, and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information. There can be no assurances that the final valuations will not result in material changes to the preliminary estimated purchase price allocation. The unaudited pro forma condensed combined financial information does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the Acquisition or any integration costs. Additionally, the unaudited pro forma condensed combined statement of operations does not include certain nonrecurring charges resulting directly from the Acquisition as described in the accompanying notes.

The unaudited pro forma condensed combined financial information is preliminary and has been prepared for illustrative purposes only and is not necessarily indicative of the financial position or results of operations in future periods or the results that actually would have been realized had we and Genkyotex been a combined company during the specified periods. The actual results reported in periods following the transaction may differ significantly from those reflected in this unaudited pro forma condensed combined financial information presented herein for a number of reasons, including, but not limited to, differences between the assumptions used to prepare this unaudited pro forma condensed combined financial information.

The assumptions and estimates underlying the unaudited adjustments to the pro forma condensed combined financial statements are described in the accompanying notes, which should be read together with the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined financial statements should be read together with our historical financial statements, which are incorporated by reference herein.

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION

AS OF SEPTEMBER 30, 2020
(in thousands)

	CALLIDITAS THERAPEUTICS AB (Historical)		GENKYOTEX S.A. (Historical)				Pro Forma Adjustments		Note 4	Pro Forma Combined
	(in SEK)		(in EUR)		(in SEK)		(in SEK)			(in SEK)
ASSETS
Non-current assets
Intangible assets		16,066		2,801		29,393		386,927	(a)		432,386
Goodwill		—		—		—		47,595	(a)		47,595
Equipment		89		10		105		—			194
Right-of-use assets		4,144		208		2,183		—			6,327
Non-current financial assets		2,111		36		378		—			2,489
Total non-current assets		22,410		3,055		32,059		434,522			488,991
Current assets
Other current assets		4,106		668		7,010		—			11,116
Prepaid expenses		16,798		179		1,878		—			18,676
Cash and cash equivalents		1,396,869		3,590		37,674		(287,568)	(a)		1,146,975
Total current assets		1,417,773		4,437		46,562		(287,568)			1,767,767
TOTAL ASSETS		1,440,183		7,492		78,621		146,954			1,665,758
SHAREHOLDERS’ EQUITY AND LIABILITIES
Share capital		1,998		11,549		121,196		(121,196)	(a)		1,998
Additional paid-in capital		2,126,016		4,747		49,815		(44,576)	(a)		2,131,255
Reserves		(66)		(2,752)		(28,880)		28,880	(a)		(66)
Accumulated other comprehensive loss		—		(647)		(6,790)		6,790	(a)		—
Retained earnings, including net loss for the period		(751,160)		(8,350)		(87,625)		69,248	(a), (e)		(769,537)
Noncontrolling interest		—		—		—		51,171	(a)		51,171
Total equity attributable to shareholders of the Parent Company		1,376,788		4,547		47,716		(9,683)			1,414,821
Non-current liabilities
Employee benefit obligations		—		960		10,074		—			10,074
Acquisition liability		—		—		—		51,200	(a)		51,200
Deferred tax liability		—		—		—		87,060	(a)		87,060
Provisions		1,931		—		—		—			1,931
Other non-current liabilities		1,034		63		661		—			1,695
Total non-current liabilities		2,965		1,023		10,735		138,260			151,960
Current liabilities
Accounts payable		19,872		656		6,884		—			26,756
Current tax liabilities		15		258		2,708		—			2,723
Current financial liabilities		—		146		1,532		—			1,532
Other current liabilities		3,907		54		567		—			4,474
Accrued expenses and deferred revenue		36,636		808		8,479		18,377	(e)		63,492
Total current liabilities		60,430		1,922		20,170		18,377			98,977
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES		1,440,183		7,492		78,621		146,954			1,665,758

The accompanying notes are an integral part of these unaudited pro forma condensed combined
financial statements.

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2020
(in thousands, except share and per share amounts)

	CALLIDITAS THERAPEUTICS AB (Historical)		GENKYOTEX S.A. (Historical)				Pro Forma Adjustments		Note 4	Pro Forma Combined
	(in SEK)		(in EUR)		(in SEK)		(in SEK)			(in SEK)
Net sales		474		—		—		—			474
Operating expenses:
Research and development		(167,379)		(9,271)		(97,978)		65,124	(b)		(200,233)
Administrative and selling		(77,843)		(1,757)		(18,568)		4,162	(c), (d)		(92,249)
Other operating income		969		35		370		—			1,339
Operating loss		(243,779)		(10,993)		(116,176)		69,286			(290,669)
Financial income		504		12		127		—			631
Financial expenses		(19,603)		(101)		(1,067)		—			(20,670)
Change in fair value of derivative instruments		—		64		676		—			676
Loss before income tax		(262,878)		(11,018)		(116,440)		69,286			(310,032)
Income tax expense		(185)		—		—		—	(f)		(185)
Loss for the year attributable to shareholders of the Parent Company and noncontrolling interest		(263,063)		(11,018)		(116,440)		69,286			(310,217)
Whereof:
Loss for the year attributable to noncontrolling interest		—		—		—		(6,660)	(g)		(6,660)
Loss for the year attributable to shareholders of the Parent Company		(263,063)		(11,018)		(116,440)		75,946			(303,557)
Loss per share before and after dilution attributable to Parent Company		(6.09)									(7.03)
Weighted average shares outstanding		43,165,505									43,165,505

The accompanying notes are an integral part of these unaudited pro forma condensed combined
financial statements.

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2019
(in thousands, except share and per share amounts)

	CALLIDITAS THERAPEUTICS AB (Historical)		GENKYOTEX S.A. (Historical)				Pro Forma Adjustments		Note 4	Pro Forma Combined
	(in SEK)		(in EUR)		(in SEK)		(in SEK)			(in SEK)
Net sales		184,829		—		—		—			184,829
Operating expenses:
Research and development		(149,826)		(5,406)		(57,248)		4,276	(b)		(202,798)
Administrative and selling		(62,882)		(2,160)		(22,874)		64	(c)		(85,692)
Other operating income		4,385		142		1,504		—			5,889
Other operating expenses		(4,525)		—		—		—			(4,525)
Operating loss		(28,019)		(7,424)		(78,618)		4,340			(102,297)
Financial income		926		348		3,685		—			4,611
Financial expenses		(5,408)		(190)		(2,012)		—			(7,420)
Change in fair value of derivative instruments		—		64		678		—			678
Loss before income tax		(32,501)		(7,202)		(76,267)		4,340			(104,428)
Income tax expense		(77)		—		—		—	(f)		(77)
Loss for the year attributable to shareholders of the Parent Company and noncontrolling interests		(32,578)		(7,202)		(76,267)		4,340			(104,505)
Whereof:
Loss for the year attributable to noncontrolling interest		—		—		—		(9,926)	(g)		(9,926)
Loss for the year attributable to shareholders of the Parent Company		(32,578)		(7,202)		(76,267)		14,266			(94,579)
Loss per share before and after dilution attributable to Parent Company		(0.88)									(2.56)
Weighted average shares outstanding		36,940,587									36,940,587

The accompanying notes are an integral part of these unaudited pro forma condensed combined
financial statements.

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Notes to the Unaudited Pro Forma Condensed Combined Financial Information

Note 1—Description of Transaction and Basis of Presentation

The unaudited pro forma condensed combined financial information was prepared in accordance with IFRS as issued by IASB and pursuant to the rules and regulations of SEC Regulation S-X, and present the pro forma financial position and results of operations of the combined companies based upon Genkyotex’s and our historical data.

Description of Transaction

On November 3, 2020 and pursuant to the Initial Acquisition, we acquired 62.7% of the share capital in Genkyotex, a biopharmaceutical company specializing in NOX therapies with offices in France and Switzerland. The transaction comprised of the acquisition of 7,236,515 shares of Genkyotex’s outstanding shares at EUR 2.73 per share, or an initial purchase price of EUR of 19.7 million (SEK 207.3 million, converted at the September 30, 2020 exchange rate of 10.494052). On November 26, 2020, we submitted a simplified public mandatory cash offer to the remaining shareholders in Genkyotex. The Tender Offer closed on December 11, 2020 and as a result, we purchased an additional 2,885,161 shares at EUR 2.80 per share (SEK 84.8 million converted at the September 30, 2020 exchange rate) and increased our ownership percentage to 86.2%.

In addition to the fixed purchase price above, the transaction stipulates the following contingent consideration if certain milestones are achieved:

Milestone 1: EUR 30.0 million if Genkyotex is granted the right to commercially manufacture, market and sell setanaxib in the United States by the FDA.

Milestone 2: EUR 15.0 million if Genkyotex is granted the right to commercially manufacture, market and sell setanaxib in the European Union by the European Commission.

Milestone 3: EUR 10.0 million if Genkyotex is, by the FDA or European Commission, granted the right to commercially manufacture, market and sell setanaxib in the United States or European Union for the treatment of IPF or Type 1 Diabetes.

Basis of Presentation

Genkyotex’s and our historical financial statements have been adjusted to give pro forma effect to events that are (i) directly attributable to the acquisition, (ii) factually supportable, and (iii) with respect to the unaudited pro forma condensed combined consolidated statement of operations, expected to have a continuing impact on the combined results.

We have preliminarily concluded that the transaction represents a business combination pursuant to IFRS 3, Business Combinations. We have not yet finalized an external valuation analysis of the fair market value of Genkyotex’s assets acquired and liabilities assumed. Using the estimated total consideration for the transaction, we have estimated the allocations to such assets and liabilities. This preliminary purchase price allocation has been used to prepare pro forma adjustments in the unaudited pro forma condensed combined statement of financial position. The final purchase price allocation will be determined when we have determined the final consideration and completed the detailed valuations and necessary calculations. The final purchase price allocation could differ materially from the preliminary purchase price allocation used to prepare the pro forma adjustments. The final purchase price allocation may include (i) changes in allocations to intangible assets or goodwill based on the results of certain valuations that have yet to be finalized, (ii) changes in the fair value of contingent consideration, and (ii) other changes to assets and liabilities.

Under the acquisition method, acquisition-related transaction costs (e.g., advisory, legal, valuation and other professional fees) are not included as consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. These costs are not presented in the unaudited pro forma condensed combined statement of operations because they will not have a continuing impact on the combined results.

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This unaudited pro forma condensed combined financial information is not intended to reflect the results which would have actually resulted had the acquisition been effected on the dates indicated. Further, the pro forma results of operations are not necessarily indicative of the results of operations that may be obtained in the future.

Note 2—Foreign currency adjustments

The historical financial information of Genkyotex was translated from EUR to SEK using the following historical exchange rates:

	Exchange Rate
Period end exchange rate as of September 30, 2020 (statement of financial position)		10.494052
Average exchange rate for the nine months ended September 30, 2020 (statement of operations)		10.568175
Average exchange rate for the year ended December 31, 2019 (statement of operations)		10.589781

Note 3—Preliminary purchase price allocation

Under the acquisition method of accounting, the total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of Genkyotex based on their estimated fair values as of the Initial Acquisition date, the date we obtained control over Genkyotex. The excess of the acquisition consideration paid and the fair value of noncontrolling interest in Genkyotex over the estimated fair values of net assets acquired will be recorded as goodwill in the combined statement of financial position. The allocation is dependent upon certain valuation and other studies that have not yet been finalized. Accordingly, the pro forma purchase price allocation is subject to further adjustment as additional information becomes available and as additional analyses and final valuations are completed, and such differences could be material.

The Initial Acquisition closed on November 3, 2020, with the completion of the Tender Offer on December 11, 2020. The acquisition of an additional interest of 23.5% in Genkyotex is a transaction with non-controlling interests that does not result in a loss of control. Transactions with equity owners are accounted for as an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized within equity attributable to owners of the parent company.

The following table sets forth a preliminary pro forma allocation of the purchase price to the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed of Genkyotex using Genkyotex’s consolidated statement of financial position as of September 30, 2020, with the excess recorded to goodwill:

(in thousands)	EUR		SEK
Cash and cash equivalents		3,590		37,674
Other current assets		668		7,010
Prepaid expenses		179		1,878
Equipment		10		105
Right of use assets		208		2,183
Other non-current assets		36		378
Intangible assets		2,801		29,393
Acquired identifiable intangible assets (see Note 4)		36,871		386,927
Noncontrolling interest (see Note 4)		(13,022)		(136,658)
Accounts payable		(656)		(6,884)
Accrued expenses		(808)		(8,479)

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(in thousands)	EUR		SEK
Current tax liabilities		(258)		(2,708)
Current financial liabilities		(146)		(1,532)
Other current liabilities		(54)		(567)
Deferred tax liabilities		(8,296)		(87,060)
Employee benefit obligations		(960)		(10,074)
Other non-current liabilities		(63)		(661)
Net assets acquired (a)		20,100		210,925
Estimated consideration transferred (b)		24,635		258,520
Estimated goodwill (b) - (a)		4,535		47,595

We also recorded a liability, or Acquisition Liability, representing the fair value of contingent consideration that we may owe to shareholders of Genkyotex if the milestones outlined in Note 1 are achieved within ten years of the tender offer closing (i.e., December 11, 2030). The total Acquisition Liability is EUR 55 million (SEK 577 million). We have determined that the probability of achieving Milestones 1 to 3 is 15.21%. Based on this probability assessment along with a 10% discount rate utilized to determine the present value, we determined the fair value of the contingent consideration to be EUR 4.9 million (SEK 51.2 million) as of the acquisition date. We will remeasure the Acquisition Liability at fair value each reporting period based on updated facts and circumstances surrounding the probability of the milestones to be achieved.

Goodwill represents the excess of consideration transferred and the fair value of noncontrolling interest in Genkyotex over the fair value of the underlying net assets acquired. Goodwill is not amortized but assessed for impairment annually, or more frequently, if an event occurs or circumstances change. Goodwill is attributable to the assembled workforce of Genkyotex and synergies expected to be achieved from combining our operations with Genkyotex.

The deferred tax liabilities represent the deferred tax impact associated with the differences in book and tax basis, including incremental differences created from the preliminary purchase price allocation and acquired net operating losses. Deferred taxes associated with estimated fair value adjustments reflect an estimated Swiss long-term corporate tax rate. The effective tax rate of the combined company could be significantly different (either higher or lower) depending on post-merger activities, including cash needs, the geographical mix of income, and changes in tax law.

Note 4—Pro forma adjustments

The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:

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(a) Represents the elimination of the historical equity of Genkyotex and the initial allocation of excess purchase price to goodwill:

(in thousands)	EUR		SEK
Total consideration transferred		24,635		258,520(i)
Fair value of noncontrolling interest		13,022		136,658(ii)
Less:
Share capital		11,549		121,196
Additional paid-in capital		4,747		49,815
Accumulated other comprehensive income		(647)		(6,790)
Reserves		(2,752)		(28,880)
Retained earnings, including net loss for the period		(8,350)		(87,625)
Acquired identifiable intangible assets		36,871		386,927
Deferred tax liability		(8,296)		(87,060)
Goodwill–related to the Acquisition		4,535		47,595

(i)

Consideration of SEK 258,520 represents the acquisition of 7.2 million shares at a negotiated share price of EUR 2.73 per share plus the fair value contingent consideration of EUR 4.9 million, converted to SEK at an exchange rate of 10.494052.

(ii)

Fair value of noncontrolling interest was determined as follows:

Noncontrolling interest in connection with Initial Acquisition

(in thousands, except shares and per share amounts)
Remaining outstanding shares					4,312,047
Price per share (EUR)					3.02
Total fair value of noncontrolling interest (EUR)					13,022
Total fair value of noncontrolling interest (SEK)					136,658

Additionally, Genkyotex issued 187,612 shares in connection with the exercise of warrants between November 3, 2020 and December 11, 2020, the proceeds of which were allocated to the noncontrolling interest.

(in thousands, except shares and per share amounts)
Shares exercised					187,612
Exercise price per share (EUR)					2.30
Total cash proceeds (EUR)					432
Total cash proceeds (SEK)					4,528

In connection with the Tender Offer, we retained our controlling financial interest in Genkyotex. As such, the transaction is accounted for as an equity transaction.

Noncontrolling interest in connection with Tender Offer

(in thousands, except shares and per share amounts)
Shares tendered					2,885,161
Price per share (EUR)					2.80
Total cash paid for Tender Offer (EUR)					8,078
Total cash paid for Tender Offer (SEK)					84,776(i)

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(in thousands, except shares and per share amounts)
Fair value of noncontrolling interest from Initial Acquisition (SEK)					136,658
Noncontrolling interest in connection with exercise of warrants (SEK)					4,528
Noncontrolling interest before Tender Offer (SEK)					141,186
Less: adjustment to carrying value of noncontrolling interest in connection with Tender Offer					(90,015)(i)
Carrying value of noncontrolling interest subsequent to Tender Offer (SEK)					51,171

(i)

Adjustment to carrying value was calculated in proportion to the percentage we acquired.

(b) Represents the adjustment of intangible assets acquired to their estimated fair values. As part of the preliminary valuation analysis, we identified an intangible asset relating to technology — NOX 1&4 Platform. The fair value of the technology was determined using the multi-period excess earnings method. The principle behind this method is that the value of an intangible asset is equal to the present value of the incremental after-tax cash flows attributable only to the subject intangible asset after deducting contributory asset charges. The incremental after-tax cash flows attributable to the subject intangible asset are then discounted to their present value. The fair value of the existing SIL Vaxiclase Platform was determined to approximate book value at the date of acquisition.

The following table summarizes the estimated fair values of Genkyotex’s identifiable intangible assets, their estimated useful lives and amortization expense under the straight-line method:

					Amortization Expenses
(Amounts in thousands SEK)	Estimated Fair Value		Estimated Useful Life in Years		Nine Months Ended September 30, 2020		Year Ended December 31, 2019
Technology – NOX 1 & 4 Platform		386,927		15		—		—
Technology – SIL Vaxiclase Platform		29,394		17		1,297		1,729
Historical impairment charges						(61,919)		—
Historical amortization expense						(4,502)		(6,005)
Pro forma adjustments to amortization expense						(65,124)		(4,276)

A pro forma adjustment for amortization expense on the technology — NOX 1 & 4 Platform was not recorded on the unaudited pro forma condensed combined statement of operations as we do not expect to launch the platform until 2026. The identifiable intangible assets are preliminary and are based on management’s estimates after consideration of similar transactions. As discussed above, the amount that will ultimately be allocated to identifiable intangible assets, may differ materially from this preliminary allocation. In addition, the amortization impacts will ultimately be based upon the periods in which the associated economic benefits or detriments are expected to be derived. Therefore, the amount of amortization following the acquisition may differ significantly between periods based upon the final value assigned and amortization methodology used for each identifiable intangible asset.

(c) Represents the adjustment to recognize depreciation expense related to acquired equipment, calculated on a straight-line basis over their remaining estimated useful life of one year.

	Depreciation Expenses
(Amounts in thousands SEK)	Nine Months Ended September 30, 2020		Year Ended December 31, 2019
Estimated depreciation expense		—		(105)
Historical depreciation expense		85		169
Pro forma adjustments to depreciation expense		85		64

(d) Represents the exclusion of 4,077 SEK nonrecurring transaction costs incurred during the nine-month period ended September 30, 2020 that are directly related to the acquisition of Genkyotex.

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(e) Represents the accrual for estimated transaction costs of 18,377 SEK that are directly related to the acquisition of Genkyotex.

(f) Due to our history of net operating losses in the jurisdictions in which we operate, our expected blended tax rate is estimated to be zero.

(g) Represents the adjustment to recognize the portion of the loss that is attributable to Genkyotex’s noncontrolling interest.

	Net loss attributable to noncontrolling interest
(Amounts in thousands SEK)	Nine Months Ended September 30, 2020		Year Ended December 31, 2019
Net loss for Genkyotex		(116,440)		(76,267)
Pro forma adjustments(1)		68,178		4,340
Adjusted net loss for Genkyotex		(48,262)		(71,927)
Noncontrolling interest percentage(2)		13.8%		13.8%
Net loss attributable to noncontrolling interest		(6,660)		(9,926)

(1)

Excludes transaction costs of 1,108 SEK that we incurred during the nine months ended September 30, 2020.

(2)

Represents Genkyotex’s noncontrolling interest percentage subsequent to the warrant exercise and completion of the Tender Offer.

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DESCRIPTION OF AMERICAN DEPOSITARY SHARES

Citibank, N.A. is the depositary bank for the American Depositary Shares. Citibank’s depositary offices are located at 388 Greenwich Street, New York, New York 10013. American Depositary Shares are frequently referred to as “ADSs” and represent ownership interests in securities that are on deposit with the depositary bank. ADSs may be represented by certificates that are commonly known as “American Depositary Receipts” or “ADRs.” The depositary bank typically appoints a custodian to safekeep the securities on deposit. In this case, the custodian is Citibank Europe plc, located at 1 North Wall Quay, Dublin 1, Ireland.

We have appointed Citibank as depositary bank pursuant to a deposit agreement. A copy of the deposit agreement has been filed with the SEC under cover of a registration statement on Form F-6 (File No. 333-238726). You may obtain a copy of the deposit agreement from the SEC’s website (www.sec.gov). Please refer to Registration Number 333-238726 when retrieving such copy.

We are providing you with a summary description of the material terms of the ADSs and of your material rights as an owner of ADSs. Please remember that summaries by their nature lack the precision of the information summarized and that the rights and obligations of an owner of ADSs will be determined by reference to the terms of the deposit agreement and not by this summary. We urge you to review the deposit agreement in its entirety. The portions of this summary description that are italicized describe matters that may be relevant to the ownership of ADSs but that may not be contained in the deposit agreement.

Each ADS represents two common shares, quota value SEK 0.04 per share. As a holder of ADSs, you will not be treated as one of our shareholders and you will not have shareholder rights. You will have the rights of an ADS holder or beneficial owner (as applicable) as provided in the deposit agreement among us, the depositary and holders and beneficial owners of ADSs from time to time.

Each ADS represents the right to receive, and to exercise the beneficial ownership interests in two common shares that are on deposit with the depositary bank and/or custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property received by the depositary bank or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practical considerations. We and the depositary bank may agree to change the ADS-to-share ratio by amending the deposit agreement. This amendment may give rise to, or change, the depositary fees payable by ADS owners. The custodian, the depositary bank and their respective nominees will hold all deposited property for the benefit of the holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the depositary bank, the custodian or their nominees. Beneficial ownership in the deposited property will under the terms of the deposit agreement be vested in the beneficial owners of the ADSs. The depositary bank, the custodian and their respective nominees will be the record holders of the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs. A beneficial owner of ADSs may or may not be the holder of ADSs. Beneficial owners of ADSs will be able to receive, and to exercise beneficial ownership interests in, the deposited property only through the registered holders of the ADSs, the registered holders of the ADSs (on behalf of the applicable ADS owners) only through the depositary bank, and the depositary bank (on behalf of the owners of the corresponding ADSs) directly, or indirectly, through the custodian or their respective nominees, in each case upon the terms of the deposit agreement.

If you become an owner of ADSs, you will become a party to the deposit agreement and therefore will be bound to its terms and to the terms of any ADR that represents your ADSs. The deposit agreement and the ADR specify our rights and obligations as well as your rights and obligations as owner of ADSs and those of the depositary bank. As an ADS holder you appoint the depositary bank to act on your behalf in certain circumstances. The deposit agreement and the ADRs are governed by New York law. However, our obligations to the holders of common shares will continue to be governed by the laws of Sweden, which may be different from the laws in the United States.

In addition, applicable laws and regulations may require you to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. You are solely responsible for complying with such reporting requirements and obtaining such approvals. None of the depositary bank, the custodian, us or any

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of their or our respective agents or affiliates shall be required to take any actions whatsoever on your behalf to satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.

As an owner of ADSs, we will not treat you as one of our shareholders and you will not have direct shareholder rights. The depositary bank will hold on your behalf the shareholder rights attached to the common shares underlying your ADSs. As an owner of ADSs you will be able to exercise the shareholders rights for the common shares represented by your ADSs through the depositary bank only to the extent contemplated in the deposit agreement. To exercise any shareholder rights not contemplated in the deposit agreement you will, as an ADS owner, need to arrange for the cancellation of your ADSs and become a direct shareholder.

The manner in which you own the ADSs (e.g., in a brokerage account vs. as registered holder, or as holder of certificated vs. uncertificated ADSs) may affect your rights and obligations, and the manner in which, and extent to which, the depositary bank’s services are made available to you. As an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, or through an account established by the depositary bank in your name reflecting the registration of uncertificated ADSs directly on the books of the depositary bank, commonly referred to as the direct registration system, or DRS. The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the depositary bank. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the depositary bank to the holders of the ADSs. The direct registration system includes automated transfers between the depositary bank and The Depository Trust Company, or DTC, the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner of ADSs. Please consult with your broker or bank if you have any questions concerning these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have opted to own the ADSs directly by means of an ADS registered in your name and, as such, we will refer to you as the holder. When we refer to you, we assume the reader owns ADSs and will own ADSs at the relevant time.

The registration of the common shares in the name of the depositary bank or the custodian shall, to the maximum extent permitted by applicable law, vest in the depositary bank or the custodian the record ownership in the applicable common shares with the beneficial ownership rights and interests in such common shares being at all times vested with the beneficial owners of the ADSs representing the common shares. The depositary bank or the custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited property, in each case only on behalf of the holders and beneficial owners of the ADSs representing the deposited property.

Dividends and Distributions

As a holder of ADSs, you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such distributions under the terms of the deposit agreement in proportion to the number of ADSs held as of the specified record date, after deduction of the applicable fees, taxes and expenses.

Distributions of Cash

Whenever we make a cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon receipt of confirmation of the deposit of the requisite funds, the depositary bank will arrange for the funds received in a currency other than U.S. dollars to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to the Swedish laws and regulations.

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The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The depositary bank will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.

The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. The depositary bank will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that the depositary bank holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.

Distributions of Shares

Whenever we make a free distribution of common shares for the securities on deposit with the custodian, we will deposit the applicable number of common shares with the custodian. Upon receipt of confirmation of such deposit, the depositary bank will either distribute to holders new ADSs representing the common shares deposited or modify the ADS-to-share ratio, in which case each ADS you hold will represent rights and interests in the additional common shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.

The distribution of new ADSs or the modification of the ADS-to-share ratio upon a distribution of common shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes or governmental charges, the depositary bank may sell all or a portion of the new common shares so distributed.

No such distribution of new ADSs will be made if it would violate a law (e.g., the U.S. securities laws) or if it is not operationally practicable. If the depositary bank does not distribute new ADSs as described above, it may sell the common shares received upon the terms described in the deposit agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.

Distributions of Rights

Whenever we intend to distribute rights to subscribe for additional common shares, we will give prior notice to the depositary bank and we will assist the depositary bank in determining whether it is lawful and reasonably practicable to distribute rights to subscribe for additional ADSs to holders.

The depositary bank will establish procedures to distribute rights to subscribe for additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the deposit agreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The depositary bank is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to subscribe for new common shares other than in the form of ADSs.

The depositary bank will not distribute the rights to you if:

•

we do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or

•

we fail to deliver satisfactory documents to the depositary bank; or

•

it is not reasonably practicable to distribute the rights.

The depositary bank will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the depositary bank is unable to sell the rights, it will allow the rights to lapse.

Elective Distributions

Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior notice thereof to the depositary bank and will indicate whether we wish

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the elective distribution to be made available to you. In such case, we will assist the depositary bank in determining whether such distribution is lawful and reasonably practicable.

The depositary bank will make the election available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated in the deposit agreement. In such case, the depositary bank will establish procedures to enable you to elect to receive either cash or additional ADSs, in each case as described in the deposit agreement.

If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in Sweden would receive upon failing to make an election, as more fully described in the deposit agreement.

Other Distributions

Whenever we intend to distribute property other than cash, common shares or rights to subscribe for additional common shares, we will notify the depositary bank in advance and will indicate whether we wish such distribution to be made to you. If so, we will assist the depositary bank in determining whether such distribution to holders is lawful and reasonably practicable.

If it is reasonably practicable to distribute such property to you and if we provide to the depositary bank all of the documentation contemplated in the deposit agreement, the depositary bank will distribute the property to the holders in a manner it deems practicable.

The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes and governmental charges, the depositary bank may sell all or a portion of the property received.

The depositary bank will not distribute the property to you and will sell the property if:

•

we do not request that the property be distributed to you or if we request that the property not be distributed to you; or

•

we do not deliver satisfactory documents to the depositary bank; or

•

the depositary bank determines that all or a portion of the distribution to you is not reasonably practicable.

The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.

Redemption

Whenever we decide to redeem any of the securities on deposit with the custodian, we will notify the depositary bank in advance. If it is practicable and if we provide all of the documentation contemplated in the deposit agreement, the depositary bank will provide notice of the redemption to the holders.

