EXHIBIT 4.1
$75,000,000
IMPAX LABORATORIES, INC.
3.50% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2012
PURCHASE AGREEMENT
June 26, 2005
To the purchasers set forth on Schedule I hereto.
Dear Sirs and Mesdames:
Impax Laboratories, Inc., a Delaware corporation (the "COMPANY"),
confirms its agreement with respect to the proposed issuance and sale to the
several purchasers named in Schedule I hereto (each, a "PURCHASER" and
collectively, the "PURCHASERS") of $75,000,000 principal amount of the Company's
3.50% Convertible Senior Subordinated Debentures Due 2012 (the "SECURITIES") to
be issued pursuant to the provisions of an Indenture to be dated as of June 27,
2005 (the "INDENTURE") between the Company and HSBC Bank USA, National
Association, as Trustee (the "TRUSTEE"). The Securities will be convertible into
shares (the "UNDERLYING SECURITIES") of common stock, par value $.01 per share,
of the Company (the "COMMON STOCK").
The Securities are being issued and sold to the Purchasers in compliance
with an exemption from registration under the Securities Act of 1933, as amended
(the "SECURITIES ACT").
Pursuant to the terms of the Securities and the Indenture, the
Securities may be resold or otherwise transferred only if the resale or transfer
is hereinafter registered under the Securities Act or an exemption from
registration under the Securities Act is available. The Purchasers and their
permitted transferees will be entitled to the benefits of a Registration Rights
Agreement dated as of the Closing Date (as defined herein) among the Company and
the Purchasers (the "REGISTRATION RIGHTS AGREEMENT" and collectively with this
Agreement, the Indenture and the Securities, the "TRANSACTION DOCUMENTS").
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, the Purchasers that, except as disclosed in the
disclosure schedule attached to this Purchase Agreement (the "DISCLOSURE
SCHEDULE"), the Exchange Act Documents (as defined in Section 1(a) of this
Purchase Agreement) or the 8-K Filing (as defined in Section 6(k) of this
Purchase Agreement):
(a) Each document, if any, filed with the Securities and
Exchange Commission (the "COMMISSION") pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), since January 1, 2003 (collectively, the "EXCHANGE ACT
DOCUMENTS") complied in all material respects with the
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder and, when taken
together, do not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Exchange Act Documents
and is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a Material Adverse Effect. As used
in this Agreement, "MATERIAL ADVERSE EFFECT" means any material adverse
effect on the business, assets, results of operations or condition
(financial or otherwise) of the Company or on the transactions
contemplated hereby and in the Transaction Documents or on the authority
or ability of the Company to perform its obligations contemplated hereby
or thereby.
(c) The Company has no direct or indirect subsidiaries.
(d) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding
obligations of the Company, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and to general
principles of equity, including principles of materiality, commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except
that rights to indemnification and contribution thereunder may be
limited by federal or state securities laws or public policy relating
thereto that have not been previously waived (collectively, the
"ENFORCEABILITY EXCEPTIONS").
(e) The authorized capital stock of the Company conforms in
all material respects to the description thereof contained in Section
1(e) of the Disclosure Schedule, and which description conforms in all
material respects to the rights in the instruments defining the same.
2
(f) The shares of Common Stock outstanding prior to the
issuance of the Securities have been duly authorized and are validly
issued, fully paid and non-assessable.
(g) The Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Purchasers in accordance
with the terms of this Agreement, will be valid and binding obligations
of the Company, enforceable in accordance with their terms, subject to
the Enforceability Exceptions, and will be entitled to the benefits of
the Indenture and the Registration Rights Agreement.
(h) The Underlying Securities issuable upon conversion of
the Securities have been duly authorized and reserved and, when issued
upon conversion of the Securities in accordance with the terms of the
Securities, will be validly issued, fully paid and non-assessable, and
the issuance of the Underlying Securities will not be subject to any
preemptive or similar rights.