The custodian will be instructed to surrender the shares being redeemed against payment of the applicable redemption price. The depositary bank will convert into U.S. dollars upon the terms of the deposit agreement the redemption funds received in a currency other than U.S. dollars and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the depositary bank. You may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as the depositary bank may determine.

Changes Affecting Common Shares

The common shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of such common shares or a recapitalization, reorganization, merger, consolidation or sale of assets of the Company.

If any such change were to occur, your ADSs would, to the extent permitted by law and the deposit agreement, represent the right to receive the property received or exchanged in respect of the common

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shares held on deposit. The depositary bank may in such circumstances deliver new ADSs to you, amend the deposit agreement, the ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of your existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the Shares. If the depositary bank may not lawfully distribute such property to you, the depositary bank may sell such property and distribute the net proceeds to you as in the case of a cash distribution.

Transfer, Combination and Split Up of ADRs

As an ADR holder, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you will have to surrender the ADRs to be transferred to the depositary bank and also must:

•

ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;

•

provide such proof of identity and genuineness of signatures as the depositary bank deems appropriate;

•

provide any transfer stamps required by the State of New York or the United States; and

•

pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the deposit agreement, upon the transfer of ADRs.

To have your ADRs either combined or split up, you must surrender the ADRs in question to the depositary bank with your request to have them combined or split up, and you must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the deposit agreement, upon a combination or split up of ADRs.

Withdrawal of Common Shares Upon Cancellation of ADSs

As a holder of ADSs, you will be entitled to present your ADSs to the depositary bank for cancellation and then receive the corresponding number of underlying common shares at the custodian’s offices. Your ability to withdraw the common shares held in respect of the ADSs may be limited by U.S. and Swedish legal considerations applicable at the time of withdrawal. In order to withdraw the common shares represented by your ADSs, you will be required to pay to the depositary bank the fees for cancellation of ADSs and any charges and taxes payable upon the transfer of the common shares. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the deposit agreement.

If you hold ADSs registered in your name, the depositary bank may ask you to provide proof of identity and genuineness of any signature and such other documents as the depositary bank may deem appropriate before it will cancel your ADSs. The withdrawal of the common shares represented by your ADSs may be delayed until the depositary bank receives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind that the depositary bank will only accept ADSs for cancellation that represent a whole number of securities on deposit.

You will have the right to withdraw the securities represented by your ADSs at any time except for:

•

temporary delays that may arise because (i) the transfer books for the common shares or ADSs are closed, or (ii) common shares are immobilized on account of a shareholders’ meeting or a payment of dividends;

•

obligations to pay fees, taxes and similar charges; or

•

restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit.

The deposit agreement may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with mandatory provisions of law.

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Voting Rights

As a holder, you generally have the right under the deposit agreement to instruct the depositary bank to exercise the voting rights for the common shares represented by your ADSs.

At our request, the depositary bank will distribute to you any notice of shareholders’ meeting received from us together with information explaining how to instruct the depositary bank to exercise the voting rights of the securities represented by ADSs. In lieu of distributing such materials, the depositary bank may distribute to holders of ADSs instructions on how to retrieve such materials upon request.

If the depositary bank timely receives valid voting instructions from a holder of ADSs as of the applicable record date(s), it will endeavor to vote the securities (in person or by proxy at a shareholders’ meeting or by mail if the board decides before a shareholders’ meeting to allow postal voting) represented by the holder’s ADSs in accordance with such voting instructions and in accordance with Swedish law (which may include temporary registration of the securities in the name of the applicable beneficial owner or designated nominee). In order to provide valid voting instructions, an ADS holder may be required to provide us and the depositary with such information about, and documents pertaining to, the applicable holders and beneficial owners of the ADSs being voted.

Securities for which no voting instructions have been received will not be voted (except as otherwise contemplated in the deposit agreement). Please note that the ability of the depositary bank to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the depositary bank in a timely manner.

Fees and Charges

As an ADS holder, you will be required to pay the following fees under the terms of the deposit agreement:

	Service			Fees
	• Issuance of ADSs (e.g., an issuance of ADS upon a deposit of common shares, upon a change in the ADS-to-share ratio, or for any other reason), excluding ADS issuances as a result of distributions of common shares			Up to $0.05 per ADS issued
	• Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited property, upon a change in the ADS-to-share ratio, or for any other reason)			Up to $0.05 per ADS cancelled
	• Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements)			Up to $0.05 per ADS held
	• Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs			Up to $0.05 per ADS held
	• Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off)			Up to $0.05 per ADS held
	• ADS Services			Up to $0.05 per ADS held on the applicable record date(s) established by the depositary bank

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	Service			Fees
	• Registration of ADS transfers (e.g., upon a registration of the transfer of registered ownership of ADSs, upon a transfer of ADSs into DTC and vice versa, or for any other reason)			Up to $0.05 per ADS (or fraction thereof) transferred
	• Conversion of ADSs of one series for ADSs of another series (e.g., upon conversion of Partial Entitlement ADSs for Full Entitlement ADSs, or upon conversion of Restricted ADSs (each as defined in the Deposit Agreement) into freely transferable ADSs, and vice versa)			Up to $0.05 per ADS (or fraction thereof) converted

As an ADS holder you will also be responsible to pay certain charges such as:

•

taxes (including applicable interest and penalties) and other governmental charges;

•

the registration fees as may from time to time be in effect for the registration of common shares on the share register and applicable to transfers of common shares to or from the name of the custodian, the depositary bank or any nominees upon the making of deposits and withdrawals, respectively;

•

certain cable, telex and facsimile transmission and delivery expenses;

•

the fees, expenses, spreads, taxes and other charges of the depositary bank and/or service providers (which may be a division, branch or affiliate of the depositary bank) in the conversion of foreign currency;

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the reasonable and customary out-of-pocket expenses incurred by the depositary bank in connection with compliance with exchange control regulations and other regulatory requirements applicable to common shares, ADSs and ADRs; and

•

the fees, charges, costs and expenses incurred by the depositary bank, the custodian, or any nominee in connection with the ADR program.

ADS fees and charges for (i) the issuance of ADSs, and (ii) the cancellation of ADSs are charged to the person for whom the ADSs are issued (in the case of ADS issuances) and to the person for whom ADSs are cancelled (in the case of ADS cancellations). In the case of ADSs issued by the depositary bank into DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions made through DTC, and may be charged to the DTC participant(s) receiving the ADSs being issued or the DTC participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account of the applicable beneficial owner(s) in accordance with the procedures and practices of the DTC participants as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced for the amount of the ADS fees and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC and may be charged to the DTC participants in accordance with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the beneficial owners for whom they hold ADSs. In the case of (i) registration of ADS transfers, the ADS transfer fee will be payable by the ADS Holder whose ADSs are being transferred or by the person to whom the ADSs are transferred, and (ii) conversion of ADSs of one series for ADSs of another series, the ADS conversion fee will be payable by the Holder whose ADSs are converted or by the person to whom the converted ADSs are delivered.

In the event of refusal to pay the depositary bank fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the

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depositary bank fees from any distribution to be made to the ADS holder. Certain depositary fees and charges (such as the ADS services fee) may become payable shortly after the closing of the ADS offering. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary bank. You will receive prior notice of such changes. The depositary bank may reimburse us for certain expenses incurred by us in respect of the ADR program, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary bank agree from time to time.

Amendments and Termination

We may agree with the depositary bank to modify the deposit agreement at any time without your consent. We undertake to give holders 30 days’ prior notice of any modifications that would materially prejudice any of their substantial rights under the deposit agreement. We will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.

You will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit agreement become effective. The deposit agreement cannot be amended to prevent you from withdrawing the common shares represented by your ADSs (except as permitted by law).

We have the right to direct the depositary bank to terminate the deposit agreement. Similarly, the depositary bank may in certain circumstances on its own initiative terminate the deposit agreement. In either case, the depositary bank must give notice to the holders at least 30 days before termination. Until termination, your rights under the deposit agreement will be unaffected.

After termination, the depositary bank will continue to collect distributions received (but will not distribute any such property until you request the cancellation of your ADSs) and may sell the securities held on deposit. After the sale, the depositary bank will hold the proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest bearing account. At that point, the depositary bank will have no further obligations to holders other than to account for the funds then held for the holders of ADSs still outstanding (after deduction of applicable fees, taxes and expenses).

In connection with any termination of the deposit agreement, the depositary bank may make available to owners of ADSs a means to withdraw the common shares represented by ADSs and to direct the depositary of such common shares into an unsponsored American depositary share program established by the depositary bank. The ability to receive unsponsored American depositary shares upon termination of the deposit agreement would be subject to satisfaction of certain U.S. regulatory requirements applicable to the creation of unsponsored American depositary shares and the payment of applicable depositary fees.

Books of Depositary

The depositary bank will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the deposit agreement.

The depositary bank will maintain in New York facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.

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Limitations on Obligations and Liabilities

The deposit agreement limits our obligations and the depositary bank’s obligations to you. Please note the following:

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we and the depositary bank are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad faith;

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the depositary bank disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the deposit agreement;

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the depositary bank disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in common shares, for the validity or worth of the common shares, for any tax consequences that result from the ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the deposit agreement, for the timeliness of any of our notices or for our failure to give notice;

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we and the depositary bank will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement;

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we and the depositary bank disclaim any liability if we or the depositary bank are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement, by reason of any provision, present or future of any law or regulation, or by reason of present or future provision of any provision of our Articles of Incorporation and By-laws or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond our control;

•

we and the depositary bank disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the deposit agreement or in our Articles of Incorporation and By-laws or in any provisions of or governing the securities on deposit;

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we and the depositary bank further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting Shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by either of us in good faith to be competent to give such advice or information;

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we and the depositary bank also disclaim liability for the inability by a holder to benefit from any distribution, offering, right or other benefit that is made available to holders of common shares but is not, under the terms of the deposit agreement, made available to you;

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we and the depositary bank may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties;

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we and the depositary bank also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit agreement;

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no disclaimer of any Securities Act liability is intended by any provision of the deposit agreement;

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nothing in the deposit agreement gives rise to a partnership or joint venture, or establishes a fiduciary relationship, among us, the depositary bank and you as ADS holder; and

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nothing in the deposit agreement precludes Citibank (or its affiliates) from engaging in transactions in which parties adverse to us or the ADS owners have interests, and nothing in the deposit agreement obligates Citibank to disclose those transactions, or any information obtained in the course of those transactions, to us or to the ADS owners, or to account for any payment received as part of those transactions.

As the above limitations relate to our obligations and the depositary’s obligations to you under the deposit agreement, we believe that, as a matter of construction of the clause, such limitations would likely

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to continue to apply to ADS holders who withdraw the common shares from the ADS facility with respect to obligations or liabilities incurred under the deposit agreement before the cancellation of the ADSs and the withdrawal of the common shares, and such limitations would most likely not apply to ADS holders who withdraw the common shares from the ADS facility with respect to obligations or liabilities incurred after the cancellation of the ADSs and the withdrawal of the common shares and not under the deposit agreement.

In any event, you will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary’s compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder. In fact, you cannot waive our or the depositary’s compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder.

Taxes

You will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We, the depositary bank and the custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.

The depositary bank may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable holder. The depositary bank and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the depositary bank and to the custodian proof of taxpayer status and residence and such other information as the depositary bank and the custodian may require to fulfill legal obligations. You are required to indemnify us, the depositary bank and the custodian for any claims with respect to taxes based on any tax benefit obtained for you.

Foreign Currency Conversion

The depositary bank will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute the U.S. dollars in accordance with the terms of the deposit agreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements.

If the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the depositary bank may take the following actions in its discretion:

•

convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the conversion and distribution is lawful and practical;

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distribute the foreign currency to holders for whom the distribution is lawful and practical; or

•

hold the foreign currency (without liability for interest) for the applicable holders.

Governing Law/Waiver of Jury Trial

The deposit agreement, the ADRs and the ADSs will be interpreted in accordance with the laws of the State of New York. The rights of holders of common shares (including common shares represented by ADSs) are governed by the laws of Sweden.

The deposit agreement provides that, to the extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our common shares, the ADSs or the deposit agreement, including any claim under U.S. federal securities laws. If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable in the facts and circumstances of that case in accordance with applicable case law. However, you will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary’s compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder.

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AS A PARTY TO THE DEPOSIT AGREEMENT, YOU IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, YOUR RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THE DEPOSIT AGREEMENT OR THE ADRs AGAINST US AND/OR THE DEPOSITARY BANK.

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DESCRIPTION OF DEBT SECURITIES

The following description, together with the additional information we include in any applicable prospectus supplement or free writing prospectus, summarizes certain general terms and provisions of the debt securities that we may offer under this prospectus. When we offer to sell a particular series of debt securities, we will describe the specific terms of the series in a prospectus supplement. We will also indicate in the supplement to what extent the general terms and provisions described in this prospectus apply to a particular series of debt securities.

We may issue debt securities either separately, or together with, or upon the conversion or exercise of or in exchange for, other securities described in this prospectus. Debt securities may be our senior, senior subordinated or subordinated obligations and, unless otherwise specified in the applicable prospectus supplement, the debt securities will be our direct, unsecured obligations and may be issued in one or more series.

We will issue any senior debt securities under the senior indenture that we will enter into with the trustee named in the senior indenture. We will issue any subordinated debt securities under the subordinated indenture that we will enter into with the trustee named in the subordinated indenture. We have filed forms of these documents as exhibits to the registration statement, of which this prospectus is a part, and supplemental indentures and forms of debt securities containing the terms of the debt securities being offered will be filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by reference from reports that we file with the SEC.

The following summaries of material provisions of the senior debt securities, the subordinated debt securities and the indentures are subject to, and qualified in their entirety by reference to, all of the provisions of the indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplement and any related free writing prospectuses related to the debt securities that we may offer under this prospectus, as well as the complete applicable indenture that contains the terms of the debt securities. Except as we may otherwise indicate, the terms of the forms of senior indenture and the subordinated indenture are identical.

General

Each prospectus supplement will describe the terms relating to the specific series of debt securities being offered. These terms will include some or all of the following:

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the title of debt securities and whether they are subordinated, senior subordinated or senior debt securities;

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any limit on the aggregate principal amount of debt securities of such series;

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the percentage of the principal amount at which the debt securities of any series will be issued;

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the ability to issue additional debt securities of the same series;

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the purchase price for the debt securities and the denominations of the debt securities;

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the specific designation of the series of debt securities being offered;

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the maturity date or dates of the debt securities and the date or dates upon which the debt securities are payable and the rate or rates at which the debt securities of the series shall bear interest, if any, which may be fixed or variable, or the method by which such rate shall be determined;

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the basis for calculating interest if other than 360-day year or twelve 30-day months;

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the date or dates from which any interest will accrue or the method by which such date or dates will be determined;

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the duration of any deferral period, including the maximum consecutive period during which interest payment periods may be extended;

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whether the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference to any index, formula or other method, such as one or

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more currencies, commodities, equity indices or other indices, and the manner of determining the amount of such payments;

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the dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest payable on any interest payment date;

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the place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered to or upon us pursuant to the applicable Indenture;

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the rate or rates of amortization of the debt securities;

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if we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions;

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our obligation or discretion, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and conditions of such obligation;

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the terms and conditions, if any, regarding the option or mandatory conversion or exchange of debt securities;

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the period or periods within which, the price or prices at which and the terms and conditions upon which any debt securities of the series may be redeemed, in whole or in part at our option and, if other than by a board resolution, the manner in which any election by us to redeem the debt securities shall be evidenced;

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any restriction or condition on the transferability of the debt securities of a particular series;

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the portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration of the maturity of the debt securities in connection with any event of default if other than the full principal amount;

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the currency or currencies in which the debt securities will be denominated and in which principal, any premium and any interest will or may be payable or a description of any units based on or relating to a currency or currencies in which the debt securities will be denominated;

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provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events;

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any deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable Indenture;

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any limitation on our ability to incur debt, redeem stock, sell our assets or other restrictions;

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the application, if any, of the terms of the applicable Indenture relating to defeasance and covenant defeasance (which terms are described below) to the debt securities;

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what subordination provisions will apply to the debt securities;

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the terms, if any, upon which the holders may convert or exchange the debt securities into or for our ordinary shares, preferred shares or other securities or property;

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whether we are issuing the debt securities in whole or in part in global form;

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any change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable because of an event of default;

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the depositary for global or certificated debt securities, if any;

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•

any material U.S. federal income tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies;

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any right we may have to satisfy, discharge and defease our obligations under the debt securities, or terminate or eliminate restrictive covenants or events of default in the Indentures, by depositing money or U.S. government obligations with the trustee of the Indentures;

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the names of any trustees, depositories, authenticating or paying agents, transfer agents or registrars or other agents with respect to the debt securities;

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to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable Indenture;

•

if the principal of or any premium or interest on any debt securities is to be payable in one or more currencies or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined);

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the portion of the principal amount of any debt securities which shall be payable upon declaration of acceleration of the maturity of the debt securities pursuant to the applicable Indenture if other than the entire principal amount;

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if the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such debt securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined); and

•

any other specific terms of the debt securities, including any modifications to the events of default under the debt securities and any other terms which may be required by or advisable under applicable laws or regulations.

Unless otherwise specified in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange. Holders of the debt securities may present registered debt securities for exchange or transfer in the manner described in the applicable prospectus supplement. Except as limited by the applicable Indenture, we will provide these services without charge, other than any tax or other governmental charge payable in connection with the exchange or transfer.

Debt securities may bear interest at a fixed rate or a variable rate as specified in the prospectus supplement. In addition, if specified in the prospectus supplement, we may sell debt securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing market rate, or at a discount below their stated principal amount. We will describe in the applicable prospectus supplement any special federal income tax considerations applicable to these discounted debt securities.

We may issue debt securities with the principal amount payable on any principal payment date, or the amount of interest payable on any interest payment date, to be determined by referring to one or more currency exchange rates, commodity prices, equity indices or other factors. Holders of such debt securities may receive a principal amount on any principal payment date, or interest payments on any interest payment date, that are greater or less than the amount of principal or interest otherwise payable on such dates, depending upon the value on such dates of applicable currency, commodity, equity index or other factors. The applicable prospectus supplement will contain information as to how we will determine the amount of principal or interest payable on any date, as well as the currencies, commodities, equity indices or other factors to which the amount payable on that date relates and certain additional tax considerations.

Conversion or Exchange Rights

We will set forth in the applicable prospectus supplement or free writing prospectus the terms on which a series of debt securities may be convertible into or exchangeable for our ordinary shares, our preferred

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shares or other securities (including securities of a third-party). We will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of shares of our ordinary shares, our preferred shares or other securities (including securities of a third-party) that the holders of the series of debt securities receive would be subject to adjustment.

Consolidation, Merger or Sale

Unless we provide otherwise in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, the Indentures will not contain any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor to or acquirer of such assets must assume all of our obligations under the Indentures or the debt securities, as appropriate. If the debt securities are convertible into or exchangeable for other securities of ours or securities of other entities, the person with whom we consolidate or merge or to whom we sell all of our property must make provisions for the conversion of the debt securities into securities that the holders of the debt securities would have received if they had converted the debt securities before the consolidation, merger or sale.

Events of Default Under the Indenture

Unless we provide otherwise in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, the following are events of default under the Indenture with respect to any series of debt securities that we may issue:

•

if we fail to pay interest when due and payable and our failure continues for 90 days and the time for payment has not been extended;

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if we fail to pay the principal, premium or sinking fund payment, if any, when due and payable at maturity, upon redemption or repurchase or otherwise, and the time for payment has not been extended;

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if we fail to observe or perform any other covenant contained in the debt securities or the Indentures, other than a covenant specifically relating to another series of debt securities, and our failure continues for 90 days after we receive notice from the trustee or holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and

•

if specified events of bankruptcy, insolvency or reorganization occur.

We will describe in each applicable prospectus supplement or free writing prospectus any additional events of default relating to the relevant series of debt securities.

If an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid principal, premium, if any, and accrued interest, if any, due and payable immediately. If an event of default specified in the last bullet point above occurs with respect to us, the unpaid principal, premium, if any, and accrued interest, if any, of each issue of debt securities then outstanding shall be due and payable without any notice or other action on the part of the trustee or any holder.

The holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event of default in accordance with the Indenture. Any waiver shall cure the default or event of default.

Subject to the terms of the Indentures, if an event of default under an Indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under such Indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such holders have offered the trustee reasonable indemnity or security satisfactory to it against any loss, liability

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or expense. The holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the debt securities of that series, provided that:

•

the direction so given by the holder is not in conflict with any law or the applicable Indenture; and

•

subject to its duties under the Trust Indenture Act of 1939 (the “Trust Indenture Act”), the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding.

A holder of the debt securities of any series will have the right to institute a proceeding under the Indentures or to appoint a receiver or trustee, or to seek other remedies if:

•

the holder has given written notice to the trustee of a continuing event of default with respect to that series;

•

the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request, and such holders have offered reasonable indemnity to the trustee or security satisfactory to it against any loss, liability or expense or to be incurred in compliance with instituting the proceeding as trustee; and

•

the trustee does not institute the proceeding and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting directions within 90 days after the notice, request and offer.

These limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities, or other defaults that may be specified in the applicable prospectus supplement or free writing prospectus.

We will periodically file statements with the trustee regarding our compliance with specified covenants in the Indentures.

Modification of Indenture; Waiver

Subject to the terms of the Indenture for any series of debt securities that we may issue, we and the trustee may change an Indenture without the consent of any holders with respect to the following specific matters:

•

to fix any ambiguity, defect or inconsistency in the Indenture;

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to comply with the provisions described above under “Consolidation, Merger or Sale;”

•

to comply with any requirements of the SEC in connection with the qualification of any Indenture under the Trust Indenture Act;

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to add to, delete from or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication and delivery of debt securities, as set forth in the Indenture;

•

to provide for the issuance of and establish the form and terms and conditions of the debt securities of any series as provided under “Description of Debt Securities — General,” to establish the form of any certifications required to be furnished pursuant to the terms of the Indenture or any series of debt securities, or to add to the rights of the holders of any series of debt securities;

•

to evidence and provide for the acceptance of appointment hereunder by a successor trustee;

•

to provide for uncertificated debt securities and to make all appropriate changes for such purpose

•

to add to our covenants such new covenants, restrictions, conditions or provisions for the benefit of the holders, to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred to us in the Indenture; or

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•

to change anything that does not materially adversely affect the interests of any holder of debt securities of any series.

In addition, under the Indenture, the rights of holders of a series of debt securities may be changed by us and the trustee with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each series that is affected. However, subject to the terms of the Indenture for any series of debt securities that we may issue or as otherwise provided in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, we and the trustee may make the following changes only with the consent of each holder of any outstanding debt securities affected:

•

extend the stated maturity of the series of debt securities;

•

reduce the principal amount, reduce the rate of or extending the time of payment of interest, or reduce any premium payable upon the redemption or repurchase of any debt securities; or

•

reduce the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver.

Discharge

Each Indenture will provide that, subject to the terms of the Indenture and any limitation otherwise provided in the prospectus supplement or free writing prospectus applicable to a particular series of debt securities, we can elect to be discharged from our obligations with respect to one or more series of debt securities, except for specified obligations, including obligations to:

•

replace stolen, lost or mutilated debt securities of the series;

•

maintain paying agencies;

•

hold monies for payment in trust;

•

recover excess money held by the trustee;

•

compensate and indemnify the trustee; and

•

appoint any successor trustee.

In order to exercise our rights to be discharged, we must deposit with the trustee money or government obligations sufficient to pay all the principal of, any premium and interest on, the debt securities of the series on the dates payments are due.

Form, Exchange and Transfer

We will issue the debt securities of each series only in fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement or free writing prospectus, in denominations of $1,000 and any integral multiple thereof. The Indentures provide that we may issue debt securities of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company or another depository named by us and identified in a prospectus supplement or free writing prospectus with respect to that series.

At the option of the holder, subject to the terms of the Indentures and the limitations applicable to global securities described in the applicable prospectus supplement or free writing prospectus, the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.

Subject to the terms of the Indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement or free writing prospectus, holders of the debt securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt

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securities that the holder presents for transfer or exchange, we will make no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.

We will name in the applicable prospectus supplement or free writing prospectus the security registrar, and any transfer agent in addition to the security registrar that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the debt securities of each series. If we elect to redeem the debt securities of any series, we will not be required to:

•

issue, register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing; or

•

register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part.

Information Concerning the Trustee

The trustee, other than during the occurrence and continuance of an event of default under an Indenture, undertakes to perform only those duties as are specifically set forth in the applicable Indenture. Upon an event of default under an Indenture, the trustee must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs.

Subject to this provision, the trustee is under no obligation to exercise any of the powers given it by the Indentures at the request of any holder of debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur.

Payment and Paying Agents

Unless we otherwise indicate in the applicable prospectus supplement or free writing prospectus, we will make payment of the interest on any debt securities on any interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.

We will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated by us, except that unless we otherwise indicate in the applicable prospectus supplement or free writing prospectus, we will make interest payments by check that we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in the applicable prospectus supplement or free writing prospectus, we will designate the corporate trust office of the trustee as our sole paying agent for payments with respect to debt securities of each series. We will name in the applicable prospectus supplement or free writing prospectus any other paying agents that we initially designate for the debt securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.

All money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities that remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.

Governing Law

The Indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York, except to the extent that the Trust Indenture Act is applicable.

Ranking of Debt Securities

The subordinated debt securities will be subordinate and junior in priority of payment to certain of our other indebtedness to the extent described in a prospectus supplement or free writing prospectus. The

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subordinated Indenture will not limit the amount of subordinated debt securities that we may issue. It also will not limit us from issuing any other secured or unsecured debt.

The senior debt securities will rank equally in right of payment to all our other senior unsecured debt. The senior Indenture does not limit the amount of senior debt securities that we may issue. It also does not limit us from issuing any other secured or unsecured debt.

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DESCRIPTION OF WARRANTS

We may issue and offer warrants under the material terms and conditions described in this prospectus and any accompanying prospectus supplement. The accompanying prospectus supplement may add, update or change the terms and conditions of the warrants as described in this prospectus.

We may issue warrants to purchase our common shares represented by ADSs. Warrants may be issued independently or together with any securities and may be attached to or separate from those securities. The warrants may be issued under warrant or subscription agreements to be entered into between us and a bank or trust company, as warrant agent, all of which will be described in the prospectus supplement relating to the warrants we are offering. The warrant agent will act solely as our agent in connection with the warrants and will not have any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.

The particular terms of the warrants, the warrant or subscription agreements relating to the warrants and the warrant certificates representing the warrants will be described in the applicable prospectus supplement, including, as applicable:

•

the title of the warrants;

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the initial offering price;

•

the aggregate amount of warrants and the aggregate amount of equity securities purchasable upon exercise of the warrants;

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the currency or currency units in which the offering price, if any, and the exercise price are payable;

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if applicable, the designation and terms of the equity securities with which the warrants are issued, and the amount of warrants issued with each equity security;

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the date, if any, on and after which the warrants and the related equity security will be separately transferable;

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if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;

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the date on which the right to exercise the warrants will commence and the date on which the right will expire;

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if applicable, a discussion of United States or Swedish federal income tax, accounting or other considerations applicable to the warrants;

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anti-dilution provisions of the warrants, if any;

•

redemption or call provisions, if any, applicable to the warrants; and

•

any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.

Holders of warrants will not be entitled, solely by virtue of being holders, to vote, to consent, to receive dividends, to receive notice as shareholders with respect to any meeting of shareholders for the election of directors or any other matters, or to exercise any rights whatsoever as a holder of the equity securities purchasable upon exercise of the warrants.

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DESCRIPTION OF UNITS

We may issue units comprised of one or more of the other securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.

The applicable prospectus supplement will describe:

•

the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;

•

any unit agreement under which the units will be issued;

•

any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and

•

whether the units will be issued in fully registered or global form.

The applicable prospectus supplement will describe the terms of any units. The preceding description and any description of units in the applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable, collateral arrangements and depositary arrangements relating to such units.

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TAXATION

The material U.S. federal income tax consequences relating to the purchase, ownership and disposition of any of the securities offered by this prospectus will be set forth in the prospectus supplement offering those securities.

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PLAN OF DISTRIBUTION

We may sell the securities offered under this prospectus in one or more of the following ways (or in any combination) from time to time:

•

to or through one or more underwriters or dealers;

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in short or long transactions;

•

directly to investors; or

•

through agents.

If underwriters or dealers are used in the sale, the securities will be acquired by the underwriters or dealers for their own account and may be resold from time to time in one or more transactions, including:

•

in privately negotiated transactions;

•

in one or more transactions at a fixed price or prices, which may be changed from time to time;

•

in “at the market offerings,” within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an existing trading market, on an exchange or otherwise;

•

at prices related to those prevailing market prices; or

•

at negotiated prices.

As applicable, we and our respective underwriters, dealers or agents, reserve the right to accept or reject all or part of any proposed purchase of the securities. We will set forth in a prospectus supplement the terms and offering of securities by us, including:

•

the names of any underwriters, dealers or agents;

•

any agency fees or underwriting discounts or commissions and other items constituting agents’ or underwriters’ compensation;

•

any discounts or concessions allowed or reallowed or paid to dealers;

•

details regarding over-allotment options under which underwriters may purchase additional securities from us, if any;

•

the purchase price of the securities being offered and the proceeds we will receive from the sale;

•

the public offering price; and

•

the securities exchanges on which such securities may be listed, if any.

We may enter into derivative transactions with third parties or sell securities not covered by this prospectus to third parties in privately negotiated transactions from time to time. If the applicable prospectus supplement indicates, in connection with those derivative transactions, such third parties (or affiliates of such third parties) may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, such third parties (or affiliates of such third parties) may use securities pledged by us, or borrowed from us, or others to settle those sales or to close out any related open borrowings of securities and may use securities received from us in settlement of those derivative transactions to close out any related open borrowings of securities. The third parties (or affiliates of such third parties) in such sale transactions by us will be underwriters and will be identified in an applicable prospectus supplement (or a post-effective amendment).

We may loan or pledge securities to a financial institution or other third party that in turn may sell the securities using this prospectus and an applicable prospectus supplement. Such financial institution or third party may transfer its economic short position to investors in the securities or in connection with a simultaneous offering of other securities offered by this prospectus.

Underwriters, Agents and Dealers

If underwriters are used in the sale of the securities, the securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions described above.

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The securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by underwriters. Generally, the underwriters’ obligations to purchase the securities will be subject to conditions precedent and the underwriters will be obligated to purchase all of the securities if they purchase any of the securities. We may use underwriters with which we have a material relationship and will describe in the prospectus supplement, naming the underwriter and the nature of any such relationship.

We may sell the securities through agents from time to time. When we sell securities through agents, the prospectus supplement will name any agent involved in the offer or sale of securities and any commissions we pay to them. Generally, any agent will be acting on a best effort basis for the period of its appointment.

We may authorize underwriters, dealers or agents to solicit offers by certain purchasers to purchase the securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth any commissions we pay for solicitation of these contracts.

Underwriters, dealers and agents may contract for or otherwise be entitled to indemnification by us against certain civil liabilities, including liabilities under the Securities Act or to contribution with respect to payments made by the underwriters, dealers or agents, under agreements between us and the underwriters, dealers and agents.

We may grant underwriters who participate in the distribution of the securities an option to purchase additional securities to cover over-allotments, if any, in connection with the distribution.

Underwriters, dealers or agents may receive compensation in the form of discounts, concessions or commissions from us or our purchasers, as their agents in connection with the sale of the securities. These underwriters, dealers or agents may be considered to be underwriters under the Securities Act. As a result, discounts, commissions or profits on resale received by the underwriters, dealers or agents may be treated as underwriting discounts and commissions. The prospectus supplement for any securities offered by us will identify any such underwriter, dealer or agent and describe any compensation received by them from us. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.

Any underwriter may engage in over-allotment transactions, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short-covering transactions involve purchases of our securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time. We make no representation or prediction as to the direction or magnitude of any effect these transactions may have on the price of our securities. For a description of these activities, see the information under the heading “Underwriting” in the applicable prospectus supplement.

Underwriters, broker-dealers or agents who may become involved in the sale of the securities may engage in transactions with and perform other services for us for which they receive compensation.

Stabilization Activities

In connection with an offering through underwriters, an underwriter may, to the extent permitted by applicable rules and regulations, purchase and sell securities in the open market. These transactions, to the extent permitted by applicable rules and regulations, may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of securities than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional securities from us in the offering, if any. If the underwriters have an over-allotment option to purchase additional securities

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from us, the underwriters may consider, among other things, the price of securities available for purchase in the open market as compared to the price at which they may purchase securities through the over-allotment option. “Naked” short sales, which may be prohibited or restricted by applicable rules and regulations, are any sales in excess of such option or where the underwriters do not have an over-allotment option. The underwriters must close out any naked short position by purchasing securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the securities in the open market after pricing that could adversely affect investors who purchase in the offering.

Accordingly, to cover these short sales positions or to otherwise stabilize or maintain the price of the securities, the underwriters may bid for or purchase securities in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate members or other broker-dealers participating in the offering are reclaimed if securities previously distributed in the offering are repurchased, whether in connection with stabilization transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of the securities to the extent that it discourages resale of the securities. The magnitude or effect of any stabilization or other transactions is uncertain.

Direct Sales

We may also sell securities directly to one or more purchasers without using underwriters or agents. In this case, no agents, underwriters or dealers would be involved. We may sell securities upon the exercise of rights that we may issue to our shareholders. We may also sell securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities.

Trading Market

It is possible that one or more underwriters may make a market in a class or series of securities, but the underwriters will not be obligated to do so and may discontinue any market making at any time without notice. We cannot give any assurance as to the liquidity of the trading market for any of the securities.

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LEGAL MATTERS

The validity of the common shares and certain matters governed by Swedish law will be passed on for us by Advokatfirman Vinge, Stockholm, Sweden, our Swedish counsel. The validity of certain of the offered securities, and certain matters governed by U.S. federal and New York state law will be passed on for us by Goodwin Procter LLP, New York, NY, our U.S. counsel. If the securities are distributed in an underwritten offering, certain legal matters will be passed upon for the underwriters by counsel identified in the applicable prospectus supplement.

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EXPERTS

The consolidated financial statements of Calliditas Therapeutics AB and its subsidiaries appearing in our Annual Report on Form 20-F for the year ended December 31, 2020 have been audited by Ernst & Young AB, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The registered business address of Ernst & Young AB is Box 7850, 103 99, Stockholm, Sweden.

The consolidated financial statements of Genkyotex S.A. and its subsidiary as of September 30, 2020 and December 31, 2019, and for the nine months ended September 30, 2020 and the year ended December 31, 2019, included herein and in the registration statement have been included in reliance upon the report of KPMG S.A., independent auditors, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. KPMG S.A.’s report expresses a qualified opinion and includes a Basis for Qualified Opinion paragraph stating that as disclosed in Note 2.1 to the consolidated financial statements, the consolidated financial statements have been prepared to meet the reporting requirements of Rule 3-05 of Regulation S-X for purposes of a filing with the U.S. Securities and Exchange Commission and do not include comparative financial information as required by IAS 1 “Presentation of Financial Statements”.

The registered business address of KPMG S.A. is 51 Rue de Saint-Cyr, CS 60409, 69338 Lyon Cedex 9, France.

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ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated and currently existing under the laws of Sweden. In addition, certain of our directors and officers reside outside of the United States and substantially all of the assets of our subsidiaries are located outside of the United States. As a result, it may be difficult for investors to effect service of process on us or those persons in the United States or to enforce in the United States judgments obtained in U.S. courts against us or those persons based on the civil liability or other provisions of the U.S. securities laws or other laws. In addition, uncertainty exists as to whether the courts of Sweden would:

•

recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liabilities provisions of the securities laws of the United States or any state in the United States; or

•

entertain original actions brought in Sweden against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

The United States and Sweden currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in Sweden. In order to obtain a judgment which is enforceable in Sweden, the party in whose favor a final and conclusive judgment of the U.S. court has been rendered will be required to file its claim with a court of competent jurisdiction in Sweden. Such party may submit to the Swedish court the final judgment rendered by the U.S. court. This court will have discretion to attach such weight to the judgment rendered by the relevant U.S. court depending on the circumstances. Circumstances that may be relevant to the Swedish court in deciding to give conclusive effect to a final and enforceable judgment of such court in respect of the contractual obligations thereunder without re-examination or re-litigation of the substantive matters adjudicated upon include whether: (i) the court involved accepted jurisdiction on the basis of internationally recognized grounds to accept jurisdiction, (ii) the proceedings before such court are in compliance with principles of proper procedure, (iii) such judgment is not contrary to the public policy of Sweden and (iv) such judgment is not incompatible with a judgment given between the same parties by a Swedish court or with a prior judgment given between the same parties by a foreign court in a dispute concerning the same subject matter and based on the same cause of action, provided such prior judgment fulfills the conditions necessary for it to be given binding effect in Sweden. Swedish courts may deny the recognition and enforcement of punitive damages or other awards. Moreover, a Swedish court may reduce the amount of damages granted by a U.S. court and recognize damages only to the extent that they are necessary to compensate actual losses or damages.

Swedish civil procedure differs substantially from U.S. civil procedure in a number of respects. Insofar as the production of evidence is concerned, U.S. law and the laws of several other jurisdictions based on common law provide for pre-trial discovery, a process by which parties to the proceedings may prior to trial compel the production of documents by adverse or third parties and the deposition of witnesses. Evidence obtained in this manner may be decisive in the outcome of any proceeding. No such pre-trial discovery process exists under Swedish law.

Subject to the foregoing and service of process in accordance with applicable treaties, investors may be able to enforce in Sweden judgments in civil and commercial matters obtained from U.S. federal or state courts. However, no assurance can be given that those judgments will be enforceable. In addition, it is doubtful whether a Swedish court would accept jurisdiction and impose civil liability in an original action commenced in Sweden and predicated solely upon U.S. federal securities laws.

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form F-3 under the Securities Act covering the offered securities. This prospectus, which constitutes a part of the registration statement, summarizes material provisions of contracts and other documents that we refer to in the prospectus.

This prospectus, which forms a part of the registration statement, does not contain all of the information included in the registration statement and the exhibits and schedules to the registration statement. Certain information is omitted, and you should refer to the registration statement and its exhibits and schedules for that information. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.

The SEC maintains an Internet website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers, like us, that file electronically with the SEC. We maintain a corporate website at www.calliditas.com. Information contained in, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

We are subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. Those reports may be inspected without charge at the locations described above. As a foreign private issuer, we will be exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

As a foreign private issuer, we are also exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. We are, however, still subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5. Since many of the disclosure obligations required of us as a foreign private issuer are different than those required of U.S. domestic reporting companies, our shareholders, potential shareholders and the investing public in general should not expect to receive information about us in the same amount, or at the same time, as information is received from, or provided by, other U.S. domestic reporting companies. We are only liable for violations of the rules and regulations of the SEC that apply to us as a foreign private issuer.

We will send the depositary a copy of all notices of shareholders meetings and other reports, communications and information that are made generally available to shareholders. The depositary has agreed to mail to all holders of ADSs a notice containing the information (or a summary of the information) contained in any notice of a meeting of our shareholders received by the depositary and will make available to all holders of ADSs such notices and all such other reports and communications received by the depositary.

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INCORPORATION BY REFERENCE

We are allowed to incorporate by reference the information we file with the SEC, which means that we can disclose important information to you by referring to those documents. The information incorporated by reference is considered to be part of this prospectus. We incorporate by reference in this prospectus the documents listed below, and any future Annual Reports on Form 20-F or Reports on Form 6-K (to that extent that such Form 6-K indicates that it is intended to be incorporated by reference herein) filed with the SEC pursuant to the Exchange Act prior to the termination of the offering. The documents we incorporate by reference are:

•

Our annual report on Form 20-F for the year ended December 31, 2020 as filed with the SEC on April 27, 2021.

•

Our Form 6-Ks filed with the SEC on January 19, 2021, January 20, 2021, January 21, 2021, January 28, 2021, February 18, 2021, March 15, 2021, April 23, 2021, April 26, 2021, April 27, 2021, April 28, 2021, May 18, 2021, May 27, 2021 and May 28, 2021;

•

The description of the ADSs and common shares contained in our Form 8-A filed with the SEC on June 2, 2020, including any amendment or report filed for the purpose of updating such description.

As you read the above documents, you may find inconsistencies in information from one document to another. If you find inconsistencies between the documents and this prospectus, you should rely on the statements made in the most recent document. All information appearing in this prospectus is qualified in its entirety by the information and financial statements, including the notes thereto, contained in the documents incorporated by reference herein.

We will provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of these filings, at no cost, upon written or oral request to us at the following address:

Calliditas Therapeutics AB
Kungsbron 1, C8
SE-111 22
Stockholm, Sweden Tel: + 46 (0) 8 411 3005
Attention: Investor Relations

You should rely only on the information contained or incorporated by reference in this prospectus or a prospectus supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, or such earlier date that is indicated in this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

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INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

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EXPENSES

The following is a statement of expenses in connection with the distribution of the securities registered. All amounts shown are estimates except the SEC registration fee.

	SEC registration fee					(1)
	FINRA filing fees					(2)
	Nasdaq listing fees					(2)
	Legal fees and expenses					(2)
	Accounting fees and expenses					(2)
	Printing expenses					(2)
	Miscellaneous expenses					(2)
	Total					(2)

(1)

Pursuant to Rules 456(b) and 457(r) under the Securities Act of 1933, as amended, the SEC registration fee will be paid at the time of any particular offering of securities under the registration statement and is therefore not currently determinable.

(2)

These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.

The expenses listed above do not include expenses of preparing prospectus supplements and other expenses relating to offerings of particular securities.

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GENKYOTEX S.A.

Index

	Consolidated Financial Statements as of December 31, 2019 and September 30, 2020 and for the twelve-month period ended December 31, 2019 and the nine-month period ended September 30, 2020
	Independent Auditors’ Report					F-2
	Consolidated Statements of Financial Position as of December 31, 2019 and September 30, 2020					F-4
	Consolidated Income Statements for the twelve-month period ended December 31, 2019 and the nine-month period ended September 30, 2020					F-5
	Consolidated Statements of Comprehensive Income (Loss) for the twelve-month period ended December 31, 2019 and the nine-month period ended September 30, 2020					F-6
	Statements of Changes in Consolidated Shareholders’ Equity for the twelve-month period ended December 31, 2019 and the nine-month period ended September 30, 2020					F-7
	Consolidated Statements of Cash Flows for the twelve-month period ended December 31, 2019 and the nine-month period ended September 30, 2020					F-8
	Notes to the Consolidated Financial Statements					F-9

F-1

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Independent Auditors’ Report

The Board of Directors
Genkyotex S.A.

We have audited the accompanying consolidated financial statements of Genkyotex S.A. and its subsidiary, which comprise the consolidated statements of financial position as of September 30, 2020, and December 31, 2019, and the related consolidated income statements, consolidated statements of comprehensive income (loss) , statements of changes in consolidated shareholders’ equity, and consolidated statements of cash flows for the nine month period ended September 30, 2020 and the year ended December 31, 2019, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”); this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

As disclosed in Note 2.1 to the consolidated financial statements, the consolidated financial statements have been prepared to meet the reporting requirements of Rule 3-05 of Regulation S-X for purposes of a filing with the U.S. Securities and Exchange Commission and do not include comparative financial information as required by IAS 1 “Presentation of Financial Statements”.

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Qualified Opinion

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Genkyotex S.A. and its subsidiary as of September 30, 2020, and December 31, 2019, and the results of their operations and their cash flows for the nine month period ended September 30, 2020 and the year ended December 31, 2019 in accordance with International Financial Reporting standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Lyon, France
January 25, 2021

KPMG Audit
Division of KPMG S.A.

	Stéphane Devin			Bertrand Roussel
	Partner			Partner

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

			AS OF
(amounts in thousands of euros)	NOTES		DECEMBER 31, 2019		SEPTEMBER 30, 2020
ASSETS
Intangible assets		3		9,086		2,801
Property, plant and equipment		4		154		218
Non-current financial assets		5		29		36
Total non-current assets				9,270		3,055
Other current assets		6		1,349		668
Prepaid expenses		6		151		179
Cash and cash equivalents		7		2,417		3,590
Total current assets				3,917		4,437
TOTAL ASSETS				13,186		7,492
SHAREHOLDER’S EQUITY AND LIABILITIES
Shareholders’ equity
Share capital		8		8,683		11,549
Additional paid-in capital				126,118		4,747
Foreign currency transaction adjustment				(2,732)		(2,752)
Accumulated other comprehensive loss				(697)		(647)
Accumulated deficit–attributable to shareholders of Genkyotex				(114,332)		2,669
Net loss–attributable to shareholders of Genkyotex				(7,203)		(11,017)
Shareholders’ equity–attributable to shareholders of Genkyotex				9,836		4,548
Non-controlling interests				—		—
Total shareholders’ equity				9,836		4,548
Liabilities
Employee benefit obligations		11		1,348		960
Non-current financial liabilities		10		17		63
Total non-current liabilities				1,364		1,023
Current financial liabilities		10		848		146
Derivative liabilities		10		64		—
Provisions		12		—		258
Accounts payables				562		656
Tax and social liabilities		12		469		808
Other creditors and miscellaneous liabilities				43		54
Total current liabilities				1,986		1,922
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES				13,186		7,492

The accompanying Notes form an integral part of these consolidated financial statements

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CONSOLIDATED INCOME STATEMENTS

(amounts in thousands of euros, except share and per share data)	NOTES	December 31, 2019 12 months		September 30, 2020 9 months
Research and development expenses, net
Research and development expenses	16.1		(6,305)		(9,627)
Research tax credit	16.1		899		356
General and administrative expenses	16.2		(2,160)		(1,757)
Other operating income			142		35
Operating loss			(7,425)		(10,993)
Financial expenses	18		(190)		(101)
Financial income	18		348		12
Change in fair value of derivative instruments	18		64		64
Net financial expense			222		(25)
Loss before taxes			(7,203)		(11,017)
Income taxes benefit			—		—
Net loss for the period			(7,203)		(11,017)
Attributable to shareholders of Genkyotex			(7,203)		(11,017)
Non-controlling interests			—		—
Basic and diluted weighted average number of shares outstanding			8,146,178		11,160,072
Basic loss per share (€/share)	20		(0.88)		(0.99)
Diluted loss per share (€/share)	20		(0.88)		(0.99)

The accompanying Notes form an integral part of these consolidated financial statements

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(amounts in thousands of euros)	December 31, 2019 12 months		September 30, 2020 9 months
Net loss for the period		(7,203)		(11,017)
Items that will not be reclassified to profit or loss
Remeasurements of the defined benefit liability (asset)		(183)		50
Items that will be reclassified to profit or loss
Foreign currency translation adjustment		(370)		(20)
Other comprehensive income (loss)		(554)		30
Total comprehensive loss		(7,757)		(10,987)
Attributable to shareholders of Genkyotex		(7,757)		(10,987)
Non-controlling interests		—		—

The accompanying Notes form an integral part of these consolidated financial statements

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STATEMENTS OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

(amounts in thousands of euros, except share data)	Notes		Share capital– number of shares		Share capital		Additional paid-in capital		Accumulated deficit and net loss		Treasury Shares		Foreign currency translation adjustment		Other comprehensive loss		Shareholders’ equity– Attributable to shareholders of Genkyotex		Non- controlling interests		Shareholders’ equity
As of January 1, 2019				79,347,621		7,935		124,183		(114,649)		(152)		(2,361)		(514)		14,442		—		14,442
Net loss for the twelve-month period						—		—		(7,203)		—		—		—		(7,203)		—		(7,203)
Other comprehensive income (loss)						—		—		—		—		(370)		(183)		(554)		—		(554)
Total comprehensive income (loss)						—		—		(7,203)		—		(370)		(183)		(7,757)		—		(7,757)
Conversion of convertible bonds				748,687		749		1,961		—		—		—		—		2,710		—		2,710
Effect of reverse stock split by 10(2)				(71,412,859)		—		—		—		—		—		—		—		—		—
Costs incurred in relation to equity transactions(1)						—		(27)		—		—		—		—		(27)		—		(27)
Treasury shares movements, net						—		—		—		107		—		—		107		—		107
Gains and losses, net related to treasury shares						—		—		(122)		—		—		—		(122)		—		(122)
Equity settled share-based payments		9				—		—		483		—		—		—		483		—		483
As of December 31, 2019				8,683,449		8,683		126,118		(121,491)		(45)		(2,732)		(697)		9,836		—		9,836
Net loss for the nine-month period						—		—		(11,017)		—		—		—		(11,017)		—		(11,017)
Other comprehensive income (loss)						—		—		—		—		(20)		50		30		—		30
Total comprehensive income (loss)						—		—		(11,017)		—		(20)		50		(10,987)		—		(10,987)
Conversion of convertible bonds		8		417,816		418		382		—		—		—		—		800		—		800
Capital increase		8		2,447,297		2,447		2,496		—		—		—		—		4,944		—		4,944
Costs incurred in relation to equity transactions(1)						—		(323)		—		—		—		—		(323)		—		(323)
Allocation of premiums to retained earnings						—		(123,926)		123,926		—		—		—		—		—		—
Treasury shares movements, net						—		—		—		(1)		—		—		(1)		—		(1)
Gains and losses, net related to treasury shares						—		—		8		—		—		—		8		—		8
Equity settled share-based payments		9				—		—		271		—		—		—		271		—		271
As of September 30, 2020				11,548,562		11,549		4,747		(8,303)		(46)		(2,752)		(647)		4,548		—		4,548

(1)

Costs directly attributable to the issuance of shares in connection with a capital increase with maintenance of the preferential subscription rights are recognized as a reduction from shareholders’ equity.

(2)

Refer to note 8

The accompanying Notes form an integral part of these consolidated financial statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands of euros)	NOTES	December 31, 2019 12 months		September 30, 2020 9 months
Cash flows from operating activities
Net loss for the period			(7,203)		(11,017)
Adjustments to reconcile net loss to cash flows used in operating activities
Amortization of intangible assets	3		(567)		(427)
Depreciation of property, plant and equipment	4		(147)		(109)
Impairment on the SIIL contract	3, 17				(5,859)
Unrealized foreign exchange gains or losses			325		4
Provisions for pension commitments	11		(123)		349
Provisions	12		—		(258)
Costs related to share-based payments	9		(483)		(271)
Variation of the fair value of derivative			—		64
Fair value of bond loans	10		—		(75)
Interest expenses			(6)		(3)
Operating cash flows before change in working capital requirements			(6,201)		(4,433)
Change in working capital requirements (net of depreciation of trade receivables and inventories)			(1,386)		1,098
Decrease (increase) in other current assets			673		682
Decrease (increase) in prepaid expenses			(17)		(28)
(Decrease) increase in Accounts payables			(1,652)		94
(Decrease) increase in social security liabilities			(358)		446
(Decrease) increase in tax liabilities			(16)		(107)
(Decrease) increase in other creditors and miscellaneous liabilities			(17)		11
Cash flows used in operating activities			(7,588)		(3,335)
Cash flows used in investing activities
Acquisition of intangible and tangible assets	3, 4		(1)		(2)
Cash flows used in investing activities			(1)		(2)
Cash flows from financing activities
Capital increase			—		4,944
Reduction of financial debt relating to the right of use (IFRS 16)	10.3		(130)		(102)
Financial interest paid			(5)		(3)
Repayment of conditional advances	10.1		(118)		—
Costs paid in relation to equity transactions			(27)		(323)
Cash flows (used in) from financing activities			(281)		4,516
Net effect of exchange rate changes on cash and cash equivalents			(11)		(5)
Decrease in cash and cash equivalents			(7,881)		1,173
Cash and cash equivalents at the beginning of the period	7		10,297		2,416
Cash and cash equivalents at the end of the period	7		2,416		3,590

The accompanying Notes form an integral part of these consolidated financial statements

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 1: General information about the Company

1.1 Information about the Company and its activity

Founded in October 2001, Genkyotex is a French company (société anonyme) with the following corporate purpose in France and abroad: research, study, development, manufacturing and distribution of medicines and drug and health products in the field of human and animal health.

The Company’s therapeutic approach is primarily based on the selective inhibition of NOX enzymes which amplify many pathological processes such as fibroses, inflammation, the perception of pain, the development of cancer and neurodegeneration.

Genkyotex is developing a pipeline of first-in-class product candidates targeting one or multiple NOX enzymes. The lead product candidate, setanaxib (GKT831), a NOX1 and NOX4 inhibitor has shown evidence of anti-fibrotic activity in a Phase II clinical trial in primary biliary cholangitis (PBC, a fibrotic orphan disease).

Genkyotex SA has been listed on the Euronext market in Paris and Brussels since April 8, 2014.

Genkyotex has its registered office located 218 avenue Marie Curie—Forum 2 Archamps Technopole, 74166 Saint-Julien-en-Genevois, France (register Number at the company’s house: 439 489 022 RCS THONON-LES-BAINS)

Genkyotex SA is hereinafter referred to as the “Company.” The group formed by Genkyotex SA and Genkyotex Suisse SA is hereinafter referred to as the “Group.”

The following information constitutes the Notes to the financial statements for the nine-month period ended September 30, 2020 with comparative information for the twelve-month period ended December 31, 2019.

The consolidated financial statements of Genkyotex, or the “Financial Statements”, have been prepared under the responsibility of management of the Company and were approved and authorized for issuance by the Company’s Board of Directors on January 24, 2021.

Note 2: Accounting principles, rules and methods

2.1 Principles used in preparing the Financial Statements

The Financial Statements are presented in thousands of euros unless stated otherwise. Some amounts may be rounded for the calculation of financial information contained in the Financial Statements. Accordingly, the totals in some tables may not be the exact sum of the preceding figures.

The Company’s consolidated financial statements have been prepared in accordance with the historical cost principle, with the exception of financial instruments measured at their fair value.

Statement of compliance

These Financial Statements as of and for the year ended December 31, 2019 and the nine-month period ended September 30, 2020 have been prepared to meet the reporting requirements of Rule 3-05 of Regulation S-X for purposes of a filing with the U.S. Securities and Exchange Commission in connection with the acquisition of Genkyotex S.A. by Calliditas Therapeutics AB, a company publicly listed in the United States of America, as of November 3, 2020 (refer to paragraph “Going concern” and note 23). The Company has prepared these Financial Statements in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Boards, or IASB, and, with respect to the nine-month period ended September 30, 2020, in accordance with IAS 34 “Interim financial reporting”, except

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

that they do not include comparative financial information as of and for the year ended December 31, 2018 and for the nine-month period ended September 30, 2019 as required by IAS 1 “Presentation of Financial Statements”.

The term “IFRS” refers collectively to international accounting and financial reporting standards (IASs and IFRSs) and to interpretations of the interpretations committees (IFRS Interpretations Committee, or IFRS IC, and Standing Interpretations Committee, or SIC), whose application is mandatory for the periods presented.

As of December 31, 2019, and September 30, 2020, all IFRS relevant to the Company that the IASB has published and that are mandatory are the same as those endorsed by the EU and mandatory in the EU.

Going concern

The Company focuses on inventing and developing new treatments. The loss-making position over the reference periods is not unusual for a company at this stage of development.

The Company has managed to finance its operations to date primarily through successive capital fund-raising or convertible bonds.

The Company announced on August 13, 2020 the signing of an agreement for the acquisition of a controlling block in Genkyotex SA, representing 62.7% of the share capital and voting rights of Genkyotex from its main shareholders and its management team.

After receipt of clearance from the French Minister of Economy and Finance was received regarding foreign investments into France, Calliditas Therapeutics closed on November 3, 2020 the off-market block trade for a total consideration of €19.75m in cash (€2.73 per ordinary share*) plus contingent rights payable upon regulatory approvals of setanaxib, Genkyotex’s lead asset.

Calliditas Therapeutics filed with the French Financial Market Authority (“Autorité des Marchés Financiers” or the “AMF”) a simplified mandatory cash tender offer for the remaining Genkyotex shares at €2.80 per ordinary share plus contingent right payable upon regulatory approvals of setanaxib. Following the tender offer, Calliditas owned 86.24% of the share capital and voting rights of Genkyotex.

On December 9, 2020, the Company received a support letter from Calliditas Therapeutics confirming that it is their intention to continue supporting Genkyotex S.A., so as to enable it to meet its liabilities as they fall due and carry on its normal business without any significant curtailment to its operations. Based on this letter, the Board of Directors approved these financial statements on a going concern basis.

Accounting methods

The accounting principles adopted for the Financial Statements as of and for the nine-month period ended September 30, 2020 are the same as for the year ended December 31, 2019 with the exception of the following new standards, amendments and interpretations whose application is mandatory for the Company as of January 1, 2020:

•

Amendments to References to the Conceptual Framework in IFRS Standards, issued on March 29, 2018 and whose application is mandatory from January 1, 2020;

•

Amendments to IAS 1 and IAS 8: Definition of Material, issued on October 31, 2018 and whose application is mandatory from January 1, 2020;

•

Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform, issued on September 26, 2019 and whose application is mandatory from January 1, 2020;

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

•

Amendments to IFRS 3 Business Combinations, issued on October 22, 2018 and whose application is mandatory from January 1, 2020; and

•

Amendment to IFRS 16 Leases Covid 19- Related Rent Concessions issued on May 28, 2020 and whose application is for annual reporting periods beginning on or after June 1, 2020; early adoption is permitted.