(i) Except for the registration rights contained in (A) the
Registration Rights Agreement and (B) (i) the Strategic Alliance
Agreement dated June 27, 2001, between Teva Pharmaceuticals Curacao,
N.V. and Impax Laboratories, Inc. (ii) the Registration Rights Agreement
dated as of June 27, 2001 by and between Impax Laboratories, Inc. and
Teva Pharmaceuticals Curacao, N.V., and (iii) the Registration Rights
Agreement dated as of May 7, 2003 by and among the Company and the
investors named therein, the Company has not granted or agreed to grant
to any person any rights (including "piggy-back" registration rights) to
have any securities of the Company registered with the Commission or any
other governmental authority that have not been satisfied or waived.
(j) Except for the Stockholders' Agreement dated December
14, 1999 by and among Global Pharmaceutical Corporation (known now as
Impax Laboratories, Inc.) and the investors named therein, as amended by
Amendment No. 1 thereto dated as of March 23, 2000, there are no voting
agreements, voting trusts, proxies or other agreements or understandings
with respect to the voting of any capital stock of the Company of which
the Company is a party.
(k) Each of the Indenture and the Registration Rights
Agreement has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, the Company enforceable in accordance
with its terms, subject to the Enforceability Exceptions.
(l) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Transaction
Documents will not contravene in any material respect any provision of
3
applicable law or the certificate of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company
that is material to the Company for which a waiver or consent has not
been obtained, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under the Transaction Documents, except such
as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Securities and by
Federal and state securities laws with respect to the obligations of the
Company under the Registration Rights Agreement or as may be required by
the National Association of Securities Dealers, Inc. ("NASD") or such
the failure of which to obtain would not, individually or in the
aggregate, have a Material Adverse Effect.
(m) Since September 30, 2004, there has been no change or
development that has had a Material Adverse Effect. The Company has not
taken any steps to seek protection pursuant to any bankruptcy law nor
does the Company have knowledge that its creditors intend to initiate
involuntary bankruptcy proceedings or knowledge of any fact which would
reasonably lead a creditor to do so. The Company is not as of the date
hereof, and after giving effect to the transactions contemplated hereby
to occur at the Closing, will not be Insolvent. For purposes hereof,
"INSOLVENT" shall have the meaning specified in Section 271 of Article
10 of the New York Debtor and Creditor Law, as the same has been
construed by case law in existence as of the date hereof. All
Indebtedness of the Company as of May 31, 2005 is disclosed on Section
1(m) of the Disclosure Schedule. There has been no material change in
the Indebtedness since such date.
(n) The Company is not in violation of its certificate of
incorporation or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company to which the Company is a party or by which the
Company or its properties or assets is subject or bound, except for such
defaults that would not, individually or in the aggregate, have a
Material Adverse Effect.
(o) There are no legal or governmental proceedings, orders,
judgments, writs, injunctions, decrees or demands pending or, to the
Company's knowledge, threatened to which the Company is a party or to
which any of the properties or assets of the Company is subject or bound
other than proceedings, orders, judgments, writs, injunctions, decrees
or
4
demands that would not, individually or in the aggregate, have a
Material Adverse Effect.
(p) To the Company's knowledge, the Company (i) is in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) has received all
permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business, (iii) is in compliance with
all material terms and conditions of any such permit, license or
approval, (iv) is in compliance with any provisions of the Employee
Retirement Income Security Act of 1974, as amended, ("ERISA") or the
rules and regulations promulgated thereunder and (v) is in compliance
with any provisions of the U.S. Foreign Corrupt Practices Act of 1977,
as amended, (the "FOREIGN CORRUPT PRACTICE ACT") or the rules and
regulations promulgated thereunder, except, with respect to clauses (i)
through (v), where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals, or
noncompliance with ERISA or the Foreign Corrupt Practices Act or failure
to comply with the terms and conditions of such permits, licenses or
approvals, would not, individually or in the aggregate, have a Material
Adverse Effect
(q) There are no costs or liabilities to the Company
associated with Environmental Laws (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties) which would, individually or in
the aggregate, have a Material Adverse Effect.