Adoptions of these standards have not had a material impact on the Financial Statements.

Recently issued accounting pronouncements by the IASB that may be relevant to the Company’s operations but have not yet been adopted by the Company are as follows:

•

Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Classification of Liabilities as Current or Non-current—Deferral of Effective Date issued on January 23, 2020 and July 15, 2020 respectively and whose application is for annual reporting periods beginning on or after January 1, 2023;

•

Amendments to IFRS 3 Business Combinations,—References to the Conceptual Framework, IAS 16 Property, Plant and Equipment—Proceeds before Intended Use, IAS 37 Provisions, Contingent Liabilities and Contingent Assets—Onerous Contracts—Cost of Fulfilling a Contract, Annual Improvements 2018-2020, all issued May 14, 2020 and whose application is for annual reporting periods beginning on or after January 1, 2022;

•

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform—Phase 2 issued on August 27, 2020 and whose application is for annual reporting periods beginning on or after January 1, 2021.

The Company has not early adopted when applicable, these new accounting standards, amendments and interpretations.

It currently does not anticipate any significant impact on its Financial Statements at adoption date.

Impacts of the health crisis on the financial statements

In the context of the COVID-19 pandemic, the Company continues to closely monitor changes to the official guidelines and recommendations in order to protect its employees and subcontractors. The Company has also implemented strategies to mitigate the impact of the global crisis on its business and operations.

Accordingly, the Company has asked its employees in France and Switzerland to work from home and organize meetings and events remotely as much as possible.

To date, except for the impact of the delay in the development process of the products using the Vaxiclase platform (SIIL contract refer to note 3), the Company is only anticipating a limited impact from the COVID-19 pandemic on its operations, including the planned discussions with regulatory authorities, the conducting of clinical trials as well as interactions with the scientific community and other stakeholders.

The Company will continue to closely monitor the possible impact of COVID-19 on the conducting of clinical trials and discussions with health authorities and, depending on the evolution of the pandemic and of its potential material impact on such trials and discussions, will report to the markets on any such material impact.

2.2. Scope

According to IFRS 10, subsidiaries are all the entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

the entity and has the ability to affect those returns through its power over the entity. The subsidiaries are consolidated as from the date on which the Group acquires control. They are deconsolidated as of the date on which control ceases.

In connection with the combination of Genkyotex SA and Genkyotex Suisse SA which took place on February 28, 2017, Genkyotex Suisse SA was considered as the buyer from an accounting standpoint (reverse acquisition).

The scope of consolidation is as follows:

AS OF

DECEMBER 31, 2019

SEPTEMBER 30, 2020

Percent interest

Percent control

Percent interest

Percent control

GENKYOTEX SA

Parent company (from a legal standpoint)

GENKYOTEX SUISSE SA

100.00%

2.3. Reporting currency

The Group’s financial statements are prepared in euros (EUR).

2.4. Translation of the financial statements of foreign subsidiaries

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates as of the date this transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currency are converted into functional currency at the exchange rate on the closing date.

Differences resulting from the settlement or conversion of monetary items are recognized in profit and loss.

The financial statements of companies whose operating currency is not the euro (EUR) are converted as follows:

•

Statement of financial position items are converted using the closing rate for the year;

•

Items of the statement of consolidated operations are converted at the average exchange rate for the period.

The exchange differences arising on conversion for consolidation are recognized in the “currency translation reserve”.

The exchange rates used for the preparation of the Financial Statements are as follows:

Closing rate AS OF

Average rate for the periods ended AS OF

EXCHANGE RATE

DECEMBER 31,
2019

SEPTEMBER 30,
2020

DECEMBER 31, 2019
12 months

SEPTEMBER 30, 2020
9 months

CHF

1.0854

1.0804

1.1124

1.0680

2.5. Use of judgments and estimates

To prepare the financial statements in accordance with IFRS, the main judgements and estimates are made by the Group’s management based on the assumption of business continuity and on the information available at the time. These estimates are ongoing and are based on past experience as well as various other

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

factors judged to be reasonable and form the basis for assessment of the carrying amount of assets and liabilities. The estimates may be revised if the circumstances on which they are based change or as a result of new information. Actual results may differ significantly from these estimates if the assumptions or conditions change.

The significant estimates or judgments made by the Group relate to the following:

•

Valuation of share subscription options and non-voting shares allocated to employees and executives:

•

The fair value measurement of share-based payments is based on the Black & Scholes option valuation model, which includes assumptions about, the expected volatility of the share price over the lifetime of the instrument, the expected term of the options and the expected forfeitures. There is a high inherent risk of subjectivity when using an option valuation model to measure the fair value of share-based payments in accordance with IFRS 2.

•

The valuation assumptions adopted are disclosed in Note 9.

•

Defined benefit plans:

•

Defined benefit plans are reported in the balance sheet based on an actuarial valuation of the obligations at period-end, less the fair value of the plan’s assets. This valuation is determined by using the projected unit credit method while taking into account the workforce turnover rate, mortality probability and actuarial assumptions based on management estimates.

•

The valuation assumptions adopted are disclosed in Note 11.

•

Impairment test of the intangible asset recognized in connection with the license agreement signed with SIIL (for use of the Vaxiclase platform) and its extensions (hereinafter referred to as the “SIIL contract”):

•

The estimated fair value of the SIIL contract is calculated based on the discounted cash flow (DCF) method. In doing so, the Company’s management used estimates to determine:

•

future flows for the period until 2035, corresponding to the life of the patent underlying the license sold to SIIL;

•

the probability of success of the various stages of clinical development;

•

the discount rate;

•

the expected development timeline.

•

The valuation assumptions adopted are disclosed in Note 3.

2.6. Intangible assets

Research and development expenses

Research costs are recognized as expenses when they are incurred. Costs incurred on development projects are recognized as intangible assets when the following criteria are fulfilled:

•

it is technically feasible to complete the intangible asset so that it will be available for use or sale,

•

management intends to complete the intangible asset and use or sell it,

•

it is possible to use or sell the intangible asset,

•

it can be demonstrated that the intangible asset will likely generate economic benefits in the future,

•

adequate technical, financial and other resources necessary to complete the development and to use or sell the intangible asset are available, and

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

•

the expenditure attributable to the intangible asset during its development can be reliably measured.

Regarding the expenses incurred for developing a medicinal product and due to the risks and uncertainties inherent in the R&D process and in obtaining regulatory authorizations, the six criteria for capitalizing expenses are considered fulfilled only when the medicinal product has received marketing authorization.

Consequently, internal development expenses are recognized in the statement of consolidated operations when incurred.

SIIL contract

Initial valuation

In connection with the accounting for the combination of Genkyotex SA and Genkyotex Suisse SA on February 28, 2017, the Company recognized as an intangible asset a license agreement and its extensions signed between the Serum Institute of India Pvt. Ltd. (SIIL) and Genkyotex S.A. for the use of the Vaxiclase technology as part of the development by SIIL of acellular and multivalent vaccines containing antigens for whooping cough

In return for access to and use of the Vaxiclase technology in the authorized indications, the Company could receive up to US$57 million in initial payments and development and sales milestone payments based on criteria defined in the terms and conditions of the agreement, as well as royalties as a percentage of net sales.

The SIIL contract was valued to €10,697 thousand as of the acquisition date using the discounted cash flow (DCF) method, the future estimated cash flows being adjusted for the probability of success of the various phases in the development of products using the Vaxiclase technology.

Genkyotex S.A. signed as an extension to the SIIL contract in June 2018. Taking into account this latest extension, the agreement provides for:

•

An initial payment of €750 thousand (recognized during the first half of 2018 when the extension was signed),

•

Milestone payments for emerging markets for up to US$57 million,

•

Milestone payments for industrialized countries for up to €100 million.

The Company is also eligible to receive “single-digit percentage” royalties on sales.

Subsequent impairment testing

•

The SIIL contract is tested annually for impairment based on the same valuation method used for its initial valuation. The main assumptions used for the impairment testing are described in note 3.

Software

Software license acquisition costs are posted to assets based on the costs incurred to acquire and bring the software concerned online.

Other intangible assets

In application of the IAS 38 criteria, intangible assets acquired are recognized under assets at their acquisition cost.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

Amortization expense and duration

When an asset has a finite useful life, amortization is calculated using the straight-line method to spread the cost over the estimated useful life, specifically:

Items			Amortization period
Software			1 year–straight line
SIIL contract and extensions			19 years–straight line (2017–2035 corresponding to the life of the patent underlying the Vaxiclase technology license sold to SIIL)

The amortization expense for intangible assets is recognized in the consolidated income statement as:

•

“General and administrative expenses” for amortization expenses related to accounting software, and

•

“Research and development expenses” for the amortization expenses relating to the SIIL contract and extensions and the software used by the laboratory.

2.7. Property, plant and equipment

Property, plant and equipment are valued initially at their acquisition cost.

Assets are depreciated on a straight-line basis over their useful life.

The following depreciation periods are used:

Items			Depreciation period
Office equipment, furniture and computer equipment			3 to 5 years
Laboratory equipment			5 to 8 years
Right of use			1 to 3 years

The depreciation expense for property, plant and equipment is recognized in the consolidated income statement under:

•

“General and administrative expenses” for depreciation of office equipment, furniture and computer equipment; and

•

“Research and development expenses” for laboratory equipment and other laboratory assets.

2.8. Non-current financial assets

The Group’s non-current financial assets are made up of:

•

loans and receivables initially reported at fair value and subsequently evaluated at amortized cost, using the effective interest rate method. Collateral deposits and liquidity contract are included in this category.

Financial assets having a maturity over one year are classified under “Non-current financial assets”.

2.9. Other current assets

Research tax credit (“CIR”)

Research tax credits are granted to the Group’s French companies by the French State as an incentive to conduct technical and scientific research. Companies with expenses that meet the eligibility criteria receive

F-15

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

a tax credit that can be used to pay the corporate income tax due in the year in which it is granted, as well as in the following three financial years or, as the case may be, any unused surplus can be reimbursed.

In the absence of taxable income, and in view of the Company’s SME status, the CIR receivable from the French State is paid in the year following the year in which it is granted.

The research tax credit is recorded in assets for the year it was granted that corresponds to the year during which eligible expenses giving rise to a tax credit were incurred.

The research tax credit is presented in the consolidated statement of consolidated operations under grants in “Research and development expenses”.

Grants

Grants received are reported as soon as the corresponding receivable becomes certain, taking into consideration the conditions specified when the subsidy was granted.

2.10. Cash and cash equivalents

Cash and cash equivalents recognized in the balance sheet include cash at banks, cash at hand and short-term deposits with an initial maturity of less than three months.

They are held for meeting short-term cash commitments, are easily convertible into a known amount of cash and exposed to negligible risk that they will change in value.

For cash flow statement purposes, net cash consists of cash and cash equivalents as defined above.

2.11. Capital

Classification as equity depends on the specific analysis of the characteristics of each instrument issued. The Company’s ordinary shares are classified as equity instruments.

Costs directly attributable to the issuance of shares are recognized, net of tax, as a reduction from shareholders’ equity.

2.12. Share-based payments

The Company has implemented several compensation plans settled in equity instruments in the form of warrants (“BSA”) and share subscription options (“Stock-options”) attributed to employees and board members.

The grant date fair value of the equity settled share-based payments is recognized as an expense with a corresponding increase to equity over the vesting period of the awards

The fair value of the equity instruments granted to employees is measured using the Black-Scholes option valuation model.

Assumptions used in measuring the fair value of such options are disclosed below:

•

The share price used is equal to the stock market price at grant date,

•

The risk-free rate is based on the average lifetime of the instruments,

•

Expected volatility is calculated with reference to a sample of listed companies in the biotechnology sector, over a period commensurate with the expected term of the option, and

•

The expected term and forfeiture rate.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

2.13. Borrowings and financial liabilities

Unless otherwise indicated, loans and borrowings are reported after initial recognition at amortized cost, calculated using the effective interest rate (“EIR”) method, in accordance with IFRS 9.

The portion of financial debts due within one year is presented as “Current financial debt”.

2.14. Conditional advances

The Group benefits from a certain amount of public aid, in the form of conditional advances.

They are reported in accordance with IAS 20. These advances are granted at below market interest and measured at amortized cost, in accordance with IFRS 9:

•

The initial difference between the advance received and its amortized cost is a grant recorded to income in accordance with IAS 20.

•

The financial cost of the conditional advances, calculated at the effective interest rate, is then recorded under financial expenses.

If the project which benefits from the conditional advance fails, the conditional advance is usually forgiven. Any such advance forgiveness would be recorded to income as a grant.

2.15. Convertible bonds

Financial instruments, such as convertible bonds (“OCA”) or convertible bonds with stock acquisition rights options (“OCABSA”) undergo a specific analysis. Refer to note 10.2

2.16. Employee benefit obligations

The Group provides retirement, death and disability benefits to its employees in line with local customs and requirements through pension payments by social security bodies, which are funded by Group and employee contributions (defined contribution plan) in Switzerland and France, the two countries where the Group operates.

The Group also provides retirement, death and disability benefits to its Swiss and French employees through the following defined-benefit plans:

•

For Swiss employees, Genkyotex Suisse SA’s compulsory company-wide defined-benefit plan through a program that is funded through employer (50%) and employee (50%) contributions. This company-specific plan has been in place since Genkyotex Suisse SA was founded, and all Swiss employees of this company are beneficiaries of the plan. On retirement, the plan participant will receive his/her accumulated savings, which consist of all contributions paid in by the employer and the employee (net of any withdrawals) and the interest granted on those savings, which are fixed, according to the law for the compulsory part and at the discretion of the Council of the Foundation for the optional part. At retirement age, the plan participant will be entitled to choose between a lump sum payment or an annuity, or a combination of the two.

•

Employees of the Group’s French companies are entitled to a retirement lump sum payment at the time of retirement.

Pension plans, similar compensation and other employee benefits that qualify as defined benefit plans (in which the Group guarantees an amount or defined level of benefits) are reported in the balance sheet based on an actuarial valuation of the obligations at period end, minus the fair value of the plan’s assets.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

This valuation is determined by using the projected unit credit method, taking into account staff turnover and mortality probability. Any actuarial differences are reported in equity under “Other comprehensive income.”

The Group’s payments into defined contribution plans are reported under expenses in the consolidated income statement for the period to which they relate. Retirement expenses (cost of services rendered and interest expense) are presented in operating income (loss).

2.17. Provisions

A provision is recognized if, as a result of a past event, a company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date.

2.18. Other current liabilities

The fair value of current liabilities is equivalent to their carrying amount in the balance sheet, taking into account the extremely short deadlines for payment.

2.19. Financial assets and liabilities and impacts on consolidated income statement

The Company has established three categories of financial instruments depending on their valuation methods and uses this classification to disclose some of the information required by IFRS 7:

•

Level 1: financial instruments listed on an active market;

•

Level 2: financial instruments whose valuation methods rely on observable inputs; and

•

Level 3: financial instruments whose valuation methods rely entirely or partly on unobservable inputs, an unobservable input being defined as one whose measurement relies on assumptions or correlations that are not based on the prices of observable market transactions for a given instrument on the valuation date, nor on observable market data on the valuation date.

2.20. Revenue

Revenue is recognized in accordance with IFRS 15, the fundamental principle of which is based on the transfer of control of goods and services to the customer.

The standard sets out a five-step general approach to revenue recognition:

•

Step 1: Identify the contract;

•

Step 2: Identify the “performance obligations” under the contract. The “performance obligations” serve as a unit of account for the revenue recognition;

•

Step 3: Determine the transaction price;

•

Step 4: Allocate the transaction price to each “performance obligation”;

•

Step 5: Recognize the revenue when the “performance obligation” is satisfied, either on a given date or over time.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

The standard specifies how to treat licenses and distinguishes two types:

•

those which constitute a right to access intellectual property as it will change over the term of the license as a result of future action taken by the licensor. These licenses are known as “dynamic licenses” or “rights to access” and recognition of the associated income is spread over the term of the license; and

•

those which constitute a right to use “fixed” intellectual property, as it exists as of the date on which the license is assigned. These licenses are called “static licenses” or “rights of use”, and the income related to them is recognized on a given date at the time when control of the license is transferred, unless the royalty exception applies, regardless of the type of license.

Variable consideration, except for license royalties is recognized when it is highly probable.

IFRS 15 also provides that the revenue related to intellectual property licenses for which royalties are received should be recognized when the later of the following two events occurs:

•

the license is sold or used by the customer (on which the calculation of royalties is based);

•

the “performance obligation” to which these royalties have been allocated has been satisfied.

2.21. Details of expenses and products by function

The Group presents its consolidated income statement by function in two categories:

•

Research and development expenses;

•

General and administrative expenses.

Expenses are broken down on the basis of cost accounting.

The research tax credit and other operating grants are presented as a reduction of the research and development costs. They are recognized in profit or loss on a systematic basis as the entity recognizes as expenses the costs that the grants are intended to compensate.

2.22. Net financial income and expenses

Net financial income includes:

•

Expenses related to the financing of the Company: interest paid and unwinding of conditional advances and financial liabilities.

•

Interest income from term deposits and the capital bond.

•

Changes in fair values of derivative financial instruments.

Gains and losses on currency translation are also reported under financial income (expenses).

2.23. Income taxes

Taxable assets and liabilities are valued at the amount expected to be recovered from or paid to the tax authorities.

The tax rates and tax regulations used to calculate these amounts are those which were enacted or substantively enacted at the end of the reporting period.

Deferred taxes are reported using the variable deferral method for all temporary differences existing at the end of the reporting period between the tax base of assets and liabilities and their carrying amount on the balance sheet.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 2: Accounting principles, rules and methods (continued)

Deferred tax assets are recognized for unused tax loss carryforward to the extent that taxable temporary differences are available and, beyond, when it is probable that the Company will have future taxable profits to which those unused tax losses could be applied. The measurement of identifiable deferred tax assets requires Management to make estimates about the time period over which the deferred losses will be used up, and about the level of future taxable income, based on the tax strategies adopted.

2.24. Earnings (loss) per share

Basic earnings (loss) per share are calculated by dividing the net income (loss) attributable to the Company shareholders by the weighted average number of the shares outstanding during the period.

Diluted earnings (loss) per share are calculated by adjusting the net income (loss) attributable to the holders of ordinary shares and the weighted average number of ordinary shares outstanding by the effects of all the dilutive potential ordinary shares.

If the inclusion of instruments giving deferred access to capital (warrants or convertible bonds) creates an anti-dilutive effect, those instruments are not taken into account.

2.25. Segment information

The Group operates in only one business segment, the research and development of pharmaceutical products.

Assets, operating losses as well as research and development facilities are located in France and in Switzerland.

Note 3: Intangible assets

(amounts in thousands of euros)	Software		SIIL Contract and extensions		Total
GROSS AMOUNT
As of December 31, 2018		16		10,697		10,713
Addition		1		—		1
As of December 31, 2019		17		10,697		10,714
Addition		1		—		1
As of September 30, 2020		18		10,697		10,714
AMORTIZATION AND IMPAIRMENT
As of December 31, 2018		16		1,043		1,060
Increase		—		567		567
Exchange effect		1		—		1
As of December 31, 2019		17		1,611		1,628
Increase		1		426		427
Impairment				5,859		5,859
As of September 30, 2020		18		7,896		7,914
NET BOOK VALUE
As of December 31, 2019		—		9,086		9,086
As of September 30, 2020		—		2,801		2,801

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 3: Intangible assets (continued)

The Company carried out an impairment test of the SIIL contract at December 31, 2019 and September 30, 2020 using the same valuation model (risk adjusted discounted cash flows) that was used for the initial accounting of the contract.

The main valuation assumptions used for the assessment of the fair value of the contract at December 31, 2019 and September 30, 2020 are as follows:

•

The business plan from the reporting date until 2035, corresponding to the life of the patent for the Vaxiclase technology licensed to SIIL (no terminal value).

•

The probability of success of the various stages of clinical development (based on a study conducted by Biomedtracker in 2016 who undertook a retrospective analysis of the probability of success of the various stages of clinical development in 9,985 trials between 2006 and 2015):

	Probability of success of each phase		Overall probability of success
POC(1)		100%		100%
Phase 1		70%		70%
Phase 2		43%		30%
Phase 3		73%		22%
Commercial success		89%		19%

(1)

Proof of concept already achieved

•

The discount rate of 17% at September 30, 2020 (14.2% at December 31, 2019), was estimated based on a weighted average cost of capital based on the risk premium of the French equity market, an average beta originating from a sample of biotechnology companies operating in the liver disease and a risk premium specific to the Company. The increase in the discount rate is due to an increase of the risk premium specific to the Company

In addition, at the end of December 2020, SIIL informed the Company that given the Covid-19 situation, it would be difficult for them to focus and develop any other vaccine than Covid. They also indicated that they were facing technical challenges with the technology and were not getting convincing results. As a result the timeline that prevailed at the end of 2019 is no longer valid as of September 30, 2020 and SIIL indicated that they would expect that it would be pushed back by 2 years i.e. the first product to be developed using the Vaxiclase technology is not expected to enter a phase 1 clinical trial before the first quarter of 2024 (compared to the first quarter of 2022 previously).The timeline to develop the products until market authorization was also reassessed and extended in light of the Covid-19 situation, prior delays already experienced and the technical challenges faced.

This impairment test highlighted a loss of value of €(5,859) thousand as of September 30, 2020 (no impairment at December 31, 2019), which has been recognized in research and development expenses. The loss is mainly explained by the delay in the expected development by SIIL of the products using the Vaxiclase technology.

The sensitivity of the assumptions used in the valuation model is as follows at September 30, 2020:

•

A 1-point increase in the discount rate would generate an additional impairment loss of €(283) thousands;

•

A 2.5-point decrease in the probability of success of different phases would generate an additional impairment loss of €(433) thousands;

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 3: Intangible assets (continued)

•

A 10% deterioration in the business plan would generate an additional impairment loss of €(1,004) thousands;

•

A one-year delay in the development phases of the project would generate an additional impairment loss of €(767) thousands.

Note 4: Property, plant and equipment

(amounts in thousands of euros)	Laboratory equipment		Office equipment, furniture and computer equipment		Buildings (right of use)		Total
GROSS AMOUNT
As of January 1, 2019		538		98		—		636
IFRS 16 first application impact		—		—		262		262
Disposal		—		1		—		1
Exchange effect		15		3		10		29
As of December 31, 2019		553		102		272		927
Addition		—		2		171		173
Disposal		(46)		(11)		—		(57)
Exchange effect		2		1		0		3
As of September 30, 2020		509		94		443		1,046
DEPRECIATION
As of January 1, 2019		508		97		—		605
IFRS 16 first application impact		—		—		131		131
Increase		15		1		—		16
Decrease		—		—		—		—
Exchange effect		15		3		3		21
As of December 31, 2019		538		101		134		772
Increase		7		1		102		109
Decrease		(46)		(11)		—		(57)
Exchange effect		2		1		(0)		3
As of September 30, 2020		501		91		235		827
NET BOOK VALUE
As of December 31, 2019		15		1		138		154
As of September 30, 2020		8		2		208		218

The increase in right of use in 2020 is due to the renewal of the lease agreement for the Archamps premises for an additional period of 3 years and to an extension of the lease term by 8 months of the Plan-les-Ouates premises.

Except for the impact of the delay in the development process of the products using the Vaxiclase platform (SIIL contract refer to note 3), the COVID-19 pandemic had a limited impact on the company’s operations (refer to note 2.1 Impacts of the health crisis on the financial statements). No indicators of impairment have been identified on other assets and as a result, no additional impairment test was performed at the closing dates.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 5: Non-current financial assets

(amounts in thousands of euros)	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Cash reserve related to the liquidity agreement		14		21
Guarantees		15		15
Total non-current financial assets		29		36

Note 6: Other current assets and prepaid expenses

(amounts in thousands of euros)	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Research tax credit(1)		899		356
Value added tax		229		206
Social security receivables		16		71
Suppliers–advances payment and debit balance(2)		75		—
Miscellaneous		131		35
Total other current assets		1,349		668

(1)

Research Tax Credit (“CIR”)

CIR research tax credits are payable by the government in the year following its recognition when there is no taxable net income to be offset. The Company does not have taxable net income.

CIR recorded as of December 31, 2019 includes CIR 2019 (€899 thousand), reimbursed by the French Tax Authorities in April 2020.

CIR recorded as of September 30, 2020 includes the CIR estimated for the nine-month period ended September 30, 2020 (€356 thousand).

The CIR is estimated on the basis of the expenses that meet the eligibility criteria.

(2)

Suppliers advances payment and debit balance involve installments paid to the Contract Research Organization (CRO) responsible for studies.

(amounts in thousands of euros)

AS OF DECEMBER 31,
2019

AS OF SEPTEMBER 30,
2020

Prepaid expenses

151

179

Prepaid expenses mainly relate to research services provided by an external provider.

Note 7: Cash and cash equivalents

Cash and cash equivalents are broken down as follows:

(amounts in thousands of euros)	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Bank accounts		2,417		3,590
Short-term deposits		—		—
Total cash and cash equivalents		2,417		3,590

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 8: Share capital

	At the end of the financial periods presented
SHARE CAPITAL	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Share capital (in thousands of euros)		8,683		11,549
Number of shares		8,683,449		11,548,562
o/w ordinary shares		8,863,449		11,548,562
Par value of shares (in euro)		1.00 €		1.00€

Reverse stock split

After closing of the market on March 28, 2019, the old Genkyotex shares (ISIN code: FR0011790542) have been delisted from Euronext and have been replaced by the new Genkyotex shares (ISIN code: FR0013399474) beginning at the start of trading on March 29, 2019. Every 10 shares with a par value of €0.10 of the Company’s issued and outstanding common stock have automatically been combined into one share with a par value of €1.00. The number of shares of common stock underlying Genkyotex’ options, warrants, convertible securities or other rights to acquire shares of common stock was adjusted accordingly. This technical adjustment is purely arithmetical and has no impact on the value of Genkyotex shares held by the shareholders.

Capital increases

During the nine-month period ended September 30, 2020, 80 bonds were converted for a total of 417,816 new shares with a par value of €1.00, resulting in a €418 thousand capital increase plus an issue premium of €382 thousand.

Furthermore, the Company carried out a capital increase in February 2020 with maintenance of preferential subscription rights (“DPS”) at the end of which 2,447,297 new shares were issued, i.e. a capital increase of €2,447 thousand, increased by a premium of €2,496 thousand.

As of September 30, 2020, the share capital of the Company was €11,548,562.00 divided into 11,548,562 fully subscribed ordinary shares with a nominal value of €1.00 per share.

Capital management

The Group’s policy is to maintain a sufficient capital base in order to preserve the confidence of investors and creditors and to support the Company’s future growth.

Following the Company’s IPO on the regulated Euronext market in Paris and Brussels, the Company signed a liquidity contract on April 18, 2014, in order to limit intra-day volatility in the Company’s share price. For this purpose, the Company had initially entrusted €200 thousand to Oddo Corporate Finance so that it could carry out purchase and sale transactions on the Company’s shares. The contract was transferred to Kepler Cheuvreux on May 7, 2018.

As of September 30, 2020—under the contract—6,632 treasury shares (or €17 thousand) were removed from equity and €21 thousand in cash was entered as non-current financial assets.

As of December 31, 2019—under the contract—7,789 treasury shares (or €16 thousand) were removed from equity and €14 thousand in cash was entered as non-current financial assets.

As of December 31, 2018—under the contract—94,540 treasury shares (or €122 thousand) were removed from equity.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 8: Share capital (continued)

Dividends

The Company paid no dividend in the financial periods presented.

Note 9: Share-based payments

Following the closing of the acquisition by Calliditas Therapeutics of a controlling interest of 62.7% in Genkyotex SA in November 2020 and the subsequent simplified mandatory cash tender offer, the BSA022010, BSA12/2013 and BSA09/2014 were waived, the stock option012018, stock option092018 and stock option032019 were waived by current employees. The vesting of the stock option062020 has been accelerated and all stock option062020 have been exercised. Two former employees agreed to waive their stock options012018 and stock option032019 in case of a squeeze out subsequent to a tender offer.

Warrants

The Company issued warrants to employees in 2010, 2013 and 2014 which were all fully vested by September 30, 2017. The following table summarizes the main features of these warrants which are still outstanding:

Plan features

Type

Grant date

Number of
warrants
granted(1)

Maturity date

Adjusted
exercise
price(2)

BSA 02/2010

02/04/2010

155,200

10 years

€

30.00

BSA 12/2013

12/20/2013

116,000

10 years

€

40.00

BSA 09/2014

09/12/2014

35,000

10 years

€

57.90

(1)

After the reverse stock split at the beginning of 2019, the parity is 10 BSAs issued before 2019 for 1 new share.

(2)

The exercise price was adjusted to take into account the reverse stock split.

Changes in number of outstanding warrants

Type	Grant date	Number of outstanding warrants										Number of shares which can be subscribed(3)
Type	Grant date	At 12/31/2019		Granted		Exercised		Lapsed		At 09/30/2020		Number of shares which can be subscribed(3)
BSA 02/2010	02/04/2010		155,200		—		—		(2,700)		152,500		15,295
BSA 12/2013	12/20/2013		116,000		—		—		—		116,000		11,631
BSA 09/2014	09/12/2014		35,000		—		—		—		35,000		3,509
Total			306,200		—		—		(2,700)		303,500		30,435

(3)

Following the capital increase which took place on February 6, 2020 (see Note 8), the maximum number of shares that can be subscribed was adjusted to take into account the dilutive effect of maintaining the preferential subscription rights.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 9: Share-based payments (continued)

Stock Options

The following table summarizes the option plans issued to employees and the assumptions adopted for IFRS 2 valuation:

		Plan features						Assumptions
Type	Grant date	Number of options granted(1)		Exercise period	Adjusted exercise price(2)			Volatility		Risk-free rate		Total initial IFRS 2 valuation (€ thousands) (Black&Scholes)
Stock option 01/2018	01/09/2018		1,159,934	10 years		€	16.70		60.68%		0.00%		1,096
Stock option 10/2018	10/11/2018		20,000	10 years		€	14.90		56.86%		0.11%		13
Stock option 03/2019	03/21/2019		1,336,380	10 years		€	9.10		56.80%		-0.27%		604
Stock option 06/2020	06/04/2020		187,612	10 years		€	2.30		59,33%		-0.49%		241

(1)

After the reverse stock split at the beginning of 2019, the exchange ratio was 10 stock options issued before 2019 for 1 new share.

(2)

The exercise price was adjusted to take the reverse split into account.

The plans only have service conditions and vest over 4 years by tranche of 25% (graded vesting).

Changes in number of outstanding warrants

Type	Grant date	Number of warrants outstanding										Number of shares which can be subscribed(3)
Type	Grant date	At 12/31/2019		Granted		Exercised		Lapsed		At 09/30/2020		Number of shares which can be subscribed(3)
Stock option 01/2018	01/09/2018		1,130,153		—		—		(28,294)		1,101,859		110,513
Stock option 10/2018	10/11/2018		20,000		—		—		—		20,000		2,006
Stock option 03/2019	03/21/2019		1,336,380		—		—		(61,750)		1,274,630		127,882
Stock option 06/2020	06/04/2020		—		187,612		—		—		187,612		187,612
TOTAL			2,486,533		187,612		—		(90,044)		2,584,101		428,013

(3)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 9: Share-based payments (continued)

Stock-based compensation expense recognized for the periods presented

(amounts in thousands of euros)

	TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2019								NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020
Type	Probable cost of the plan		Cumulative expenses– beginning of period		Expense for the period		Cumulative expense to date		Probable cost of the plan		Cumulative expenses– beginning of period		Expense for the period		Cumulative expense to date
Stock option 01/2018		1,068		511		250		761		1,041		761		108		869
Stock option 10/2018		13		1		6		7		13		7		2		10
Stock option 03/2019		604		—		228		228		577		228		123		351
Stock option 06/2020		—		—		—		—		241		—		38		38
Total		1,685		512		483		996		1,872		996		271		1,268

Note 10: Borrowings and financial liabilities

(amounts in thousands of euros)	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Conditional advances		—		—
Lease obligations (IFRS 16)		17		63
Non-current financial liabilities		17		63
Conditional advances		—		—
Lease obligations (IFRS 16)		122		145
Convertible bonds (refer to note 10.2)		725		—
Derivative liabilities		64		—
Bank overdrafts		0		0
Current financial liabilities		912		146
Total financial liabilities		928		209

The increase in the lease obligation in 2020 is due to the renewal of the lease agreement for the Archamps premises for an additional period of 3 years and to an extension of the lease term by 8 months of the Plan-les-Ouates premises.

In 2020, the convertible bonds issued to Yorkville were fully converted.

Breakdown of financial liabilities by maturity, at value on redemption

The maturity of financial liabilities of the Company is broken down as follows:

(amounts in thousands of euros)	AS OF SEPTEMBER 30, 2020		Current		Non-current
(amounts in thousands of euros)	AS OF SEPTEMBER 30, 2020		< 1 year		1 to 5 years		> 5 years
Conditional advances		—		—		—		—
Lease obligations		208		145		63		—
Convertible bonds		—		—		—		—
Derivative liabilities		—		—		—		—
Bank overdrafts		0		0		—		—
Total financial liabilities		209		145		63		—

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 10: Borrowings and financial liabilities (continued)

10.1 Conditional advances

CHANGE IN CONDITIONAL ADVANCES AND SUBSIDIES (amounts in thousands of euros)	OSEO 3– ProCervix (GTL001)		TOTAL
As of January 1, 2019		118		118
Proceeds from conditional advances		—		—
Repayment		(118)		(118)
Subsidies		—		—
Financial expenses		1		1
As of December 31, 2019		—		—
Proceeds from conditional advances		—		—
Repayment		—		—
Subsidies		—		—
Financial expenses		—		—
As of September 30, 2020		—		—

OSEO Innovation conditional advance—OSEO 3

On January 11, 2013, Genkyotex SA (formerly Genticel SA) obtained from OSEO an interest-free conditional advance to “extend the Phase I clinical studies of the ProCervix (GTL001) project” for a total of €849 thousand.

Following confirmation of completion of the program and after obtaining the statement of expenditure incurred on the project financed by OSEO, the conditional advance was reduced to take into account the fact that actual expenditure was less than projected. The aid was thus reduced to €812 thousand, and an amendment was signed on September 5, 2014, to change the repayment dates.

The Company repaid this advance in several installments between September 30, 2014 and June 30, 2019 and there is no remaining outstanding liability at December 31, 2019 and September 30, 2020.

10.2 Convertible bonds

CHANGE IN CONVERTIBLE BONDS (amounts in thousands of euros)	2019 YORKVILLE OCABSA		2018 YORKVILLE OCABSA		TOTAL
As of January 1, 2019		—		3,510		3,510
Issuance		1,600		—		1,600
Derivative liabilities		(128)		—		(128)
Amortized cost of debt		53		(260)		(207)
Debt extinction		—		(1,600)		(1,600)
Conversion		(800)		(1,650)		(2,710)
As of December 31, 2019		725		—		725
Cash inflow		—		—		—
Derivative liabilities		—		—		—
Amortized cost of debt		75		—		75
Debt extinction		—		—		—
Conversion		(800)		—		(800)
As of September 30, 2020		—		—		—

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 10: Borrowings and financial liabilities (continued)

Convertible bonds with share subscription warrants (“2018 YORKVILLE OCABSAs”) issued to YA II PN Ltd (“Yorkville”) on August 20, 2018.

On August 20, 2018, the Company signed a convertible bond (OCA) with stock acquisition rights (BSA) (referred to as the “2018 YORKVILLE OCABSA”) agreement with YA II PN Ltd (“Yorkville”) to raise up to €7.5 million, at the Company’s discretion.

The agreement comprised two tranches:

•

A first tranche of 500 OCAs for a nominal amount of €5 million (as of the signature date) ;

•

A second tranche consisting of OCAs for a nominal amount of €2.5 million which became null and void on November 23, 2018.

The OCAs have the following features:

•

Par value: €10,000

•

Subscription price: 98% of par

•

Commitment fees: 6% of par value

•

Maturity: 12 months

•

No interest

•

Conversion methods: N = Vn / P where

•

N corresponds to the number of shares that can be subscribed

•

Vn corresponds to the par (nominal) value of the bond

•

P corresponds to 92% of the average share price for the five trading days before the conversion request.

If the OCAs are not converted before the maturity date, they are refundable in cash.

The BSAs have the following features:

•

Maturity: 5 years

•

Exercise price: 115% of the average share price for the five trading days before the tranche is issued.

The Company incurred €410 thousand in fees setting up the bond, including €300 thousand in commitment fees.

Initial Accounting treatment

The OCAs are analyzed as hybrid instruments (the parity for conversion is not fixed and depends on the stock market price) including a non-derivative host (financial debt) and an embedded derivative (conversion option). In accordance with paragraph 4.3.5 of IFRS 9, the Company chose to designate the OCAs at full fair value through profit and loss, therefore not separating the debt and the embedded derivatives.

Because of the fixed exchange parity of the BSA, the Company analyzed them as equity instruments and they were booked to equity for their fair value upon issuance.

As a result, as of the date the agreement was signed and the first tranche was issued, the Company recorded:

•

The fair value of the BSAs for €242 thousand

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 10: Borrowings and financial liabilities (continued)

•

The fair value of the OCAs amounting to €5,400 thousand, or 108% of their par value;

•

a €742 thousand financial expense (day-one loss) representing the difference between 98% of the par value (issuing price) net of the BSA estimated fair value and the fair value of the OCAs,

•

The commitment fee amounting to €300 thousand and the other issuance fees amounting to €110 thousand were also recorded to expense.

In the course of 2018, subsequently to the issuance of the first tranche, Yorkville converted 175 OCAs for €1.75 million representing 149,762 shares (share price for conversion purposes ranging from €8.77 to €14.87).

Subsequent accounting of the OCAs

Between January 1, 2019 and July 31, 2019, Yorkville converted 165 additional OCAs for €1.65 million representing 310,721 of new shares (share price for conversion purposes ranging from €3.39 to €7.949).

In August 2019, the Company agreed with Yorkville Advisors Global—the management company of a US investment fund—to extend the conversion period for the remaining €1.6 million of OCA still outstanding at that date.

To this end, on August 19, 2019, Genkyotex signed an agreement to buy back from Yorkville, the remaining €1.6 million of 2018 YORKVILLE OCABSAs maturing on August 20, 2019, and then immediately issued to Yorkville 160 convertible bonds (the “2019 YORKVILLE OCAs”) for a total nominal amount of €1.6 million. There was no cash payment in connection with these agreements, the outstanding 2018 YORKVILLE OCABSAs being offset by the 2019 YORKVILLE OCAs.

In accordance with IFRS 9, the redemption of the 2018 YORKVILLE OCABSAs was analyzed by the Company to be a debt extinction.

Convertible bonds (“2019 YORKVILLE OCAs”) issued to YA II PN Ltd (“YORKVILLE”) on August 19, 2019

The main features of the 2019 YORKVILLE OCAs issued on August 19, 2019 are:

•

The nominal unit value of the OCAs is equal to ten thousand euro (€10,000). Each OCA will be issued at a subscription price per OCA equal to 100% of its nominal unit value, a total nominal amount of one million six hundred thousand euro (€1,600,000).

•

The OCAs (i) are freely assignable or transferable by the Investor to any of its affiliates and (ii) may not be transferred to any other third party without the prior written consent of the Company.

•

The OCAs will not be listed or admitted to trading on the regulated markets of Euronext Paris or Euronext Brussels or on any other financial market. Each OCA expires twelve (12) months from its issue (the “Maturity date”). In the event that an OCA is not converted before the Maturity date, the Company is obliged to repay the outstanding amount in cash.

•

The OCAs do not bear any interest. However, in the event of the occurrence of a Default (2), each OCA outstanding will bear interest at the rate of 15% per year from the date of the Default and up to (i) the date on which the Default is resolved, or (ii) the date on which the OCA has been fully converted and/or repaid, if the Default has not yet been resolved.

•

The number of new shares issued by the Company for the benefit of each OCA holder when converting one or more OCAs corresponds to the amount of the conversion divided by the applicable Conversion Price. The “Conversion Price” is equal to 92% of the weighted average share price

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 10: Borrowings and financial liabilities (continued)

quoted on Euronext (as reported by Bloomberg) (the “Average Prices”) on the five (5) consecutive stock exchange sessions up to the trading session immediately before the conversion date.

The Company incurred €103 thousand of expenses directly attributable to the issuance of the debt.

Initial Accounting treatment

The convertible bonds are analyzed as hybrid instruments (the parity for conversion is not fixed and depends on the stock market price) including a non-derivative host (financial debt) and an embedded derivative (conversion option). In accordance with IFRS 9, the debt component is amortized using the effective interest rate method, over the estimated maturity date. If the convertible bond is converted before the estimated maturity date, any difference between the fair value of the subscribed shares and the total value of (the net book value of the financial debt + the fair value of the conversion option) is recorded to the profit and loss.

The conversion option of the convertible bonds was bifurcated and classified in derivative instruments due to the parity not being fixed and measured at fair value on the date of issuance (based on the Monte-Carlo valuation model) with recognition of the changes in fair value in profit or loss in accordance with IFRS 9.

At the date of issue, the value of the derivative liability was €128 thousand or 8% of the total nominal amount of €1,600 thousand.

In the course of 2019, subsequently to the issuance of the 2019 Yorkville OCA, Yorkville converted 80 OCAs for €0.8 million representing 437,966 shares (share price for conversion purposes ranging from €1.785 to €1.810). As of December 31, 2019, the derivative liability was €64 thousand or 8% of the residual nominal amount of €800 thousand.

Conversions in financial year 2020

In financial year 2020, Yorkville converted the 80 remaining 2019 YORKVILLE OCA in accordance with the following terms and conditions:

Conversion date	Number of bonds		Amounts (in €)			Conversion price			Number of shares issued		Issuance premium
01/14/2020		30		€	300,000		€	1.874		160,085		139,914
01/15/2020		50		€	500,000		€	1.940		257,731		242,267
Total converted in 2020		80		€	800,000					417,816		382,181

As of September 30, 2020, no more 2018 YORKVILLE OCABSAs or 2019 YORKVILLE OCA were outstanding.

The 666,312 BSAs which were issued with the first tranche of the 2018 YORKVILLE OCABSAs (giving the right to subscribe 66,631 shares after taking into account the reverse stock split which took place on March 29, 2019) were still outstanding.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 10: Borrowings and financial liabilities (continued)

10.3 Lease obligations

The following table shows the changes in lease liabilities:

CHANGES IN FINANCIAL DEBT—LEASE OBLIGATIONS (amounts in thousands of euros)	Financial debt (lease liabilities)
As of January 1, 2019		—
IFRS 16 first application impact		263
(+) Newlease liabilities		—
(-) Repayments (IFRS 16)		(121)
(-) Advance payment		(9)
Exchange rate		6
As of December 31, 2019		139
(+) New lease liabilities		171
(-) Repayments (IFRS 16)		(102)
(-) Advance payment		—
Exchange rate		1
As of September 30, 2020		208

Note 11: Employment benefit obligations

EMPLOYEE BENEFIT OBLIGATIONS (amounts in thousands of euros)	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Swiss employees		1,335		874
French employees		13		86
Employee benefit obligations		1,348		960

11.1 Swiss employees

The defined benefit obligation related to the 2nd pillar of the Swiss pension system is assessed using the following assumptions:

ACTUARIAL ASSUMPTIONS	AS OF DECEMBER 31, 2019	AS OF SEPTEMBER 30, 2020
Age at retirement	Voluntary retirement 64 years of age for women/ 65 years of age for men
Discount rate	0.20%	0.20%
Mortality table	LPP 2015 generation	LPP 2015 generation
Salary revaluation rate	1.00%	1.00%
Retirement pension inflation rate	0.50%	0.50%
Deposit rate on savings accounts	1.00%	1.00%
Turnover rate	10.00%	10.00%

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 11: Employment benefit obligations (continued)

Mortality rate

Assumptions regarding future mortality are based on advice, statistics publications and experience. The weighted average duration of the retirement obligation is as follows:

			AS OF DECEMBER 31, 2019						AS OF SEPTEMBER 30, 2020
The weighted average duration of the retirement obligation					26.00						25.90

Changes to the retirement obligation and the fair value of retirement benefit plan assets are as follows:

(amounts in thousands of euros)	Defined benefit plan obligation		Fair value of plan assets		Employee benefit obligations
January 1, 2019		2,228		(1,237)		991
Service costs		328		—		328
Interest expense		19		(11)		8
Employee contribution		—		(109)		(109)
Subtotal included in the statement of consolidated operations		347		(120)		227
Amounts paid/received		(22)		22		—
Return on assets (excluding interest expenses)		—		(2)		(2)
Actuarial gains and losses related to changes in demographic assumptions		—		—		—
Actuarial gains and losses related to changes in financial assumptions		172		—		172
Other actuarial gains (losses)		11		—		11
Experience effect		—		—		—
Subtotal included in other items of comprehensive income		182		(2)		180
Employer contributions		—		(109)		(109)
Currency translation effect		98		(52)		45
December 31, 2019		2,833		(1,498)		1,335
Service costs		257		—		257
Interest expense		4		(2)		2
Curtailment		(1,114)		564		(550)
Employee contribution		—		(66)		(66)
Subtotal included in the statement of the consolidated operations		(852)		496		(357)
Amounts paid/received		(46)		46		—
Return on assets (excluding interest expenses)		—		(9)		(9)
Actuarial gains and losses related to changes in demographic assumptions		—		—		—
Actuarial gains and losses related to changes in financial assumptions		—		—		—
Other actuarial gains (losses)		(41)		—		(41)
Experience effect		—		—		—

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 11: Employment benefit obligations (continued)

(amounts in thousands of euros)	Defined benefit plan obligation		Fair value of plan assets		Employee benefit obligations
Subtotal included in other items of comprehensive income		(41)		(9)		(50)
Employer contributions		—		(66)		(66)
Currency translation effect		24		(12)		12
September 30, 2020		1,918		(1,044)		874

The retirement obligation as of September 30, 2020 decreased from December 31, 2019 due to an employee leave and the transfer of an employee toward the French entity of the Group.

Sensitivity analysis as of September 30, 2020

(Amounts in € thousands)		Salary revaluation rate
Sensitivity analysis	0.50%	Assumptions: 1.00%	1.50%
Retirement obligation	1,879	1,918	1,958
		Discount rate
Sensitivity analysis	-0.30%	Assumptions: 0.20%	0.70%
Retirement obligation	2,190	1,918	1,691
		Pension inflation rate
Sensitivity analysis	0.00%	Assumptions: 0.50%	1.00%
Retirement obligation	1,803	1,918	2,045

Asset classes from the retirement plan and their respective allocations are as follows:

Allocation (in € thousands)	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Cash and cash equivalent		37		23
Bonds		840		599
Mortgage loans		228		143
Shares		259		34
Real estate		—		155
Other investments		133		90
Total		1,498		1,044

The full-year Group contributions for the 2020 retirement plan are estimated at €116 thousand.

The following table shows estimated benefit payments for the next years:

	2021			€105 thousand
	2022			€93 thousand
	2023			€82 thousand
	2024			€69 thousand
	2025–2029			€197 thousand

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 11: Employment benefit obligations (continued)

11.2 French employees

The main actuarial assumptions used to measure retirement indemnities are as follows:

ACTUARIAL ASSUMPTIONS	AS OF DECEMBER 31, 2019	AS OF SEPTEMBER 30, 2020
Age at retirement	Voluntary retirement age between 65 and 67
Collective bargaining agreement	Pharmaceutical industry
Discount rate
(IBOXX Corporates AA)	0.77%	0.59%
Mortality table	INSEE 2018	INSEE 2018
Salary revaluation rate	2.00%	2.00%
Turnover rate	20 years to 30 years old from 18.3% to 10.90% 31 years old to 40 years old from 10.4% to 6.3% 41 years old to 50 years old from 6% to 4.2% 51 years old to 60 years old from 3.9% to 1% 61 years old to 64 years old 1% Above 65 years nil
Social security expense ratio
Managers	47%	45%
Non-managers	47%	45%

The following shows the change in retirement provisions:

(amounts in thousands of euros)	Retirement obligation
As of January 1, 2019		5
Service costs		5
Interest expense		0
Actuarial gains and losses		3
As of December 31, 2019		13
Service costs		73
Interest expense		0
Actuarial gains and losses		(0)
As of September 30, 2020		86

Note 12: Provisions

In 2020, a tax control occurred in France over the fiscal years 2016, 2017 and 2018. The French Tax Authorities completed their audit in November 2020 and reassessed the research tax credit. Based on this reassessment the Company booked a provision totaling €258 thousand as of September 30, 2020. The related expense has been recognized in the consolidated income statement as an increase of the “Research and development expenses”.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 12: Provisions (continued)

Note 13: Tax and social liabilities

(amounts in thousands of euros)	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Bonus (including social security contributions)		17		417
Payroll & related accounts		190		309
Social security expenses		134		61
Other taxes and similar		128		21
Total tax and social liabilities		469		808

Note 14: Financial assets and liabilities and impacts on statements of consolidated operations

The Company’s financial assets and liabilities are measured as follows as of December 31, 2019 and September 30, 2020, respectively:

	AS OF DECEMBER 31, 2019
(amounts in thousands of euros)	Value– Statement of financial position				Value–Statement of financial position (IFRS 9)
(amounts in thousands of euros)	Value– Statement of financial position		Fair value		Fair value through profit or loss		Amortized cost
Non-current financial assets Level 1		29		29		—		29
Other current assets Level 1		1,349		1,349		—		1,349
Prepaid expenses Level 1		151		151				151
Cash and cash equivalents Level 1		2,417		2,417		2,417		—
Total assets		3,946		3,946		2,417		1,529
Non-current financial liabilities Level 1		17		17		—		17
Current financial liabilities Level 3 & level 1		912		912		725		186
Accounts payables Level 1		562		562		—		562
Other payables Level 1		512		512		—		512
Total liabilities		2,002		2,002		725		1,277

The Company’s financial instruments that are recognized at fair value through profit or loss are:

•

cash and cash equivalents which are classified as Level 1; and

•

derivative instruments in connection with convertible notes (see Note 10.2), which are classified as Level 3.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 14: Financial assets and liabilities and impacts on statements of consolidated operations (continued)

	AS OF SEPTEMBER 30, 2020
(amounts in thousands of euros)	Value– Statement of financial position				Value–Statement of financial position (IFRS 9)
(amounts in thousands of euros)	Value– Statement of financial position		Fair value		Fair value through profit or loss		Amortized cost
Non-current financial assets Level 1		36		36		—		36
Other current assets Level 1		668		668		—		668
Prepaid expenses Level 1		179		179				179
Cash and cash equivalents Level 1		3,590		3,590		3,590		—
Total assets		4,473		4,473		3,590		883
Non-current financial liabilities Level 1		63		63		—		63
Current financial liabilities Level 1		146		146		—		146
Accounts payables Level 1		656		656		—		656
Other payables Level 1		862		862		—		862
Total liabilities		1,727		1,727		—		1,727

The impact of the Company’s financial assets and liabilities on the consolidated income statement are as follows for the twelve-month period ended December 31, 2019 and for the nine-month period ended September 30, 2020:

	AS OF DECEMBER 31, 2019				AS OF SEPTEMBER 30, 2020
(amounts in thousands of euros)	Interest		Change in fair value		Interest		Change in fair value
Profit or loss impact of assets
Fair value through income/(loss)		—		—		—		—
Cash and cash equivalents		—		—		—		—
Profit or loss impact of liabilities
Financial debt at amortized cost (conditional advances)		1		—		—		—
Financial debt at amortized cost (lease liabilities)		5		—		3		—
Convertible bond at amortized cost		156		—		—		75
Derivative liability at fair value through profit or loss		—		(64)		—		(64)
Bonds at fair value through profit or loss		—		—		—		—

Note 15: Revenue

Following the signature of an extension to the license agreement for the Vaxiclase platform with the Serum Institute of India (SIIL) in June 2018, the contract provides for:

•

An initial payment of €750 thousand (recognized during the first half of 2018);

•

Milestone payments for emerging markets for up to USD 57 million;

•

Milestone payments for industrialized countries for up to €100 million.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 15: Revenue (continued)

In accordance with IFRS 15, the Group has reviewed the license agreement with the Serum Institute of India Pvt. Ltd. (SIIL) for the Vaxiclase platform. The Group considers that the license covered by the agreement constitutes a right of use (static license).

The agreement provides for four types of variable compensation:

•

Development milestone payments based on the progress of work undertaken by the customer;

•

Commercial milestone payments based on levels of total sales achieved by the customer;

•

Milestone payments in the event that the customer grants any sublicenses;

•

“Single digit percentage” royalties on sales.

The development milestone payments set out in the contract will be recognized when they become highly probable. Given that the various phases of the project progress at uncertain rates, the revenue associated with these milestone payments is recognized as of the date the customer achieves these development phases.

The other two types of milestone payments are related to sales and are treated as royalties. They will therefore be recognized as income when the sale is made.

As of September 30, 2020, other income of €35 thousand (nil in 2019) was recognized relating to the license contract agreement with SIIL. It mainly involves the re-invoicing of fees for patent maintenance costs.

Note 16: Details of expenses and products by function

16.1 Research and Development expenses

(amounts in thousands of euros)	DECEMBER 31, 2019 12 months		SEPTEMBER 30, 2020 9 months
Raw materials and consumables		(83)		(19)
Research and studies		(3,158)		(1,281)
Personnel expenses		(1,277)		(1,315)
Expenses related to retirement obligations		(84)		147
Licenses and intellectual property costs		(722)		(388)
Depreciation and amortization		(581)		(690)
Share-based payments		(258)		(129)
Miscellaneous		(44)		(22)
Amortization of rights of use		(98)		(71)
Impairment of SIIL contract		—		(5,859)
Research and development expenses		(6,305)		(9,627)
Research tax credit		899		356
Subsidies		—		—
Research tax credit and subsidies		899		356
Research and development expenses, net		(5,406)		(9,271)

Net research and development expenses amounted to €9,271 thousand for the nine-month period ended September 30, 2020, compared with €5,406 thousand for the twelve-month period ended December 31, 2019, i.e., an increase of €3,865 thousand. This decrease can be explained primarily by a reduction in the

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 16: Details of expenses and products by function (continued)

study and research costs associated with the end of the Phase 2 trial of its GKT831 product offset by the impairment recorded on the SIIL contract (refer to note 3).

16.2 General and administrative expenses

(amounts in thousands of euros)	DECEMBER 31, 2019 12 months		SEPTEMBER 30, 2020 9 months
Travel and incidental expenses		(208)		(56)
Fees		(889)		(874)
Insurance		(35)		(44)
Marketing and sales expenditure		(89)		(130)
Taxes and duties		(29)		(18)
Personnel expenses		(411)		(504)
Expenses related to retirement obligations		(39)		203
Attendance fees		(49)		(60)
Depreciation and amortization		(3)		(1)
Share-based payments		(226)		(142)
Miscellaneous		(150)		(99)
Amortization of rights of use		(33)		(32)
General and administrative expenses		(2,160)		(1,757)

General and administrative expenses amounted to €1,757 thousand for the nine-month period ended September 30, 2020 compared with €2,160 thousand for the twelve-month period ended December 31, 2019, i.e., a decrease of €404 thousand. This change can be explained primarily by the following:

•

A decrease in travel expenses of €152 thousand

•

A reduction of €242 thousand in expenses related to retirement obligations in relation to a curtailment gain

•

Compensated by an increase of personnel expenses of €93 thousand.

Note 17: Net financial income and expenses

(amounts in thousands of euros)	DECEMBER 31, 2019 12 months		SEPTEMBER 30, 2020 9 months
Convertible bonds effective interest expenses		(156)		(75)
Other financial expenses		(7)		(3)
Currency losses		(27)		(23)
Financial expenses		(190)		(101)
Currency gains		348		12
Derivative liabilities (change in fair value)		64		64
Total net financial expense		222		(25)

Gains and losses on currency translation for the twelve-month period ended December 31, 2019 and for the nine-month period ended September 30, 2020 primarily represent the impact of fluctuations in the CHF/EUR exchange rate on the intragroup accounts of Genkyotex Suisse SA with Genkyotex SA.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 18: Income taxes

Genkyotex SA had tax losses in France that can be carried forward indefinitely totaling €93,345 thousand as of September 30, 2020.

The tax rate on applicable income for Genkyotex SA is the rate that is currently applicable in France (28%). This rate will gradually decrease to reach 25% by 2022.

Genkyotex Suisse SA had approximately €66,417 thousand (CHF 70,934 thousand) in tax loss carryforwards as of September 30, 2020, which break down as follows:

•

€5,257 thousand (CHF 5,706 thousand) originating in 2019 and expiring in 2027,

•

€9,941 thousand (CHF 10,790 thousand) originating in 2018 and expiring in 2026,

•

€3,478 thousand (CHF 3,775 thousand) originating in 2017 and expiring in 2025,

•

€11,848 thousand (CHF 12,860 thousand) originating in 2015 and expiring in 2023,

•

€14,285 thousand (CHF 15,505 thousand) originating in 2014 and expiring in 2022,

•

€12,416 thousand (CHF 13,476 thousand) originating in 2013 and expiring in 2021,

•

€4,665 thousand (CHF 5,063 thousand) originating in 2012 and expiring in 2020.