(r) The Company is not, and after giving effect to the
issuance and sale of the Securities and the application of the proceeds
thereof as contemplated in Section 3 hereof will not be, required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(s) Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act, each an
"AFFILIATE") has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be
integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or
(ii) offered, solicited offers to buy or sold the Securities by any form
of general solicitation or general advertising (as those terms are used
in Regulation D under the Securities Act) or in any manner
5
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(t) Subject to compliance by the Purchasers with the
representations and warranties set forth in Section 7, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Purchasers in the manner contemplated by this
Agreement to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended.
(u) The Securities satisfy the requirements set forth in
Rule 144A(d)(3) under the Securities Act.
(v) The books, records and accounts of the Company in all
material respects accurately and fairly reflect, in reasonable detail,
the transactions in, and dispositions of, the assets of, and the results
of operations of, the Company. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(w) The Company owns or possesses, or has the right to use,
all material patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names and approved FDA new
drug applications, approved abbreviated new drug applications and
approved new animal drug applications currently employed or required by
it in connection with the business currently conducted by it, or as
currently proposed to be conducted, as described in the Exchange Act
Documents, except such as the failure to so own or possess or have the
right to use would not have, individually or in the aggregate, a
Material Adverse Effect. To the Company's knowledge, there are no valid
and enforceable United States patents that are infringed by the business
currently conducted by the Company, or as currently proposed to be
conducted by the Company, as described in the Exchange Act Documents and
which infringement would have a Material Adverse Effect. The Company is
not aware of any basis for a finding that the Company does not have
valid title or license rights to the patents and patent applications
referenced in the Exchange Act Documents as owned or licensed by the
Company. To the
6
Company's knowledge, the Company is not subject to any judgment, order,
writ, injunction or decree of any court or any Federal, state, local,
foreign or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or any arbitrator, nor
has it entered into or are a party to any contract, which restricts or
impairs the use of any of the foregoing which would, individually or in
the aggregate, have a Material Adverse Effect. The Company is not aware
of any prior art that may render any patent application owned by the
Company which has not been disclosed to the United States Patent and
Trademark Office and which would, individually or in the aggregate, have
a Material Adverse Effect. The Company has not received any written
notice of infringement of or conflict with asserted rights of any third
party with respect to the business currently conducted by them as
described in the Exchange Act Documents and which would, individually or
in the aggregate, have a Material Adverse Effect.
(x) Other than with respect to Environmental Laws and ERISA
(which are governed by Section 1(p)) the Company has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "AUTHORIZATION") of, and has made all filings with
and notices to, all appropriate federal, state, local or foreign
governmental or regulatory authorities and self regulatory organizations
and all courts and other tribunals, as are necessary to own, lease,
license and operate its respective properties and to conduct its
business, except to the extent the failure to have any such
Authorization or to make any such filing or notice would not,
individually or in the aggregate, have a Material Adverse Effect. Each
such Authorization is valid and in full force and effect and the Company
is in compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto, and no event has occurred (including,
without limitation, the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time or both,
would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both,
would result in any other impairment of the rights of the holder of any
such Authorization except to the extent such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction would not, individually or
in the aggregate, have a Material Adverse Effect.
(y) There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale or
liens granted or issued by the Company relating to or entitling any
person to purchase or otherwise to acquire any shares of the capital
stock of the Company, except for options granted to directors and
employees of the Company in the ordinary course of business since
December 31, 2003.
7
(z) The financial statements included or incorporated by
reference in the Exchange Act Documents, together with related schedules
and notes, present fairly in all material respects the financial
position, results of operations and changes in financial position of the
Company on the basis stated therein at the respective dates or for the
respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial
and statistical information and data set forth in the Exchange Act
Documents are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the
books and records of the Company.
(aa) There are no existing or, to the Company's knowledge,
threatened labor disputes with the employees of the Company which would,
individually or in the aggregate, have a Material Adverse Effect.
(bb) The Company's manufacturing, distribution and marketing
practices are in compliance with all applicable laws, rules,
regulations, orders, licenses, judgments, writs, injunctions, or
decrees, including, without limitation, laws and regulations
administered by the United States Food and Drug Administration (the
"FDA") and the Drug Enforcement Administration ("DEA") and comparable
regulatory agencies in each country in which the Company's products are
marketed, except for such noncompliances that would not, individually or
in the aggregate, have a Material Adverse Effect.