The tax rate applicable on income for Genkyotex Suisse SA is the rate that is currently applicable in the Swiss Canton of Geneva (24%).

In accordance with the principles described above, no deferred tax assets have been recognized beyond deferred tax liabilities in the Group’s consolidated financial statements as of September 30, 2020 and December 31, 2019.

Genkyotex SA was the subject of a tax audit covering the financial years 2016 to 2018 (refer to note 12).

Reconciliation between the theoretical tax expense and effective tax

TAX PROOF (amounts in thousands of euros)	DECEMBER 31, 2019 12 months		SEPTEMBER 30, 2020 9 months
Net loss		(7,203)		(11,017)
Income taxes		—		—
Loss before taxes		(7,203)		(11,017)
Current tax rate in Switzerland		24.00%		24.00%
Theoretical income tax (expense) benefit		1,729		2,644
Non-taxable items		105		(1,696)
Share based payments		(135)		(76)
Unrecognized deferred tax		(1,777)		(1,189)
Effect of tax rate differences		78		316
Group income taxes (expense) benefit		0		0
Effective tax rate		0.00%		0.00%

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 18: Income taxes (continued)

Nature of deferred tax

(amounts in thousands of euros)	AS OF DECEMBER 31, 2019		AS OF SEPTEMBER 30, 2020
Retirement		297		218
Other		4		5
Total items with a deferred tax asset nature		301		223
Unrecognized deferred tax assets		(301)		(223)
Deferred taxes, net		—		—

Note 19: Earnings (loss) per share

	DECEMBER 31, 2019 12 months		SEPTEMBER 30, 2020 9 months
Weighted average number of outstanding shares		8,146,178		11,160,072
Net loss (in thousands of euros)		(7,203)		(11,017)
Basic loss per share (€/share)		(0.88)		(0.99)
Diluted loss per share (€/share)		(0.88)		(0.99)

Note 20: Related Parties

20.1 Compensation due to executive officers

Executive compensation breaks down as follow:

(amounts in thousands of euros)	DECEMBER 31, 2019 12 months		SEPTEMBER 30, 2020 9 months
Fixed compensation		221		177
Variable compensation		—		150
Benefits in kind		20		10
Employer contributions to the retirement plan		29		17
Share-based payments		232		130
Attendance fees		49		60
Total compensation of executive officers		551		543

No post-employment benefits were granted to members of the Board of Directors or to executives, with the exception of the mandatory defined benefit plan applicable for Swiss employees under the 2nd pillar of the Swiss social security system.

The variable components of compensation were allocated on the basis of performance criteria.

The methods used to calculate the fair value of share-based payments are explained in Note 9.

Note 21: Off-balance-sheet commitments

21.1 Guarantee

A bank guarantee for €22 thousand (CHF 24 thousand) was provided to the landlord of the Plan-les-Ouates premises.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 21: Off-balance-sheet commitments (continued)

21.2 Contractual obligations

21.2.1 Licensing agreement with the Institut Pasteur

Genkyotex SA signed a license agreement with the Institut Pasteur that takes effect on January 1, 2018 and replaces the first agreement signed on February 22, 2006.

The new agreement provides for:

•

royalties on net proceeds by the Company, categorized by human use and by veterinary use (lack of revenue generated by the Company under the agreement);

•

a share in the cost of maintaining the patents: the Institut Pasteur is responsible for obtaining the issuance and assuring the continuing validity of patents. However, the Company will reimburse the Institut Pasteur for all of the direct external expenses incurred by the Institut Pasteur to maintain and extend the patents (€22 thousand for 2020 and €22 thousand for 2019);

•

a royalty in the case of sublicensing (to date, the Company has not signed this type of agreement).

21.3 Other commitments

The first-time application of IFRS 16 as from January 1, 2019 has removed the distinction between finance leases and operating leases. The standard means that the Company’s obligation to pay future lease payments must be recognized as a liability and a right of use as an asset.

As a result of the impact of IFRS 16, the current off-balance sheet commitments in connection with leases as of September 30, 2020 are deemed to be immaterial.

Note 22: Management and assessment of financial risks

Genkyotex SA may find itself exposed to various types of financial risk: market risk, credit risk and liquidity risk. When necessary, Genkyotex SA implements simple measures proportional to its size to minimize the potential adverse effects of those risks on its financial performance.

It is Genkyotex SA’s policy not to use financial instruments for speculative purposes.

Market risk

Interest rate risk

Genkyotex SA is not significantly exposed to interest rate risk, to the extent that no variable rate debt has been obtained.

Foreign exchange risk

The main risks related to the impact of foreign exchange rates are considered insignificant, except for the SIIL contract where some milestone revenue and royalties are denominated in US dollars (see Note 2.6).

The Company, at its present stage of development, does not use hedging instruments to protect its activity from exchange rate fluctuations. However, the Company cannot rule out the possibility that a major increase in its activity will increase its exposure to exchange rate risk. In such a case, the Company would consider adopting an appropriate policy to hedge such risks.

As of December 31, 2020, assets and liabilities in foreign currencies are not significant.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of euros unless otherwise noted, except for share data)

Note 22: Management and assessment of financial risks (continued)

Credit risk

Credit risk is associated with deposits with banks and financial institutions. For its cash investments, Genkyotex SA uses top-tier financial institutions and therefore does not carry significant credit risk on its cash.

Liquidity risk

The Company’s going concern depends on the support of its controlling shareholder, Calliditas Therapeutics AB. (refer to Note 2.1).

The maturity of the financial liabilities as at September 30, 2020 can be analyzed as follows:

(amounts in thousands of euros)	Value– Statement of financial position				Non current
(amounts in thousands of euros)	Value– Statement of financial position		Current < 1 year		1 to 5 years		>5 years
Non-current financial liabilities		63		—		63		—
Current financial liabilities		146		146		—		—
Accounts payables		656		656		—		—
Other payables		862		862		—		—
Total liabilities		1,727		1,664		63		—

Note 23: Subsequent events

Setanaxib

Setanaxib (the lead product candidate of the Company or GKT831) has been designated as an orphan drug (ODD—Orphan Drug Designation) for the treatment of primary biliary cholangitis (PBC) by the Food and Drug Administration (“FDA”) in October 2020 and by the European Commission in December 2020.

Acquisition by Calliditas Therapeutics

On November 3, 2020, Genkyotex announced the completion of the acquisition by the company Calliditas Therapeutics AB of 62.7% of the shares of Genkyotex in an off-market transaction.

Following the transaction, all members of the Board of Directors resigned, other than Elias Papatheodorou, the Chief Executive Officer of Genkyotex.

M. Elmar Schnee, Chairman of the Board of Directors of Calliditas Therapeutics, Ms. Renée Aguiar-Lucander, Chief Executive Officer of Calliditas Therapeutics and M. Jonathan Schur, Group General Counsel, were co-opted as members of the Board of Directors. M. Elmar Schnee was elected President of the Board of Directors of Genkyotex.

Following the closing of the acquisition by Calliditas Therapeutics of a controlling interest of 62.7% in Genkyotex SA in November 2020, the stock option012018, stock option092018 and stock option032019 were waived by current employees. The vesting of the stock option062020 has been accelerated and all stock option062020 have been exercised. Two former employees agreed to waive their stock options012018 and stock option032019 in case of a squeeze out subsequent to a tender offer.

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Common Shares

Common Shares Represented by American Depositary Shares

Debt Securities

Warrants

Units

PROSPECTUS

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PART II — INFORMATION NOT REQUIRED IN PROSPECTUS

Item 8.

Indemnification of Directors and Officers.

Under Swedish law, a company may indemnify its directors and officers against personal liability that they may incur whilst performing their duties, which is most commonly made through purchase of Directors’ and Officers’ Liability Insurance. Although there is no statutory obligation to provide such indemnification or insurance coverage, it is rather common for at least mid-sized and larger companies to provide Directors’ and Officers’ Liability Insurance which gives the directors and officers insurance coverage for any personal liability. The insurance covers (e.g.) attorney’s fees and other legal costs as well as any damages that the directors or officers may be found liable to pay. However, the insurance does not, as a main rule, provide protection against, inter alia, actions undertaken with gross negligent or willful misconduct or civil or criminal fines or imprisonments.

The registrant’s articles of association do not contain provisions regarding the indemnification of directors and officers. However, it is nonetheless possible for the company to provide Directors’ and Officers’ Liability Insurance, which provides protection against losses and expenses incurred by the director or officer in the execution of the duties under an employment agreement or law, with the exceptions mentioned above.

We currently maintain Directors’ and Officers’ Liability Insurance for our directors and officers as well as officers and directors of our subsidiaries.

Insofar as indemnification of liabilities arising under the Securities Act may be permitted to our board of directors, executive officers, or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable

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Item 9.

Exhibits

EXHIBIT INDEX

Exhibit No.			Description
1.1*			Underwriting Agreement.
3.1			Articles of Association of Calliditas Therapeutics AB.
4.1			Form of Deposit Agreement between Calliditas Therapeutics AB, Citibank, N.A., as Depositary Bank, and the Holders and Beneficial Owners from time to time of American Depositary Shares issued thereunder; incorporated by reference to exhibit 4.1 to the Registration Statement on Form F-1/A filed with the SEC on June 1, 2020 with respect to ADSs representing common shares.
4.2			Form of American Depository Receipt (included in Exhibit 4.1 to the Registration Statement on Form F-1/A filed by the Registrant with the SEC on June 1, 2020).
4.3			Form of Senior Indenture.
4.4			Form of Subordinated Indenture.
4.5*			Form of Debt Securities.
4.6*			Form of Warrant Agreement and Warrant Certificate.
4.7*			Form of Unit Agreement and Unit Certificate.
5.1			Opinion of Advokatfirman Vinge, Swedish counsel to the Registrant.
5.2			Opinion of Goodwin Procter LLP, U.S. counsel to Registrant.
23.1			Consent of Ernst & Young AB, independent registered public accounting firm.
23.2			Consent of KPMG S.A., independent auditors.
23.3			Consent of Advokatfirman Vinge (included in Exhibit 5.1).
23.4			Consent of Goodwin Procter LLP (included in Exhibit 5.2).
24.1			Power of Attorney (included in signature page).
25.1*			Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the trustee, as trustee under the indenture filed herewith.

To be filed, if applicable, by amendment or incorporated by reference pursuant to a report on Form 6-K.

Item 10.

Undertakings.

(a)

The undersigned Registrant hereby undertakes:

(1)

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

ii.

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

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iii.

To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and a(l)(iii) do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

(2)

That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)

To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.

(5)

That, for the purpose of determining liability under the Securities Act to any purchaser:

If the Registrant is relying on Rule 430B:

(A)

Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(B)

Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus

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that was part of the registration statement or made in any such document immediately prior to such effective date.

ii.

If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(6)

That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

ii.

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned Registrant;

iii.

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned Registrant; and

iv.

Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

(b)

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)

The undersigned Registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

(d)

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 8 hereof, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore,

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unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(e)

The undersigned Registrant hereby undertakes that:

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this Registration Statement as of the time it was declared effective.

ii.

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(f)

The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act (the “Act”) in accordance with the rules and regulations prescribed by the SEC under section 305(b)(2) of the Act.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Stockholm, Sweden on this 12th day of July, 2021.

				CALLIDITAS THERAPEUTICS AB
				By:			/s/ Renée Aguiar-Lucander Renée Aguiar-Lucander Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned directors, officers and/or authorized representative in the United States of Calliditas Therapeutics AB, hereby severally constitute and appoint Renée Aguiar-Lucander and Fredrik Johansson, and each of them singly, our true and lawful attorneys-in-fact and agents, with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the registration statement on Form S-8 filed herewith, and any and all pre-effective and post-effective amendments to said registration statement, under the Securities Act of 1933, as amended, in connection with the registration under the Securities Act of 1933, as amended, of equity securities of Calliditas Therapeutics AB, and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as each of them might or could do in person, and hereby ratifying and confirming all that said attorneys-in fact and agents, and each of them, or their substitute or substitutes, shall do or cause to be done by virtue of this Power of Attorney. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following person in the capacities and on the date indicated.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Renée Aguiar-Lucander Renée Aguiar-Lucander	Chief Executive Officer (Principal Executive Officer)	July 12, 2021
/s/ Fredrik Johansson Fredrik Johansson	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	July 12, 2021
/s/ Elmar Schnee Elmar Schnee	Chairman of the Board of Directors	July 12, 2021
/s/ Hilde Furberg Hilde Furberg	Director	July 12, 2021
/s/ Lennart Hansson, Ph.D. Lennart Hansson, Ph.D.	Director	July 12, 2021

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Signature	Title	Date
/s/ Diane Parks Diane Parks	Director	July 12, 2021
/s/ Molly Henderson Molly Henderson	Director	July 12, 2021

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SIGNATURE OF AUTHORIZED U.S. REPRESENTATIVE OF REGISTRANT

Pursuant to the requirements of the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of the registrant has signed this registration statement, on July 12, 2021.

By:

/s/ Andrew Udell

Calliditas NA Enterprises Inc.
By: Andrew Udell
Title: President

Authorized Representative in the United States

Exhibit 3.1

Articles of Association of Calliditas Therapeutics AB. Reg. no. 556659-9766.

Adopted at the annual general meeting held on 27 May 2021.

1 § Name of company

The name of the company is Calliditas Therapeutics AB. The Company is a public company (publ).

2 § Registered office of the company

The registered office of the company is situated in Stockholm, Sweden.

3 § Objects of the company

The company shall, directly or through subsidiaries, conduct research and development as well as the manufacture and sale of pharmaceuticals and medical devices, own and manage shares and other securities as well as other movable and immovable property, as well as business associated therewith.

4 § Share capital and number of shares

The share capital shall be not less than SEK 710,000 and not more than SEK 2,840,000. The number of shares shall be not less than 17,750,000 and not more than 71,000,000.

5 § Board of directors

The board of directors elected by the shareholders’ meeting shall comprise not less than three (3) and not more than ten (10) members.

6 § Auditors

The company shall have one or two (1–2) auditors and not more than two (2) alternate auditors or a registered accounting firm.

7 § Notice to attend shareholders’ meetings

Notice of shareholders’ meetings shall be published in the Swedish Official Gazette and on the company’s website, within such time as set forth in the Swedish Companies Act (2005:551). It shall be announced in Svenska Dagbladet that a notice has been issued.

8 § Participation at shareholders’ meetings

Shareholders who wish to participate at a shareholders’ meeting shall be registered as shareholders on a transcript of the entire share register as stipulated in Chapter 7, Section 28, third paragraph of the Swedish Companies Act (2005:551) and shall also provide notification of their intention to attend the meeting no later than on the date stipulated in the notice convening the shareholders’ meeting. The latter mentioned day must not be a Sunday, any other public holiday, Saturday, Midsummer’s Eve, Christmas Eve or New Year’s Eve and must not be more than the fifth weekday prior to the meeting. If a shareholder wishes to be joined by proxy (not more than two proxies) at the shareholders’ meeting, the number of proxies must be stated in the notice of participation.

9 § Collection of power of attorneys and postal voting

The board of directors may collect powers of attorney in accordance with the procedure described in Chapter 7, Section 4, second paragraph of the Swedish Companies Act (2005:551).

The board of directors has the right before a shareholders’ meeting to decide that shareholders shall be able to exercise their right to vote by post before the shareholders’ meeting.

10 § Matters at annual shareholders’ meetings

The annual shareholders’ meeting is held each year within six months of the end of the financial year.

The following matters shall be addressed at annual shareholders’ meetings:

	1.	Election of a chairman of the meeting;
	2.	Preparation and approval of the voting register;
	3.	Approval of the agenda;
	4.	Election of one or two persons to attest the minutes;
	5.	Determination of whether the meeting was duly convened;
	6.	Presentation of the annual report and auditor’s report and, where applicable, the consolidated financial statements and auditor’s report for the group;
	7.	Resolutions regarding

	a.	adoption of the income statement and balance sheet and, where applicable, the consolidated income statement and consolidated balance sheet;
	b.	allocation of the company’s profit or loss according to the adopted balance sheet;
	c.	discharge from liability for board members and the managing director;

	8.	Determination of fees for the board of directors and the auditors;
	9.	Election of the board of directors and accounting firm or auditors;
	10.	Any other business incumbent on the meeting according to the Companies Act or the articles of association.

11 § Financial year

The company’s financial year shall be the calendar year.

12 § Euroclear company

The company’s shares shall be registered in a securities register in accordance with the Swedish Securities Register and Financial Instruments Accounts Act (1998:1479).

13 § US forum

Without any infringement on Swedish forum provisions and without applying Chapter 7, Section 54 of the Swedish Companies Act (2005:551), the United States District Court for the Southern District of New York shall be the sole and exclusive forum for resolving any complaint filed in the United States asserting a cause of action arising under the U.S. Securities Act of 1933, as amended, unless the Company consents in writing to the selection of an alternative forum.

Exhibit 4.3

CALLIDITAS THERAPEUTICS AB
Issuer

AND

,
as Trustee

INDENTURE

Dated as of ,

Senior Debt Securities

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		Page

Article 1 DEFINITIONS		1
Section 1.01 Definitions of Terms		1
Article 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES		5
Section 2.01 Designation and Terms of Securities		5
Section 2.02 Form of Securities and Trustee’s Certificate		8
Section 2.03 Denominations: Provisions for Payment		8
Section 2.04 Execution and Authentications		10
Section 2.05 Registration of Transfer and Exchange		10
Section 2.06 Temporary Securities		12
Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities		12
Section 2.08 Cancellation		13
Section 2.09 Benefits of Indenture		13
Section 2.10 Authenticating Agent		13
Section 2.11 Global Securities		14
Article 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS		15
Section 3.01 Redemption		15
Section 3.02 Notice of Redemption		15
Section 3.03 Payment Upon Redemption		16
Section 3.04 Sinking Fund		17
Section 3.05 Satisfaction of Sinking Fund Payments with Securities		17
Section 3.06 Redemption of Securities for Sinking Fund		17
Article 4 COVENANTS		18
Section 4.01 Payment of Principal, Premium and Interest		18
Section 4.02 Maintenance of Office or Agency		18
Section 4.03 Paying Agents		18
Section 4.04 Appointment to Fill Vacancy in Office of Trustee		19
Section 4.05 Compliance with Consolidation Provisions		20
Article 5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE		20
Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders		20

Section 5.02 Preservation Of Information; Communications With Securityholders		20
Section 5.03 Reports by the Company		21
Section 5.04 Reports by the Trustee		21
Article 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT		21
Section 6.01 Events of Default		21
Section 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee		23
Section 6.03 Application of Moneys Collected		25
Section 6.04 Limitation on Suits		25
Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver		26
Section 6.06 Control by Securityholders		26
Section 6.07 Undertaking to Pay Costs		27
Article 7 CONCERNING THE TRUSTEE		27
Section 7.01 Certain Duties and Responsibilities of Trustee		27
Section 7.02 Certain Rights of Trustee		28
Section 7.03 Trustee Not Responsible for Recitals or Issuance or Securities		30
Section 7.04 May Hold Securities		31
Section 7.05 Moneys Held in Trust		31
Section 7.06 Compensation and Reimbursement		31
Section 7.07 Reliance on Officer’s Certificate		32
Section 7.08 Disqualification; Conflicting Interests		32
Section 7.09 Corporate Trustee Required; Eligibility		32
Section 7.10 Resignation and Removal; Appointment of Successor		32
Section 7.11 Acceptance of Appointment By Successor		34
Section 7.12 Merger, Conversion, Consolidation or Succession to Business		35
Section 7.13 Preferential Collection of Claims Against the Company		35
Section 7.14 Notice of Default		35
Article 8 CONCERNING THE SECURITYHOLDERS		36
Section 8.01 Evidence of Action by Securityholders		36
Section 8.02 Proof of Execution by Securityholders		36
Section 8.03 Who May be Deemed Owners		37
Section 8.04 Certain Securities Owned by Company Disregarded		37
Section 8.05 Actions Binding on Future Securityholders		37

Article 9 SUPPLEMENTAL INDENTURES		38
Section 9.01 Supplemental Indentures Without the Consent of Securityholders		38
Section 9.02 Supplemental Indentures With Consent of Securityholders		39
Section 9.03 Effect of Supplemental Indentures		39
Section 9.04 Securities Affected by Supplemental Indentures		39
Section 9.05 Execution of Supplemental Indentures		40
Article 10 SUCCESSOR ENTITY		40
Section 10.01 Company May Consolidate, Etc..		40
Section 10.02 Successor Entity Substituted		41
Article 11 SATISFACTION AND DISCHARGE		42
Section 11.01 Satisfaction and Discharge of Indenture		42
Section 11.02 Discharge of Obligations		42
Section 11.03 Deposited Moneys to be Held in Trust		42
Section 11.04 Payment of Moneys Held by Paying Agents		42
Section 11.05 Repayment to Company		43
Article 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS		43
Section 12.01 01No Recourse		43
Article 13 MISCELLANEOUS PROVISIONS		44
Section 13.01 Effect on Successors and Assigns		44
Section 13.02 Actions by Successor		44
Section 13.03 Surrender of Company Powers		44
Section 13.04 Notices		44
Section 13.05 Governing Law		44
Section 13.06 Treatment of Securities as Debt		44
Section 13.07 Certificates and Opinions as to Conditions Precedent		45
Section 13.08 Payments on Business Days		45
Section 13.09 Conflict with Trust Indenture Act		45
Section 13.10 Counterparts		45
Section 13.11 Separability		45
Section 13.12 Compliance Certificates		46

(1) This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

iii

INDENTURE

INDENTURE, dated as of , among CALLIDITAS THERAPEUTICS AB, a Swedish public limited liability company (the “Company”), and , as trustee (the “Trustee”):

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of debt securities (hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;

WHEREAS, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and

WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders of Securities:

Article 1

DEFINITIONS

Section 1.01 Definitions of Terms.

The terms defined in this Section (except as in this Indenture or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this instrument.

“Authenticating Agent” means an authenticating agent with respect to all or any of the series of Securities appointed by the Trustee pursuant to Section 2.10.

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

“Board of Directors” means the Board of Directors (or the functional equivalent thereof) of the Company or any duly authorized committee of such Board.

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.

“Business Day” means, with respect to any series of Securities, any day other than a day on which federal or state banking institutions in the Borough of Manhattan, the City of New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law, executive order or regulation to close.

“Certificate” means a certificate signed by any Officer. The Certificate need not comply with the provisions of Section 13.07.

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“Company” means Calliditas Therapeutics AB, a public limited liability company duly organized and existing under the laws of Sweden, and, subject to the provisions of Article Ten, shall also include its successors and assigns.

“Corporate Trust Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at .

“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

“Defaulted Interest” has the meaning set forth in Section 2.03.

“Depositary” means, with respect to Securities of any series for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company, another clearing agency, or any successor registered as a clearing agency under the Exchange Act, or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or 2.11.

“Event of Default” means, with respect to Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.

“Exchange Act” means the United States Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

“Global Security” means a Security issued to evidence all or a part of any series of Securities which is executed by the Company and authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee.

“Governmental Obligations” means securities that are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are not callable or redeemable at the option of the issuer thereof at any time prior to the stated maturity of the Securities, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.

“herein”, “hereof” and “hereunder”, and other words of similar import, refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance with the terms hereof and shall include the terms of particular series of Securities established as contemplated by Section 2.01.

“Interest Payment Date”, when used with respect to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect to Securities of that series is due and payable.

“Officer” means, with respect to the Company, the chairman of the Board of Directors, a chief executive officer, a president, a chief financial officer, a chief operating officer, any executive vice president, any senior vice president, any vice president, the treasurer or any assistant treasurer, the controller or any assistant controller or the secretary or any assistant secretary.

“Officer’s Certificate” means a certificate signed by any Officer. Each such certificate shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof.

“Opinion of Counsel” means an opinion in writing subject to customary exceptions of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof.

“Outstanding”, when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article Three, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.

“Person” means any individual, corporation, partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated organization, any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.

“Responsible Officer” when used with respect to the Trustee means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters with respect to this Indenture (which, for the avoidance of doubt, includes without limitation any supplemental indenture hereto).

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

“Securityholder”, “holder of Securities”, “registered holder”, or other similar term, means the Person or Persons in whose name or names a particular Security is registered on the Security Register kept for that purpose in accordance with the terms of this Indenture.

“Security Register” and “Security Registrar” shall have the meanings as set forth in Section 2.05.

“Subsidiary” means, with respect to any Person:

(1) any corporation or company a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is, at the date of determination, directly or indirectly, owned by such Person (a “subsidiary”), by one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person;

(2) a partnership in which such Person or a subsidiary of such Person is, at the date of determination, a general partner of such partnership; or

(3) any partnership, limited liability company or other Person in which such Person, a subsidiary of such Person or such Person and one or more subsidiaries of such Person, directly or indirectly, at the date of determination, have (x) at least a majority ownership interest or (y) the power to elect or appoint or direct the election or appointment of the managing partner or member of such Person or, if applicable, a majority of the directors or other governing body of such Person.

“Trustee” means , and, subject to the provisions of Article Seven, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee” as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

Article 2

ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES

Section 2.01 Designation and Terms of Securities.

(1) The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series, there shall be established in or pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures supplemental hereto:

(a) the title of the Securities of the series (which shall distinguish the Securities of that series from all other Securities);

(b) any limit upon the aggregate principal amount of the Securities of that series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);

(d) if the price (expressed as a percentage of the aggregate principal amount thereof) at which such Securities will be issued is a price other than the principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof, or if applicable, the portion of the principal amount of such Securities that is convertible into another security or the method by which any such portion shall be determined;

(e) the rate or rates at which the Securities of the series shall bear interest or the manner of calculation of such rate or rates, if any;

(f) the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment Dates, the place(s) of payment, and the record date for the determination of holders to whom interest is payable on any such Interest Payment Dates or the manner of determination of such record dates;

(g) the right, if any, to extend the interest payment periods and the duration of such extension;

(h) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, converted or exchanged, in whole or in part;

(i) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund, mandatory redemption, or analogous provisions (including payments made in cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

(j) the form of the Securities of the series including the form of the Certificate of Authentication for such series;

(k) if other than denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;

(l) any and all other terms (including terms, to the extent applicable, relating to any auction or remarketing of the Securities of that series and any security for the obligations of the Company with respect to such Securities) with respect to such series (which terms shall not be inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that series;

(m) whether the Securities of the series shall be issued in whole or in part in the form of a Global Security or Securities; the terms and conditions, if any, upon which such Global Security or Securities may be exchanged in whole or in part for other individual Securities; and the Depositary for such Global Security or Securities;

(n) whether the Securities will be convertible into or exchangeable for shares of common stock, preferred stock or other securities of the Company or any other Person and, if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will be calculated and may be adjusted, any mandatory or optional (at the Company’s option or the holders’ option) conversion or exchange features, and the applicable conversion or exchange period;

(o) if other than the full principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01;

(p) any additional or alternative events of default;

(q) additional or alternative covenants (which may include, among other restrictions, restrictions on the Company’s ability or the ability of the Company’s Subsidiaries to: incur additional indebtedness; issue additional securities; create liens; pay dividends or make distributions in respect of the capital stock of the Company or the Company’s Subsidiaries; redeem capital stock; place restrictions on the Company’s Subsidiaries’ ability to pay dividends, make distributions or transfer assets; make investments or other restricted payments; sell or otherwise dispose of assets; enter into sale-leaseback transactions; engage in transactions with stockholders or affiliates; issue or sell stock of the Company’s Subsidiaries; or effect a consolidation or merger) or financial covenants (which may include, among other financial covenants, financial covenants that require the Company and its Subsidiaries to maintain specified interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios) provided for with respect to the Securities of the series;

(r) the currency or currencies, including composite currencies, in which payment of the principal of (and premium, if any) and interest, if any, on such Securities shall be payable (if other than the currency of the United States of America), which unless otherwise specified shall be the currency of the United States of America as at the time of payment is legal tender for payment of public or private debts;

(s) if the principal of (and premium, if any) or interest, if any, on such Securities is to be payable, at the election of the Company or any Holder thereof, in a coin or currency other than that in which such Securities are stated to be payable, then the period or periods within which, and the terms and conditions upon which, such election may be made;

(t) whether interest will be payable in cash or additional Securities at the Company’s or the Securityholders’ option and the terms and conditions upon which the election may be made;

(u) the terms and conditions, if any, upon which the Company shall pay amounts in addition to the stated interest, premium, if any and principal amounts of the Securities of the series to any Securityholder that is not a “United States person” for federal tax purposes;

(v) additional or alternative provisions, if any, related to defeasance and discharge of the offered Securities;

(w) the applicability of any guarantees;

(x) any restrictions on transfer, sale or assignment of the Securities of the series; and

(y)           any other terms of the series.