(cc) The Company has not and will not use the services of any
person debarred under the provisions of the Generic Drug Enforcement Act
of 1992, 21 U.S.C. Section 335(a)(b). None of the Company's officers or
employees has been convicted of a felony under federal law for conduct
relating to the development, approval or regulation of any product
subject to the Federal Food, Drug, and Cosmetic Act or the Controlled
Substances Act.
(dd) There are no rulemaking or similar proceedings before
the FDA or comparable Federal, state, local or foreign government bodies
which involves the Company, which, if the subject of an action
unfavorable to the Company, would, individually or in the aggregate,
have a Material Adverse Effect.
(ee) The Company has not received any written communication
notifying the Company as to the termination or threatened termination or
modification or threatened modification of any consulting, licensing,
marketing, research and development, cooperative or any similar
agreement described in the Exchange Act Documents.
8
(ff) The statements relating to legal matters or proceedings,
as specified on Section 1(ff) of the Disclosure Schedule, fairly
summarize in all material respects such matters or proceedings as of the
date hereof.
(gg) Neither the Company, nor to the Company's knowledge, any
of its officers, directors or affiliates has taken, directly or
indirectly, any action designed to or which has constituted the
stabilization or manipulation of the price of the Common Stock or any
security convertible into or exchangeable or exercisable for Common
Stock to facilitate the sale or resale of any of the Securities.
(hh) The Company has filed all Federal, state, local and
foreign tax returns which are required to be filed through the date
hereof (except where the failure to so file would not have a material
adverse effect on the Company), which returns are true and correct in
all material respects, or have received extensions thereof, and have
paid all taxes shown on such returns and all assessments received by
them to the extent that the same are material and have become due. To
the Company's knowledge, there are no tax audits or investigations
pending, which if adversely determined, would, individually or in the
aggregate, have a Material Adverse Effect.
(ii) The Company is insured against such losses and risks and
in such amounts as are customary in the businesses in which it is
engaged or currently proposes to engage including, but not limited to,
insurance covering clinical trial liability, product liability and real
or personal property owned or leased against theft, damage, destruction,
act of vandalism and all other risks customarily insured against. All
policies of insurance and fidelity or surety bonds insuring the Company
or the Company's businesses, assets, employees, officers and directors
are in full force and effect. The Company is in compliance with the
terms of such policies and instruments in all material respects. The
Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not, individually or in the
aggregate, have a Material Adverse Effect. Since January 1, 2003, the
Company has not been denied any insurance coverage which it has sought
or for which it has applied.
(jj) The Company has good and marketable title in fee simple
to all real property and good and valid title to all personal property
it purports to own, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company. Any real property
and buildings held under lease by the Company is held by it under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with
9
the use made and proposed to be made of such property and buildings by
the Company.
(kk) There is no document, contract or other agreement of a
character required to be filed with the Commission under the Exchange
Act which is not filed as required by the Exchange Act or the rules and
regulations of the Commission thereunder. Each description of a
contract, document or other agreement in the Exchange Act Documents
fairly reflects in all material respects the material terms of the
underlying document, contract or agreement. Each material agreement
described in the Exchange Act Documents or incorporated by reference is
in full force and effect and is valid and enforceable by and against the
Company in accordance with its terms.
(ll) Anything in this Agreement or elsewhere herein to the
contrary notwithstanding, it is understood and acknowledged by the
Company (i) that none of the Purchasers have been asked to agree, nor
has any Purchaser agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or "derivative" securities
based on securities issued by the Company or to hold the Securities for
any specified term and (ii) that any Purchaser, and counter parties in
"derivative" transactions to which any such Purchaser is a party,
directly or indirectly, presently may have a "short" position in the
Common Stock. The Company further understands and acknowledges that one
or more Purchasers may engage in hedging activities at various times
during the period that the Securities are outstanding.
(mm) The Company confirms that, after giving effect to the
8-K Filing (as defined below), neither it nor, to its knowledge, any
officer, director or agent of the Company has provided any of the
Purchasers or their respective agents or counsel with any information
that constitutes in the Company's reasonable determination material,
nonpublic information. The Company understands and confirms that each of
the Purchasers will rely on the foregoing representations in effecting
transactions relating to the Securities. All written disclosure provided
to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, including the Schedules to this
Agreement, furnished by or on behalf of the Company, taken as a whole,
are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements made therein, in the light of the circumstances
under which they were made, not misleading, except that at the request
of the Purchasers, the Company has not disclosed to the Purchasers
information concerning the financial condition, results of operations
and cash flows of the Company as of and for the year ended December 31,
2004 and as of and for the three months ended March 31, 2005. The
Company acknowledges and agrees that no Purchaser makes or
10
has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth
in Section 7.
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement and subject to its
terms and conditions, the Company hereby agrees to sell to the several
Purchasers, and each Purchaser, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from the Company the respective
principal amount of Securities set forth in Schedule I hereto opposite its name
at a purchase price of 100% of the principal amount thereof (the "PURCHASE
PRICE").
3. Delivery of Proceeds. The proceeds to be delivered on the
Closing Date (as defined in Section 4 hereof) in the aggregate amount of
$75,000,000 (less the expenses of Highbridge International LLC (the "LEAD
PURCHASER") payable pursuant to Section 6(b) hereof, as set forth on a schedule
to be provided by the Lead Purchaser to the Company prior to the Closing) shall
be used only to satisfy the payment obligations arising from the acceleration of
the Company's 1.25% Convertible Senior Subordinated Debentures due April 1,
2024, which satisfaction shall be effective simultaneously with the Closing.
4. Payment and Delivery. Payment for the Securities shall be made
to, or as directed by, the Company in Federal or other funds immediately
available in New York City against delivery of such Securities for the
respective accounts of the several Purchasers at 10:00 a.m., New York City time,
on June 27, 2005, or at such other time on the same or such other date as shall
be mutually agreeable to the Company and the Lead Purchaser. The time and date
of such payment are hereinafter referred to as the "CLOSING DATE."
The Securities shall be in definitive form or global form, as specified
by the Lead Purchaser, and registered in such names and in such denominations as
the applicable Purchaser shall request in writing not later than one full
Business Day prior to the Closing Date. The Securities shall be delivered to
each Purchaser on the Closing Date for the account of such Purchaser, with any
transfer taxes, if any, payable in connection with the transfer of the
Securities to the Purchasers duly paid, against payment of the Purchase Price
therefor.
5. Conditions to the Purchasers' Obligations. The several
obligations of the Purchasers to purchase and pay for the Securities on the
Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not
11
indicate the direction of the possible change, in the rating
accorded the Company or any of the Company's securities or in
the rating outlook for the Company by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any event that has
a Material Adverse Effect.
(b) The Purchasers shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 5(a)(i) and to the
effect that the representations and warranties of the Company contained
in this Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to the matters set forth in
Section 5(a)(i) or as to proceedings threatened.
(c) The Purchasers shall have received on the Closing Date
an opinion of (1) Blank Rome LLP, counsel for the Company, dated the
Closing Date, to the effect set forth in Exhibit A-1 and (2)
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, special FDA counsel for the Company,
dated the Closing Date, to the effect set forth in Exhibit A-2. Such
opinions shall be rendered to the Purchasers at the request of the
Company and shall so state therein.
(d) The "lock-up" agreements, each substantially in the form
of Exhibit B hereto, between the Purchasers and certain executive
officers and directors of the Company relating to sales and certain
other dispositions of shares of common stock or certain other
securities, delivered to the Purchasers on or before the date hereof,
shall be in full force and effect on the Closing Date.
(e) The Company will cause the Securities to be eligible for
trading on the Private Offering, Resales and Trading through Automatic
Linkages ("PORTAL") system of the NASD.
(f) The Purchasers shall have received on the Closing Date
the consent of Wachovia Bank, N.A. in the form attached hereto as
Exhibit C.
6. Covenants of the Company. In further consideration of the
agreements of the Purchasers contained in this Agreement, the Company covenants
with each Purchaser as follows:
12
(a) The Company will endeavor to qualify the Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request, provided, however, that
the Company shall not be required to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is otherwise not so subject.