All Securities of any one series shall be substantially identical except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures supplemental hereto.

If any of the terms of the series are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the secretary or an assistant secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate of the Company setting forth the terms of the series.

Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption dates.

Section 2.02 Form of Securities and Trustee’s Certificate.

The Securities of any series and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in a Board Resolution, and set forth in an Officer’s Certificate, and they may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which Securities of that series may be listed, or to conform to usage.

Section 2.03 Denominations: Provisions for Payment.

The Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(1)(j). The Securities of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. Subject to Section 2.01(1)(p), the principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency of the Company maintained for that purpose. Each Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day months.

The interest installment on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment. In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security as provided in Section 3.03.

Any interest on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:

(1) The Company may make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Security Register (as hereinafter defined), not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such special record date.

(2) The Company may make payment of any Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Unless otherwise set forth in a Board Resolution or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record date” as used in this Section with respect to a series of Securities and any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the first day of the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day.

Subject to the foregoing provisions of this Section, each Security of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.

Section 2.04 Execution and Authentications.

The Securities shall be signed on behalf of the Company by one of its Officers. Signatures may be in the form of a manual or facsimile signature.

The Company may use the facsimile signature of any Person who shall have been an Officer, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such Person shall have ceased to be such an officer of the Company. The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication by the Trustee.

A Security shall not be valid until authenticated manually by an authorized signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities, signed by an Officer, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.

In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, if requested, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Indenture.

The Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.

Section 2.05 Registration of Transfer and Exchange.

(1) Securities of any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose, for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding.

(2) The Company shall keep, or cause to be kept, at its office or agency designated for such purpose a register or registers (herein referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).

Upon surrender for transfer of any Security at the office or agency of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like aggregate principal amount.

All Securities presented or surrendered for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered holder or by such holder’s duly authorized attorney in writing.

(3) Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures supplemental to this Indenture, no service charge shall be made for any exchange or registration of transfer of Securities, or issue of new Securities in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(2) and Section 9.04 not involving any transfer.

(4) The Company shall not be required (i) to issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close of business on the day of such mailing, nor (ii) to register the transfer of or exchange any Securities of any series or portions thereof called for redemption, other than the unredeemed portion of any such Securities being redeemed in part. The provisions of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among depositary participants or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Section 2.06 Temporary Securities.

Pending the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated for the purpose, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder.

Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities.

In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

In case any Security that has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.

Every replacement Security issued pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

Section 2.08 Cancellation.

All Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation.

Section 2.09 Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities.

Section 2.10 Authenticating Agent.

So long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business, and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by federal or state authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.

Section 2.11 Global Securities.

(1) If the Company shall establish pursuant to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series, (ii) shall be registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction and (iv) shall bear a legend substantially to the following effect: “Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary.”

(2) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or to a nominee of such successor Depositary.

(3) If at any time the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, or if an Event of Default has occurred and is continuing and the Company has received a request from the Depositary or from the Trustee, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company will execute, and subject to Section 2.04, the Trustee will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. In addition, the Company may at any time determine that the Securities of any series shall no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities of such series. In such event the Company will execute and, subject to Section 2.04, the Trustee, upon receipt of an Officer’s Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security pursuant to this Section 2.11(3) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such Securities are so registered.

Article 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

Section 3.01 Redemption.

The Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.

Section 3.02 Notice of Redemption.

(1) In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with any right the Company reserved for itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as they shall appear upon the Security Register, unless a shorter period is specified in the Securities to be redeemed. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with any such restriction.

Each such notice of redemption shall specify the date fixed for redemption and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of such Securities to be redeemed will be made at the office or agency of the Company, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, that from and after said date interest will cease to accrue and that the redemption is from a sinking fund, if such is the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in part shall specify the particular Securities to be so redeemed.

In case any Security is to be redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.

(2) If less than all the Securities of a series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice (unless a shorter notice shall be satisfactory to the Trustee) in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by an Officer, instruct the Trustee or any paying agent to call all or any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section.

Section 3.03 Payment Upon Redemption.

(1) If the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of such Securities on or after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series, together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date, the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record date pursuant to Section 2.03).

(2) Upon presentation of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.

Section 3.04 Sinking Fund.

The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

Section 3.05 Satisfaction of Sinking Fund Payments with Securities.

The Company (i) may deliver Outstanding Securities of a series and (ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

Section 3.06 Redemption of Securities for Sinking Fund.

Not less than 45 days prior to each sinking fund payment date for any series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officer’s Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03.

Article 4
COVENANTS

Section 4.01 Payment of Principal, Premium and Interest.

The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established with respect to such Securities. Payments of principal on the Securities may be made at the time provided herein and established with respect to such Securities by U.S. dollar check drawn on and mailed to the address of the Securityholder entitled thereto as such address shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire instructions to the Trustee no later than 15 days prior to the relevant payment date. Payments of interest on the Securities may be made at the time provided herein and established with respect to such Securities by U.S. dollar check mailed to the address of the Securityholder entitled thereto as such address shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire instructions in writing to the Security Registrar and the Trustee no later than 15 days prior to the relevant payment date.

Section 4.02 Maintenance of Office or Agency.

So long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency with respect to each such series and at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be presented for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed by any officer authorized to sign an Officer’s Certificate and delivered to the Trustee, designate some other office or agency for such purposes or any of them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. The Company initially appoints the Corporate Trust Office of the Trustee as its paying agent with respect to the Securities.

Section 4.03 Paying Agents.

(1) If the Company shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section:

(a)           that it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto;

(b)           that it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable;

(c)            that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and

(d)           that it will perform all other duties of paying agent as set forth in this Indenture.

(2) If the Company shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall have one or more paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act.

(3) Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying agent; and, upon such payment by the Company or any paying agent to the Trustee, the Company or such paying agent shall be released from all further liability with respect to such money.

Section 4.04 Appointment to Fill Vacancy in Office of Trustee.

The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.

Section 4.05 Compliance with Consolidation Provisions.

The Company will not, while any of the Securities remain Outstanding, consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or convey all or substantially all of its property to any other Person unless the provisions of Article Ten hereof are complied with.

Article 5

SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders.

The Company will furnish or cause to be furnished to the Trustee (a) within 15 days after each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar.

Section 5.02 Preservation Of Information; Communications With Securityholders.

(1) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as Security Registrar (if acting in such capacity).

(2) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

(3) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or under the Securities, and, in connection with any such communications, the Trustee shall satisfy its obligations under Section 312(b) of the Trust Indenture Act in accordance with the provisions of Section 312(b) of the Trust Indenture Act.

Section 5.03 Reports by the Company.

(1) The Company covenants and agrees to provide (which delivery may be via electronic mail) to the Trustee within 30 days, after the Company files the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Company is required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any materials for which the Company has sought and received confidential treatment by the Commission; and provided further, that so long as such filings by the Company are available on the Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR), or Interactive Data Electronic Applications (IDEA), or any successor system, such filings shall be deemed to have been filed with the Trustee for purposes hereof without any further action required by the Company; provided that an electronic link to such filing, together with an electronic notice of such filing have been sent to the Trustee. For the avoidance of doubt, a failure by the Company to file annual reports, information and other reports with the SEC within the time period prescribed thereof by the Commission shall not be deemed a breach of this Section 5.03.

(2) Delivery of reports, information and documents to the Trustee under Section 5.03 is for informational purposes only and the information and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein, or determinable from information contained therein including the Company’s compliance with any of their covenants thereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate).

Section 5.04 Reports by the Trustee.

(1) If required by Section 313(a) of the Trust Indenture Act, the Trustee, within sixty (60) days after each May 1, shall transmit by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register, a brief report dated as of such May 1, which complies with Section 313(a) of the Trust Indenture Act.

(2) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.

(3) A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each securities exchange upon which any Securities are listed (if so listed) and also with the Commission. The Company agrees to notify the Trustee when any Securities become listed on any securities exchange.

Article 6

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

Section 6.01 Events of Default.

(1) Whenever used herein with respect to Securities of a particular series, “Event of Default” means any one or more of the following events that has occurred and is continuing:

(a)            the Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;

(b)           the Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;

(c)            the Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the Securities of that series at the time Outstanding;

(d)           the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors; or

(e)            a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days.

(2) In each and every such case (other than an Event of Default specified in clause (4) or clause (5) above), unless the principal of all the Securities of that series shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders), may declare the principal of (and premium, if any, on) and accrued and unpaid interest on all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable. If an Event of Default specified in clause (4) or clause (5) above occurs, the principal of and accrued and unpaid interest on all the Securities of that series shall automatically be immediately due and payable without any declaration or other act on the part of the Trustee or the holders of the Securities.

(3) At any time after the principal of (and premium, if any, on) and accrued and unpaid interest on the Securities of that series shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium, if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest, at the rate per annum expressed in the Securities of that series to the date of such payment or deposit) and the amount payable to the Trustee under Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such series, other than the nonpayment of principal on (and premium, if any, on) and accrued and unpaid interest on Securities of that series that shall not have become due by their terms, shall have been remedied or waived as provided in Section 6.06.

No such rescission and annulment shall extend to or shall affect any subsequent default or impair any right consequent thereon.

(4) In case the Trustee shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken.

Section 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee.

(1) The Company covenants that (i) in case it shall default in the payment of any installment of interest on any of the Securities of a series, or in any payment required by any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such default shall have continued for a period of 90 days, or (ii) in case it shall default in the payment of the principal of (or premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the Securities of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06.

(2) If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity out of the property of the Company or other obligor upon the Securities of that series, wherever situated.

(3) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affecting the Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of such series allowed for the entire amount due and payable by the Company under the Indenture at the date of institution of such proceedings and for any additional amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.

(4) All rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities of that series, may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders of the Securities of such series.

In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in the Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

Section 6.03 Application of Moneys Collected.

Any moneys collected by the Trustee pursuant to this Article with respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon presentation of the Securities of that series, and notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:

FIRST: To the payment of reasonable costs and expenses of collection and of all amounts payable to the Trustee under Section 7.06;

SECOND: To the payment of the amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively; and

THIRD: To the payment of the remainder, if any, to the Company or any other Person lawfully entitled thereto.

Section 6.04 Limitation on Suits.

No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture or any Security to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, any Security or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; (iv) the Trustee for 90 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such 90 day period, the holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request.

Notwithstanding anything contained herein to the contrary or any other provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption, on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee, that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities of such series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.

(1) Except as otherwise provided in Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to such Securities.

(2) No delay or omission of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

Section 6.06 Control by Securityholders.

The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture or subject the Trustee in its sole discretion to personal liability. Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s duties under the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders not involved in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with the Trustee (in accordance with Section 6.01(3)). Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

Section 6.07 Undertaking to Pay Costs.

All parties to this Indenture agree, and each holder of any Securities by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.

Article 7
CONCERNING THE TRUSTEE

Section 7.01 Certain Duties and Responsibilities of Trustee.

(1) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

(2) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(a)            prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that may have occurred:

(A)          the duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(B)           in the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

(b)           the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

(c)            the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities of that series; and

(d)           none of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.

Section 7.02 Certain Rights of Trustee.

Except as otherwise provided in Section 7.01:

(1) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(2) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company by any authorized officer of the Company (unless other evidence in respect thereof is specifically prescribed herein);

(3) The Trustee may consult with counsel and the written advice of such counsel or, if requested, any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted hereunder in good faith and in reliance thereon;

Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been cured or waived), to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs;

(5) The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

(6) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of not less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand;

(7) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(8) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances;

(9) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; and

(10) The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (b) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions. If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default until the Trustee shall have received written notification in the manner set forth in this Indenture or a Responsible Officer of the Trustee shall have obtained actual knowledge.

Section 7.03 Trustee Not Responsible for Recitals or Issuance or Securities.

(1) The recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.

(2) The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.

The Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.

Section 7.04 May Hold Securities.

The Trustee or any paying agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying agent or Security Registrar.

Section 7.05 Moneys Held in Trust.

Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree with the Company to pay thereon.

Section 7.06 Compensation and Reimbursement.

(1) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as the Company and the Trustee may from time to time agree in writing, for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ), except any such expense, disbursement or advance as may arise from its negligence or bad faith and except as the Company and Trustee may from time to time agree in writing. The Company also covenants to indemnify the Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs and expenses of defending itself against any claim of liability in the premises.

(2) The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities.

(3) To ensure the Company’s payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all funds or property held or collected by the Trustee, except that held in trust to pay principal of or interest on particular Securities. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 6.01(1)(d) or (1)(e), the expenses (including the reasonable fees and expenses of its counsel) and the compensation for services in connection therewith are to constitute expenses of administration under any bankruptcy law. The provisions of this Section 7.06 shall survive the termination of this Indenture and the resignation or removal of the Trustee.

Section 7.07 Reliance on Officer’s Certificate.

Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture upon the faith thereof.

Section 7.08 Disqualification; Conflicting Interests.

If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

Section 7.09 Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial, or District of Columbia authority.

If such corporation or other Person publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation or other Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10.

Section 7.10 Resignation and Removal; Appointment of Successor.

(1) The Trustee or any successor hereafter appointed may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names and addresses appear upon the Security Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

(2) In case at any time any one of the following shall occur:

(a) the Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or Securities for at least six months; or

(b) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Securityholder; or

(c) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any such case, the Company may remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

(3) The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company.

(4) Any resignation or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.

(5) Any successor trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there shall be only one Trustee with respect to the Securities of any particular series.

Section 7.11 Acceptance of Appointment By Successor.

(1) In case of the appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers, and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by such retiring Trustee hereunder.

(2) In case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (ii) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor trustee relates.

(3) Upon request of any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

(4) No successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.

(5) Upon acceptance of appointment by a successor trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the Company fails to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be transmitted at the expense of the Company.

Section 7.12 Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, including the administration of the trust created by this Indenture, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

Section 7.13 Preferential Collection of Claims Against the Company.

The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.

Section 7.14 Notice of Default.

If any Event of Default occurs and is continuing and if such Event of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Event of Default within the earlier of 90 days after it occurs and 30 days after it is known to a Responsible Officer of the Trustee or written notice of it is received by the Trustee, unless such Event of Default has been cured; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Securityholders.

Article 8

CONCERNING THE SECURITYHOLDERS

Section 8.01 Evidence of Action by Securityholders.

Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in person or by agent or proxy appointed in writing.

If the Company shall solicit from the Securityholders of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by an Officer’s Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

Section 8.02 Proof of Execution by Securityholders.

Subject to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner:

(1) The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.

(2) The ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.

The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

Section 8.03 Who May be Deemed Owners.

Prior to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

Section 8.04 Certain Securities Owned by Company Disregarded.

In determining whether the holders of the requisite aggregate principal amount of Securities of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

Section 8.05 Actions Binding on Future Securityholders.

At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that series.

Article 9

SUPPLEMENTAL INDENTURES

Section 9.01 Supplemental Indentures Without the Consent of Securityholders.

In addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for one or more of the following purposes:

(1) to cure any ambiguity, defect, or inconsistency herein or in the Securities of any series;

(2) to comply with Article Ten;

(3) to provide for uncertificated Securities in addition to or in place of certificated Securities;

(4) to add to the covenants, restrictions, conditions or provisions relating to the Company for the benefit of the holders of all or any series of Securities (and if such covenants, restrictions, conditions or provisions are to be for the benefit of less than all series of Securities, stating that such covenants, restrictions, conditions or provisions are expressly being included solely for the benefit of such series), to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default, or to surrender any right or power herein conferred upon the Company;

(5) to add to, delete from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as herein set forth;

(6) to make any change that does not adversely affect the rights of any Securityholder in any material respect;

(7) to provide for the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the holders of any series of Securities;

(8) to evidence and provide for the acceptance of appointment hereunder by a successor trustee; or

(9) to comply with any requirements of the Commission or any successor in connection with the qualification of this Indenture under the Trust Indenture Act.

The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.

Section 9.02 Supplemental Indentures With Consent of Securityholders.

With the consent (evidenced as provided in Section 8.01) of the holders of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture or indentures at the time Outstanding, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby, (a) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture.

It shall not be necessary for the consent of the Securityholders of any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

Section 9.03 Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.04 Securities Affected by Supplemental Indentures.

Securities of any series affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements of any securities exchange upon which such series may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of that series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that series then Outstanding.

Section 9.05 Execution of Supplemental Indentures.

Upon the request of the Company, accompanied by its Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions of Section 7.01, shall receive an Officer’s Certificate or an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized or permitted by the terms of this Article and that all conditions precedent to the execution of the supplemental indenture have been complied with; provided, however, that such Officer’s Certificate or Opinion of Counsel need not be provided in connection with the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.

Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Company shall (or shall direct the Trustee to) transmit by mail, first class postage prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby as their names and addresses appear upon the Security Register. Any failure of the Company to mail, or cause the mailing of, such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

Article 10

SUCCESSOR ENTITY

Section 10.01 Company May Consolidate, Etc.

Nothing contained in this Indenture shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its successor or successors) authorized to acquire and operate the same; provided, however, (a) the Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all series in accordance with the terms of each series, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect) reasonably satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall have acquired such property and (b) in the event that the Securities of any series then Outstanding are convertible into or exchangeable for shares of common stock or other securities of the Company, such entity shall, by such supplemental indenture, make provision so that the Securityholders of Securities of that series shall thereafter be entitled to receive upon conversion or exchange of such Securities the number of securities or property to which a holder of the number of shares of common stock or other securities of the Company deliverable upon conversion or exchange of those Securities would have been entitled had such conversion or exchange occurred immediately prior to such consolidation, merger, sale, conveyance, transfer or other disposition.

Section 10.02 Successor Entity Substituted.

(1) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section 10.01 on all of the Securities of all series Outstanding, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.

(2) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

(3) Nothing contained in this Article shall require any action by the Company in the case of a consolidation or merger of any Person into the Company where the Company is the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property of any other Person (whether or not affiliated with the Company).

Article 11

SATISFACTION AND DISCHARGE

Section 11.01 Satisfaction and Discharge of Indenture.

If at any time: (a) the Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation (other than any Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07 and Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.

Section 11.02 Discharge of Obligations.

If at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series, then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.

Thereafter, Sections 7.06 and 11.05 shall survive.

Section 11.03 Deposited Moneys to be Held in Trust.

All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption of which such moneys or Governmental Obligations have been deposited with the Trustee.

Section 11.04 Payment of Moneys Held by Paying Agents.

In connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys or Governmental Obligations.

Section 11.05 Repayment to Company.

Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment of principal of or premium, if any, or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, or such other shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be repaid to the Company on May 31 of each year or upon the Company’s request or (if then held by the Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment shall thereafter, as a general creditor, look only to the Company for the payment thereof.

Article 12

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 12.01 No Recourse.

No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities.

Article 13

MISCELLANEOUS PROVISIONS

Section 13.01 Effect on Successors and Assigns.

All the covenants, stipulations, promises and agreements in this Indenture made by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

Section 13.02 Actions by Successor.

Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.

Section 13.03 Surrender of Company Powers.

The Company by instrument in writing executed by authority of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered shall terminate both as to the Company and as to any successor corporation.

Section 13.04 Notices.

Except as otherwise expressly provided herein, any notice, request or demand that by any provision of this Indenture is required or permitted to be given, made or served by the Trustee or by the holders of Securities or by any other Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Trustee), as follows: . Any notice, election, request or demand by the Company or any Securityholder or by any other Person pursuant to this Indenture to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.

Section 13.05 Governing Law.

This Indenture and each Security shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State, except to the extent that the Trust Indenture Act is applicable.

Section 13.06 Treatment of Securities as Debt.

It is intended that the Securities will be treated as indebtedness and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention.

Section 13.07 Certificates and Opinions as to Conditions Precedent.

(1) Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent provided for in this Indenture (other than the certificate to be delivered pursuant to Section 13.12) relating to the proposed action have been complied with and, if requested, an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.

(2) Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include (i) a statement that the Person making such certificate or opinion has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such Person, he has made such examination or investigation as is reasonably necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

Section 13.08 Payments on Business Days.

Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.

Section 13.09 Conflict with Trust Indenture Act.

If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

Section 13.10 Counterparts.

This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 13.11 Separability.

In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

Section 13.12 Compliance Certificates.

The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year during which any Securities of any series were outstanding, an officer’s certificate stating whether or not the signers know of any Event of Default that occurred during such fiscal year. Such certificate shall contain a certification from the principal executive officer, principal financial officer or principal accounting officer of the Company that a review has been conducted of the activities of the Company and the Company’s performance under this Indenture and that the Company has complied with all conditions and covenants under this Indenture. For purposes of this Section 13.12, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. If the officer of the Company signing such certificate has knowledge of such an Event of Default, the certificate shall describe any such Event of Default and its status.

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

	CALLIDITAS THERAPEUTICS AB


	By:

	Name:

	Title:

	, as Trustee


	By:

	Name:

	Title:

CROSS-REFERENCE TABLE (1)

Section of Trust Indenture Act of 1939, as Amended		Section of Indenture
310(a)		7.09
310(b)		7.08
		7.10
310(c)		Inapplicable
311(a)		7.13
311(b)		7.13
311(c)		Inapplicable
312(a)		5.01
		5.02(1)
312(b)		5.02(3)
312(c)		5.02(3)
313(a)		5.04(1)
313(b)		5.04(2)
313(c)		5.04(1)
		5.04(2)
313(d)		5.04(3)
314(a)		5.03 13.12
314(b)		Inapplicable
314(c)		13.07(1)
314(d)		Inapplicable
314(e)		13.07(2)
314(f)		Inapplicable

315(a)		7.01(1)
		7.01(2)
315(b)		7.14
315(c)		7.01
315(d)		7.01(2)
315(e)		6.07
316(a)		6.06
		8.04
316(b)		6.04
316(c)		8.01
317(a)		6.02
317(b)		4.03
318(a)		13.09

(1)

This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

Exhibit 4.4

CALLIDITAS THERAPEUTICS AB

Issuer

AND

as Trustee

INDENTURE

Dated as of ,

Subordinated Debt Securities

	TABLE OF CONTENTS
		Page

Article 1 DEFINITIONS		1
Section 1.01	Definitions of Terms	1
Article 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES		5
Section 2.01	Designation and Terms of Securities	5
Section 2.02	Form of Securities and Trustee’s Certificate	8
Section 2.03	Denominations: Provisions for Payment	8
Section 2.04	Execution and Authentications	10
Section 2.05	Registration of Transfer and Exchange	10
Section 2.06	Temporary Securities	12
Section 2.07	Mutilated, Destroyed, Lost or Stolen Securities	12
Section 2.08	Cancellation	13
Section 2.09	Benefits of Indenture	13
Section 2.10	Authenticating Agent	13
Section 2.11	Global Securities	14
Article 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS		15
Section 3.01	Redemption	15
Section 3.02	Notice of Redemption	15
Section 3.03	Payment Upon Redemption	16
Section 3.04	Sinking Fund	16
Section 3.05	Satisfaction of Sinking Fund Payments with Securities	17
Section 3.06	Redemption of Securities for Sinking Fund	17
Article 4 COVENANTS		17
Section 4.01	Payment of Principal, Premium and Interest	17
Section 4.02	Maintenance of Office or Agency	18
Section 4.03	Appointment to Fill Vacancy in Office of Trustee	19
Section 4.04	Compliance with Consolidation Provisions	19
Article 5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE		19
Section 5.01	Company to Furnish Trustee Names and Addresses of Securityholders	19
Section 5.02	Preservation Of Information; Communications With Securityholders	19
Section 5.03	Reports by the Company	20
Section 5.04	Reports by the Trustee	20
Article 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT		21
Section 6.01	Events of Default	21
Section 6.02	Collection of Indebtedness and Suits for Enforcement by Trustee	23

Section 6.03	Application of Moneys Collected	24
Section 6.04	Limitation on Suits	24
Section 6.05	Rights and Remedies Cumulative; Delay or Omission Not Waiver	25
Section 6.06	Control by Securityholders	25
Section 6.07	Undertaking to Pay Costs	26
Article 7 CONCERNING THE TRUSTEE		26
Section 7.01	Certain Duties and Responsibilities of Trustee	26
Section 7.02	Certain Rights of Trustee	28
Section 7.03	Trustee Not Responsible for Recitals or Issuance or Securities	29
Section 7.04	May Hold Securities	30
Section 7.05	Moneys Held in Trust	30
Section 7.06	Compensation and Reimbursement	30
Section 7.07	Reliance on Officer’s Certificate	31
Section 7.08	Disqualification; Conflicting Interests	31
Section 7.09	Corporate Trustee Required; Eligibility	31
Section 7.10	Resignation and Removal; Appointment of Successor	31
Section 7.11	Acceptance of Appointment By Successor	33
Section 7.12	Merger, Conversion, Consolidation or Succession to Business	34
Section 7.13	Preferential Collection of Claims Against the Company	34
Section 7.14	Notice of Default	34
Article 8 CONCERNING THE SECURITYHOLDERS		35
Section 8.01	Evidence of Action by Securityholders	35
Section 8.02	Proof of Execution by Securityholders	35
Section 8.03	Who May be Deemed Owners	35
Section 8.04	Certain Securities Owned by Company Disregarded	36
Section 8.05	Actions Binding on Future Securityholders	36
Article 9 SUPPLEMENTAL INDENTURES		36
Section 9.01	Supplemental Indentures Without the Consent of Securityholders	36
Section 9.02	Supplemental Indentures With Consent of Securityholders	37
Section 9.03	Effect of Supplemental Indentures	38
Section 9.04	Securities Affected by Supplemental Indentures	38
Section 9.05	Execution of Supplemental Indentures	38
Article 10 SUCCESSOR ENTITY		39
Section 10.01	Company May Consolidate, Etc	39
Section 10.02	Successor Entity Substituted	39
Article 11 SATISFACTION AND DISCHARGE		40
Section 11.01	Satisfaction and Discharge of Indenture	40
Section 11.02	Discharge of Obligations	40
Section 11.03	Deposited Moneys to be Held in Trust	41
Section 11.04	Payment of Moneys Held by Paying Agents	41
Section 11.05	Repayment to Company	41

Article 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS		41
Section 12.01	No Recourse	41
Article 13 MISCELLANEOUS PROVISIONS		42
Section 13.01	Effect on Successors and Assigns	42
Section 13.02	Actions by Successor	42
Section 13.03	Surrender of Company Powers	42
Section 13.04	Notices	42
Section 13.05	Governing Law	42
Section 13.06	Treatment of Securities as Debt	42
Section 13.07	Certificates and Opinions as to Conditions Precedent	42
Section 13.08	Payments on Business Days	42
Section 13.09	Conflict with Trust Indenture Act	42
Section 13.10	Counterparts	42
Section 13.11	Separability	42
Section 13.12	Compliance Certificates	43
Article 14 SUBORDINATION OF SECURITIES		43
Section 14.01	Subordination Terms	43

(1)	This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

iii

INDENTURE

INDENTURE, dated as of , among CALLIDITAS THERAPEUTICS AB, a Swedish public limited liability company (the “Company”), and , as trustee (the “Trustee”):

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of subordinated debt securities (hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;

WHEREAS, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and

WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

Article 1

DEFINITIONS

Section 1.01 Definitions of Terms. The terms defined in this Section (except as in this Indenture or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this instrument.

“Authenticating Agent” means an authenticating agent with respect to all or any of the series of Securities appointed by the Trustee pursuant to Section 2.10.

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

“Board of Directors” means the Board of Directors (or the functional equivalent thereof) of the Company or any duly authorized committee of such Board.

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.

“Business Day” means, with respect to any series of Securities, any day other than a day on which federal or state banking institutions in the Borough of Manhattan, the City of New York, or in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law, executive order or regulation to close.

“Certificate” means a certificate signed by any Officer. The Certificate need not comply with the provisions of Section 13.07.

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“Company” means Calliditas Therapeutics AB, a public limited liability company duly organized and existing under the laws of Sweden, and, subject to the provisions of Article Ten, shall also include its successors and assigns.

“Corporate Trust Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at .

“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

“Defaulted Interest” has the meaning set forth in Section 2.03.

“Depositary” means, with respect to Securities of any series for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company, another clearing agency, or any successor registered as a clearing agency under the Exchange Act, or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or 2.11.

“Event of Default” means, with respect to Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.

“Exchange Act” means the United States Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

“Global Security” means a Security issued to evidence all or a part of any series of Securities which is executed by the Company and authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee.

“Governmental Obligations” means securities that are (a) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are not callable or redeemable at the option of the issuer thereof at any time prior to the stated maturity of the Securities, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.

“herein”, “hereof and “hereunder”, and other words of similar import, refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance with the terms hereof and shall include the terms of particular series of Securities established as contemplated by Section 2.01.

“Interest Payment Date”, when used with respect to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect to Securities of that series is due and payable.

“Officer” means, with respect to the Company, the chairman of the Board of Directors, a chief executive officer, a president, a chief financial officer, a chief operating officer, any executive vice president, any senior vice president, any vice president, the treasurer or any assistant treasurer, the controller or any assistant controller or the secretary or any assistant secretary.

“Officer’s Certificate” means a certificate signed by any Officer. Each such certificate shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof.

“Opinion of Counsel” means an opinion in writing subject to customary exceptions of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof.

“Outstanding”, when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article Three, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.

“Person” means any individual, corporation, partnership, joint venture, joint-stock company, limited liability company, association, trust, unincorporated organization, any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.

“Responsible Officer” when used with respect to the Trustee means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters with respect to this Indenture (which, for the avoidance of doubt, includes without limitation any supplemental indenture hereto).

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

“Securityholder”, “holder of Securities”, “registered holder”, or other similar term, means the Person or Persons in whose name or names a particular Security is registered on the Security Register kept for that purpose in accordance with the terms of this Indenture.

“Security Register” and “Security Registrar” shall have the meanings as set forth in Section 2.05.

“Subsidiary” means, with respect to any Person:

(1) any corporation or company a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is, at the date of determination, directly or indirectly, owned by such Person (a “subsidiary”), by one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person;

(2) a partnership in which such Person or a subsidiary of such Person is, at the date of determination, a general partner of such partnership; or

“Trustee” means , and, subject to the provisions of Article Seven, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee” as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

Article 2

ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES

Section 2.01 Designation and Terms of Securities.

(a) the title of the Securities of the series (which shall distinguish the Securities of that series from all other Securities);

(e) the rate or rates at which the Securities of the series shall bear interest or the manner of calculation of such rate or rates, if any;

(g) the right, if any, to extend the interest payment periods and the duration of such extension;

(h) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, converted or exchanged, in whole or in part;

(j) the form of the Securities of the series including the form of the Certificate of Authentication for such series;

(k) if other than denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;

(p) any additional or alternative events of default;

(t) whether interest will be payable in cash or additional Securities at the Company’s or the Securityholders’ option and the terms and conditions upon which the election may be made;

(v) additional or alternative provisions, if any, related to defeasance and discharge of the offered Securities;

(w) the applicability of any guarantees;

(x) any restrictions on transfer, sale or assignment of the Securities of the series;

(y) any other terms of the series; and

(z) the subordination terms of the Securities of the series. All Securities of any one series shall be substantially identical except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures supplemental hereto.

Section 2.02 Form of Securities and Trustee’s Certificate. The Securities of any series and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in a Board Resolution, and set forth in an Officer’s Certificate, and they may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange on which Securities of that series may be listed, or to conform to usage.

Section 2.03 Denominations: Provisions for Payment. The Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(1)(j). The Securities of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. Subject to Section 2.01(1)(p), the principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency of the Company maintained for that purpose. Each Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day months.

Any interest on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:

Unless otherwise set forth in a Board Resolution or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record date” as used in this Section with respect to a series of Securities and any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the first day of the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day.

Section 2.04 Execution and Authentications. The Securities shall be signed on behalf of the Company by one of its Officers. Signatures may be in the form of a manual or facsimile signature.

Section 2.05 Registration of Transfer and Exchange.

(2) The Company shall keep, or cause to be kept, at its office or agency designated for such purpose a register or registers (herein referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).

Section 2.06 Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated for the purpose, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder.

Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities. In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Section 2.08 Cancellation. All Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation.

Section 2.09 Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities (and, with respect to the provisions of Article Fourteen, the holders of any indebtedness of the Company to which the Securities of any series are subordinated) any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities (and, with respect to the provisions of Article Fourteen, the holders of any indebtedness of the Company to which the Securities of any series are subordinated).

Section 2.10 Authenticating Agent. So long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business, and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by federal or state authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.

Section 2.11 Global Securities.

Article 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

Section 3.01 Redemption. The Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.

Section 3.02 Notice of Redemption.

Section 3.03 Payment Upon Redemption.

Section 3.04 Sinking Fund. The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

Section 3.05 Satisfaction of Sinking Fund Payments with Securities. The Company (i) may deliver Outstanding Securities of a series and (ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

Section 3.06 Redemption of Securities for Sinking Fund. Not less than 45 days prior to each sinking fund payment date for any series of Securities (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officer’s Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03.

Article 4

COVENANTS

Section 4.01 Payment of Principal, Premium and Interest. The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established with respect to such Securities. Payments of principal on the Securities may be made at the time provided herein and established with respect to such Securities by U.S. dollar check drawn on and mailed to the address of the Securityholder entitled thereto as such address shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire instructions to the Trustee no later than 15 days prior to the relevant payment date. Payments of interest on the Securities may be made at the time provided herein and established with respect to such Securities by U.S. dollar check mailed to the address of the Securityholder entitled thereto as such address shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account if such Securityholder shall have furnished wire instructions in writing to the Security Registrar and the Trustee no later than 15 days prior to the relevant payment date.

Section 4.02 Maintenance of Office or Agency. So long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency with respect to each such series and at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be presented for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed by any officer authorized to sign an Officer’s Certificate and delivered to the Trustee, designate some other office or agency for such purposes or any of them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. The Company initially appoints the Corporate Trust Office of the Trustee as its paying agent with respect to the Securities. Section 4.03 Paying Agents.

(a) that it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto;

(b) that it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable;

(c) that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and

(d) that it will perform all other duties of paying agent as set forth in this Indenture.

Section 4.03 Appointment to Fill Vacancy in Office of Trustee. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.

Section 4.04 Compliance with Consolidation Provisions. The Company will not, while any of the Securities remain Outstanding, consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or convey all or substantially all of its property to any other Person unless the provisions of Article Ten hereof are complied with.

Article 5

SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders. The Company will furnish or cause to be furnished to the Trustee (a) within 15 days after each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar.

Section 5.02 Preservation Of Information; Communications With Securityholders.

(2) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

Section 5.03 Reports by the Company.

(1) The Company covenants and agrees to provide (which delivery may be via electronic mail) to the Trustee within 30 days, after the Company files the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Company is required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the Trustee any materials for which the Company has sought and received confidential treatment by the Commission; and provided further, that so long as such filings by the Company are available on the Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR), or Interactive Data Electronic Applications (IDEA), or any successor system, such filings shall be deemed to have been filed with the Trustee for purposes hereof without any further action required by the Company; provided that an electronic link to such filing, together with an electronic notice of such filing have been sent to the Trustee. For the avoidance of doubt, a failure by the Company to file annual reports, information and other reports with the SEC within the time period prescribed thereof by the Commission shall not be deemed a breach of this Section 5.03.

Section 5.04 Reports by the Trustee.

(2) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.

Article 6

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

Section 6.01 Events of Default.

(1) Whenever used herein with respect to Securities of a particular series, “Event of Default” means any one or more of the following events that has occurred and is continuing:

(a) the Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;

(b) the Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;

(c) the Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the Securities of that series at the time Outstanding;

(d) the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors; or

(e) a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days.

No such rescission and annulment shall extend to or shall affect any subsequent default or impair any right consequent thereon.

Section 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee.

Section 6.03 Application of Moneys Collected. Any moneys collected by the Trustee pursuant to this Article with respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon presentation of the Securities of that series, and notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:

FIRST: To the payment of all indebtedness of the Company to which such series of Securities is subordinated to the extent required by Section 7.06 and any subordination terms of the series specified as contemplated by Article Fourteen;

THIRD: To the payment of the remainder, if any, to the Company or any other Person lawfully entitled thereto.

Section 6.04 Limitation on Suits. No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture or any Security to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, any Security or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; (iv) the Trustee for 90 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such 90 day period, the holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request.

Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.

Section 6.06 Control by Securityholders. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture or subject the Trustee in its sole discretion to personal liability. Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or officers of the Trustee, determine that the proceeding so directed, subject to the Trustee’s duties under the Trust Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to the Securityholders not involved in the proceeding. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding affected thereby, determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities of such series waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with the Trustee (in accordance with Section 6.01(3)). Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

Section 6.07 Undertaking to Pay Costs. All parties to this Indenture agree, and each holder of any Securities by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.

Article 7

CONCERNING THE TRUSTEE

Section 7.01 Certain Duties and Responsibilities of Trustee.

(2) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(a) prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that may have occurred:

(A) the duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(B) in the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

(b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

(c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities of that series; and

(d) none of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.

Section 7.02 Certain Rights of Trustee. Except as otherwise provided in Section 7.01:

(4) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been cured or waived), to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs;

Section 7.03 Trustee Not Responsible for Recitals or Issuance or Securities.

(1) The recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.

(2) The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.

(3) The Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.

Section 7.04 May Hold Securities. The Trustee or any paying agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying agent or Security Registrar.

Section 7.05 Moneys Held in Trust. Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree with the Company to pay thereon.

Section 7.06 Compensation and Reimbursement.

(2) The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances shall constitute indebtedness of the Company to which the Securities are subordinated. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities.

Section 7.07 Reliance on Officer’s Certificate. Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture upon the faith thereof.

Section 7.08 Disqualification; Conflicting Interests. If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

Section 7.09 Corporate Trustee Required; Eligibility. There shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial, or District of Columbia authority.

Section 7.10 Resignation and Removal; Appointment of Successor.

(2) In case at any time any one of the following shall occur:

(b) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Securityholder; or

Section 7.11 Acceptance of Appointment By Successor.

(4) No successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.

Section 7.12 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, including the administration of the trust created by this Indenture, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

Section 7.13 Preferential Collection of Claims Against the Company. The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.

Section 7.14 Notice of Default. If any Event of Default occurs and is continuing and if such Event of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Event of Default within the earlier of 90 days after it occurs and 30 days after it is known to a Responsible Officer of the Trustee or written notice of it is received by the Trustee, unless such Event of Default has been cured; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Securityholders.

Article 8

CONCERNING THE SECURITYHOLDERS

Section 8.01 Evidence of Action by Securityholders. Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in person or by agent or proxy appointed in writing.

Section 8.02 Proof of Execution by Securityholders. Subject to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner:

(1) The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.

(2) The ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.

The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

Section 8.03 Who May be Deemed Owners. Prior to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

Section 8.04 Certain Securities Owned by Company Disregarded. In determining whether the holders of the requisite aggregate principal amount of Securities of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

Section 8.05 Actions Binding on Future Securityholders. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that series.

Article 9

SUPPLEMENTAL INDENTURES

Section 9.01 Supplemental Indentures Without the Consent of Securityholders. In addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for one or more of the following purposes:

(1) to cure any ambiguity, defect, or inconsistency herein or in the Securities of any series;

(2) to comply with Article Ten;

(3) to provide for uncertificated Securities in addition to or in place of certificated Securities;

(6) to make any change that does not adversely affect the rights of any Securityholder in any material respect;

(8) to evidence and provide for the acceptance of appointment hereunder by a successor trustee; or

(9) to comply with any requirements of the Commission or any successor in connection with the qualification of this Indenture under the Trust Indenture Act.

Section 9.02 Supplemental Indentures With Consent of Securityholders. With the consent (evidenced as provided in Section 8.01) of the holders of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture or indentures at the time Outstanding, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby, (a) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture.

Section 9.03 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.04 Securities Affected by Supplemental Indentures. Securities of any series affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements of any securities exchange upon which such series may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of that series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that series then Outstanding.

Section 9.05 Execution of Supplemental Indentures. Upon the request of the Company, accompanied by its Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions of Section 7.01, shall receive an Officer’s Certificate or an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized or permitted by the terms of this Article and that all conditions precedent to the execution of the supplemental indenture have been complied with; provided, however, that such Officer’s Certificate or Opinion of Counsel need not be provided in connection with the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.

Article 10
SUCCESSOR ENTITY

Section 10.01 Company May Consolidate, Etc. Nothing contained in this Indenture shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its successor or successors) authorized to acquire and operate the same; provided, however, (a) the Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all series in accordance with the terms of each series, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect) reasonably satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall have acquired such property and (b) in the event that the Securities of any series then Outstanding are convertible into or exchangeable for shares of common stock or other securities of the Company, such entity shall, by such supplemental indenture, make provision so that the Securityholders of Securities of that series shall thereafter be entitled to receive upon conversion or exchange of such Securities the number of securities or property to which a holder of the number of shares of common stock or other securities of the Company deliverable upon conversion or exchange of those Securities would have been entitled had such conversion or exchange occurred immediately prior to such consolidation, merger, sale, conveyance, transfer or other disposition.

Section 10.02 Successor Entity Substituted.

Article 11
SATISFACTION AND DISCHARGE

Section 11.01 Satisfaction and Discharge of Indenture. If at any time: (a) the Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation (other than any Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07 and Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.

Section 11.02 Discharge of Obligations. If at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series, then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.

Thereafter, Sections 7.06 and 11.05 shall survive.

Section 11.03 Deposited Moneys to be Held in Trust. All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption of which such moneys or Governmental Obligations have been deposited with the Trustee.

Section 11.04 Payment of Moneys Held by Paying Agents. In connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys or Governmental Obligations.

Section 11.05 Repayment to Company. Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment of principal of or premium, if any, or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, or such other shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be repaid to the Company on May 31 of each year or upon the Company’s request or (if then held by the Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment shall thereafter, as a general creditor, look only to the Company for the payment thereof.

Article 12

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 12.01 No Recourse. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities.

Article 13
MISCELLANEOUS PROVISIONS

Section 13.01 Effect on Successors and Assigns. All the covenants, stipulations, promises and agreements in this Indenture made by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

Section 13.02 Actions by Successor. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.

Section 13.03 Surrender of Company Powers. The Company by instrument in writing executed by authority of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered shall terminate both as to the Company and as to any successor corporation.

Section 13.04 Notices. Except as otherwise expressly provided herein, any notice, request or demand that by any provision of this Indenture is required or permitted to be given, made or served by the Trustee or by the holders of Securities or by any other Person pursuant to this Indenture to or on the Company may be given or served by being deposited in first class mail, postage prepaid, addressed (until another address is filed in writing by the Company with the Trustee), as follows: . Any notice, election, request or demand by the Company or any Securityholder or by any other Person pursuant to this Indenture to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.

Section 13.05 Governing Law. This Indenture and each Security shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State, except to the extent that the Trust Indenture Act is applicable.

Section 13.06 Treatment of Securities as Debt. It is intended that the Securities will be treated as indebtedness and not as equity for federal income tax purposes. The provisions of this Indenture shall be interpreted to further this intention.

Section 13.07 Certificates and Opinions as to Conditions Precedent.

Section 13.08 Payments on Business Days. Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.

Section 13.09 Conflict with Trust Indenture Act. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

Section 13.10 Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 13.11 Separability. In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

Section 13.12 Compliance Certificates. The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year during which any Securities of any series were outstanding, an officer’s certificate stating whether or not the signers know of any Event of Default that occurred during such fiscal year. Such certificate shall contain a certification from the principal executive officer, principal financial officer or principal accounting officer of the Company that a review has been conducted of the activities of the Company and the Company’s performance under this Indenture and that the Company has complied with all conditions and covenants under this Indenture. For purposes of this Section 13.12, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. If the officer of the Company signing such certificate has knowledge of such an Event of Default, the certificate shall describe any such Event of Default and its status.

Article 14
SUBORDINATION OF SECURITIES

Section 14.01 Subordination Terms. The payment by the Company of the principal of, premium, if any, and interest on any series of Securities issued hereunder shall be subordinated to the extent set forth in an indenture supplemental hereto relating to such series.

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

		CALLIDITAS THERAPEUTICS AB

		By:

		Name:

		Title:

			, as Trustee

		By:

		Name:

		Title:

CROSS-REFERENCE TABLE (1)

Section of Trust Indenture Act of 1939, as Amended		Section of Indenture
310(a)		7.09
310(b)		7.08
		7.10
310(c)		Inapplicable
311(a)		7.13
311(b)		7.13
311(c)		Inapplicable
312(a)		5.01
		5.02(1)
312(b)		5.02(3)
312(c)		5.02(3)
313(a)		5.04(1)
313(b)		5.04(2)
313(c)		5.04(1)
		5.04(2)
313(d)		5.04(3)
314(a)		5.03
		13.12
314(b)		Inapplicable
314(c)		13.07(1)
314(d)		Inapplicable
314(e)		13.07(2)
314(f)		Inapplicable
315(a)		7.01(1)
		7.01(2)
315(b)		7.14
315(c)		7.01
315(d)		7.01(2)
315(e)		6.07
316(a)		6.06
		8.04
316(b)		6.04
316(c)		8.01
317(a)		6.02
317(b)		4.03
318(a)		13.09

(1) This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

Exhibit 5.1

Stockholm, 12 July 2021

Calliditas Therapeutics AB (publ), Company Reg. No. (CVR) 556659-9766 – F-3 registration

We, Swedish law firm Advokatfirman Vinge KB, have acted as Swedish law legal advisers to you with respect to certain matters of Swedish law in connection with your filing of a Registration Statement on Form F-3 (as amended or supplemented, the “Registration Statement”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration of an indeterminate amount of common shares, quota value of SEK 0.04 per share (the “Common Shares”), of Calliditas Therapeutics AB (publ) (the “Company”). The Common Shares may be issued in an unspecified number. The Registration Statement provides that the Common Shares (together with certain other securities in respect of which we do not express an opinion) may be offered in amounts, at prices and on terms to be set forth in one or more prospectus supplements (each a “Prospectus Supplement”) to the prospectus contained in the Registration Statement. This legal opinion is delivered to you pursuant to the Company’s request.

Basis of the Opinion.—For the purpose of this opinion we have examined the following documents:

(i)

a copy of the Registration Statement;

(ii)

the articles of association (Sw. bolagsordning) of the Company, adopted on 27 May 2021 (the “Articles of Association”);

(iii)

the certificate of incorporation (Sw. registreringsbevis) for the Company, issued by the Swedish Companies Registration Office (Sw. Bolagsverket) (the “SCRO”), on p.m. CEST on July 2021, showing relevant entries in the Swedish Company Registry (Sw. bolagsregistret) as per such date;

(iv)

the minutes of the annual general meeting of the Company held on 27 May 2021; and

(v)

the minutes of the meetings of the board of directors of the Company, held on July 2021, inter alia, approving the Registration Statement and the registration hereof with the SEC.

The documents mentioned in Sections (i) – (v) above are referred to as the “Corporate Documents” and individually a “Corporate Document”.

Reliance.—With respect to various questions of fact, we have relied upon certificates of public officials and upon certificates issued by the SCRO. For the purposes of this opinion, we have examined such other agreements, documents and records as we have deemed necessary or appropriate for the purpose of rendering this opinion.

Assumptions.—This opinion is subject to the following nature of opinion and observations:

that after the issuance of Common Shares offered pursuant to the Registration Statement, the total number of issued Common Shares then outstanding, will not exceed the total number of authorized Common Shares, as applicable, available for issuance under the authorization resolved on the Company’s annual general meeting held on 27 May 2021 and the Articles of Association or as may be further increased from time to time;

the accuracy and completeness of: the facts set out in any other documents reviewed by us; and any other information set out in public registers, e.g. certificates from the SCRO, or that has otherwise been supplied or disclosed to us; and as we have not made any independent investigation thereof you are advised to seek verification of such matters or information from other parties or seek comfort in respect thereof in other ways;

that the Company and its board of directors have acted in accordance with the general clause (Sw. generalklausulen) in the Swedish Companies Act and provisions regarding good market practice (including recommendations issued by the Swedish Corporate Governance Board) in connection with resolving to issue the Common Shares;

that all signatures on all documents supplied to us as originals or as copies of originals are genuine and that all documents submitted to us are true, authentic and complete;

that all documents, authorizations, powers and authorities produced to us remain in full force and effect and have not been amended or affected by any subsequent action not disclosed to us;

that where a document has been examined by us in draft form, it will be or has been executed in the form of that draft, and where a number of drafts of a document have been examined by us all changes to them have been marked or otherwise drawn to our attention;

all documents retrieved by us or supplied to us electronically (whether in portable document format (PDF) or as scanned copies), as photocopies, facsimile copies or e-mail conformed copies are in conformity with the originals;

that there has been no mutual or relevant unilateral mistake of fact and that there exists no fraud or duress; and

at or prior to the time of the delivery of the Common Shares, the payment for such Common Shares will have been received by the Company.

Opinions.—Based upon and subject to the foregoing and subject to the qualifications set out below, we are of the opinion that each Common Share has been duly authorized, and will, upon registration with the SCRO, be validly issued and fully paid and will be non-assessable.

Qualifications.—The qualifications to which this opinion is subject are as follows:

we express no opinion as to the exact interpretation of any particular wording in the Corporate Documents by any court;

provisions in the Corporate Documents providing that certain facts, determinations or calculations will be conclusive and binding (or prima facie evidence) may not be effective if they are incorrect and such provisions will not necessarily prevent judicial inquiry into the merits of such facts, determinations or calculations;

this opinion is given only with respect to the laws of the Kingdom of Sweden as in force today and as such laws are currently applied by Swedish courts and we express no opinion with respect to the laws of any other jurisdiction nor have we made any investigations as to any law other than the laws of the Kingdom of Sweden;

in rendering this opinion we have relied on certain matters of information obtained from the Company and other sources reasonably believed by us to be credible;

Governing Law.—This opinion is given in the Kingdom of Sweden and shall be governed by and construed in accordance with the laws of the Kingdom of Sweden.

Benefit of opinion.—

This opinion is strictly limited to the matters stated herein and is not to be read as extending by implication to any other matter.

We are not assuming any obligation to notify you of any changes to this opinion as a result of any facts or circumstances that may come to our attention in the future or as a result of any change in the laws of the Kingdom of Sweden which may hereafter occur.

We hereby consent to the inclusion of this opinion as Exhibit 5.1 to the Registration Statement and to the references to our firm under the caption “Legal Matters” in the Registration Statement. This consent is not to be construed as an admission that we are a party whose consent is required to be filed as part of the Registration Statement under the provisions of the Securities Act.

This opinion is addressed to you solely for your benefit in connection with the Registration Statement.

Yours faithfully,

/s/ Advokatfirman Vinge KB

Advokatfirman Vinge KB

Exhibit 5.2

July 12, 2021

Calliditas Therapeutics AB

Kungsbron 1, C8

SE-111 22

Stockholm, Sweden

Re: Securities Being Registered under Registration Statement on Form F-3

We have acted as counsel to you in connection with your filing of a Registration Statement on Form F-3 (as amended or supplemented, the “Registration Statement”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration by Calliditas Therapeutics AB, a company organized under the laws of Sweden (the “Company”), of an indeterminate amount of any combination of (i) common shares, quota value SEK 0.04 per share (the “Common Shares”), of the Company, which may be represented by American Depositary Shares (the “American Depositary Shares”), (ii) debt securities of the Company (“Debt Securities”), (iii) warrants to purchase Common Shares (including those represented by American Depositary Shares), Debt Securities or Units (as defined below ) (“Warrants”), and (iv) units comprised of Common Shares (including those represented by American Depositary Shares), Debt Securities, Warrants and other securities in any combination (“Units”). The American Depositary Shares, Debt Securities, Warrants and Units are sometimes referred to collectively herein as the “Securities.” Securities may be issued in an unspecified number (with respect to American Depositary Shares, Warrants and Units) or in an unspecified principal amount (with respect to Debt Securities). The Registration Statement provides that the Securities may be offered separately or together, in separate series, in amounts, at prices and on terms to be set forth in one or more prospectus supplements (each a “Prospectus Supplement”) to the prospectus contained in the Registration Statement.

We have reviewed such documents and made such examination of law as we have deemed appropriate to give the opinions set forth below. We have relied, without independent verification, on certificates of public officials and, as to matters of fact material to the opinions set forth below, on certificates of officers of the Company.

The opinions set forth below are limited to the law of New York.

For purposes of the opinions set forth below, without limiting any other exceptions or qualifications set forth herein, we have assumed that (i) the Company is validly existing as a Swedish public limited liability company, (ii) each of the Debt Securities, Warrants and Units, and the indentures, warrant agreements, unit agreements and other agreements governing Securities offered pursuant to the Registration Statement will be governed by the internal law of New York, (iii) the Company has the corporate power to execute, deliver and perform its obligations under the foregoing agreements, and (iv) after the issuance of any Securities offered pursuant to the Registration Statement, the total number of issued Common Shares, together with the total number of shares issuable upon the exercise, exchange, conversion or settlement, as the case may be, of any exercisable, exchangeable or convertible security (including without limitation any Unit), as the case may be, then outstanding, will not exceed the total number of authorized Common Shares available for issuance under the Company’s articles of association as then in effect.

Calliditas Therapeutics AB

July 12, 2021

Page 2

For purposes of the opinions set forth below, we refer to the following as the “Future Authorization and Issuance” of Securities:

with respect to any of the Securities, (a) the authorization by the Company of the amount, terms and issuance of such Securities (the “Authorization”) and (b) the issuance of such Securities in accordance with the Authorization therefor upon the receipt by the Company of the consideration to be paid therefor in accordance with the Authorization;

with respect to Debt Securities, (a) the authorization, execution and delivery of the indenture or a supplemental indenture relating to such Securities by the Company and the trustee thereunder and/or (b) the establishment of the terms of such Securities by the Company in conformity with the applicable indenture or supplemental indenture and applicable law, and (c) the execution, authentication and issuance of such Securities in accordance with the applicable indenture or supplemental indenture and applicable law; and

with respect to Warrants or Units, (a) the authorization, execution and delivery by the Company and the other parties thereto of any agreement under which such Securities are to be issued, and (b) the establishment of the terms of such Securities and the issuance of such Securities in conformity with those terms, the terms of any applicable agreement and applicable law.

Based upon the foregoing, and subject to the additional qualifications set forth below, we are of the opinion that:

1. Upon the Future Authorization and Issuance of Debt Securities, such Debt Securities will be valid and binding obligations of the Company.

2. Upon the Future Authorization and Issuance of Warrants, such Warrants will be valid and binding obligations of the Company.

3. Upon the Future Authorization and Issuance of Units, such Units will be valid and binding obligations of the Company.

Calliditas Therapeutics AB

July 12, 2021

Page 3

The opinions expressed above are subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and to general principles of equity.

This opinion letter and the opinions it contains shall be interpreted in accordance with the Core Opinion Principles as published in 74 Business Lawyer 815 (Summer 2019).

We hereby consent to the inclusion of this opinion as Exhibit 5.2 to the Registration Statement and to the references to our firm under the caption “Legal Matters” in the Registration Statement. In giving our consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations thereunder.

	Very truly yours,

	/s/ Goodwin Procter llp

	GOODWIN PROCTER LLP

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” in this registration statement (Form F-3) and to the incorporation by reference therein of our report dated April 27, 2021, with respect to the consolidated financial statements of Calliditas Therapeutics AB included in its Annual Report (Form 20-F) for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

/s/ Ernst & Young AB

Ernst & Young AB

Stockholm, Sweden

July 12, 2021

Exhibit 23.2

	KPMG Audit	Téléphone : +33 (0)4 37 64 76 00
	51 rue de Saint-Cyr	Télécopie : +33 (0)4 37 64 76 09
	CS 60409	Site internet : www.kpmg.fr
	69338 Lyon Cedex 9
	Lyon

Consent of Independent Auditors

We consent to the use of our report dated January 25, 2021, with respect to the consolidated statements of financial position of Genkyotex S.A. and its subsidiary as of September 30, 2020, and December 31, 2019, and the related consolidated income statements, consolidated statements of comprehensive income (loss), statements of changes in consolidated shareholders’ equity and consolidated statements of cash flows for the nine month period ended September 30, 2020, and the year ended December 31, 2019, and the related notes to the consolidated financial statements, included in Calliditas Therapeutics AB’s Registration Statement on Form F-3 and to the reference to our firm under the heading "Experts" in the prospectus.

Our report dated January 25, 2021, expresses a qualified opinion and includes a Basis for Qualified Opinion paragraph stating that as disclosed in Note 2.1 to the consolidated financial statements, the consolidated financial statements have been prepared to meet the reporting requirements of Rule 3-05 of Regulation S-X for purposes of a filing with the U.S. Securities and Exchange Commission and do not include comparative financial information as required by IAS 1 “Presentation of Financial Statements”.

Lyon, France

July 12, 2021

KPMG Audit

Division of KPMG S.A.

Stephane Devin		Bertrand Roussel

Partner		Partner

/s/ Stephane Devin		/s/ Bertrand Roussel