(b) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company
shall pay or cause to be paid all expenses incident to the performance
of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants, if applicable, in connection with the issuance and sale of
the Securities and all other fees or expenses in connection with the
preparation of the Transaction Documents and all amendments and
supplements thereto, (ii) all costs and expenses related to the transfer
and delivery of the Securities to the Purchasers, including any transfer
or other taxes payable thereon, (iii) the fees and expenses, if any,
incurred in connection with the admission of the Securities for trading
in PORTAL or any appropriate market system, (iv) the costs and charges
of the Trustee and any transfer agent, registrar or depositary, (v) the
cost of the preparation, issuance and delivery of the Securities, (vi)
the legal fees and expenses of the Lead Purchaser incurred in connection
with the negotiation, due diligence and documentation of the Transaction
Documents and the transactions contemplated hereby and thereby
("PURCHASER EXPENSES") and (vii) all other cost and expenses incident to
the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. The Lead Purchaser may,
on the Closing Date, reduce its portion of the Purchase Price by the
amount of Purchaser Expenses less any Purchaser Expenses paid by the
Company prior to the Closing Date provided, that if the schedule
described in Section 3 is not delivered to the Company at the
time set forth therein, the Company shall pay the expenses and fees
specified therein within five Business Days of its delivery.
(c) Neither the Company nor any Affiliate will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner which would
require the registration under the Securities Act of the Securities.
(d) The Company will not solicit any offer to buy or offer
or sell the Securities or the Underlying Securities by means of any form
of general solicitation or general advertising (as those terms are used
in
13
Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act.
(e) While any of the Securities or the Underlying Securities
remain "restricted securities" within the meaning of the Securities Act,
the Company will make available, upon request, to any seller of such
Securities the information specified in Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to Section 13 or
15(d) of the Exchange Act.
(f) The Company will use its commercially reasonable efforts
to permit the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the NASD relating
to trading in PORTAL.
(g) During the period of two years after the Closing Date,
the Company will not, and will not permit any of its affiliates under
its control (as defined in Rule 144 under the Securities Act) to resell
any of the Securities or the Underlying Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by any
of them.
(h) The Company will not take any action prohibited by
Regulation M under the Exchange Act in connection with the distribution
of the Securities contemplated hereby.
(i) The Company hereby agrees that, without the prior
written consent of the Lead Purchaser (on behalf of the Purchasers), it
will not, during the period ending 60 days after the date hereof, (i)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock of the Company or any
securities convertible into or exercisable or exchangeable for Common
Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise. The foregoing sentence
shall not apply to the following issuances (the "EXCLUDED ISSUANCES")
(A) to the sale of the Securities under this Agreement or the issuance
of the Underlying Securities, (B) to the issuance by the Company of any
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof, provided that
the terms of such option, warrant or convertible security relating to
any purchase, exercise or conversion price thereunder, the number of
securities issuable thereunder or any time period relating to the
exercise or conversion thereunder are not
14
amended, modified or changed on or after the date hereof, (C) to the
grant of any option or issuance of any stock, restricted stock or stock
appreciation right or other stock-linked security under any employee
equity or employee equity-linked plan of the Company that exist as of
the date hereof or that is approved by the independent members of the
Company's Board of Directors; (D) in connection with any bona-fide
merger or acquisition as approved by the Company's Board of Directors;
provided that any issuance by the Company of shares of Common Stock is
not to raise cash to fund such merger or acquisition; (E) in connection
with any bona-fide strategic agreement, joint venture agreement, limited
liability company agreement or similar agreement entered into with any
supplier, manufacturer, distributor or customer that is approved by the
Company's Board of Directors, the primary purpose of which is not to
raise cash; (F) to shares of Common Stock or other equity securities or
equity linked securities of the Company pursuant to a bona fide firm
commitment underwritten public offering with gross proceeds to the
Company of at least $30 million with a nationally or regionally
recognized underwriter; or (G) the filing of a registration statement to
permit sales of the Company's common stock by Teva Pharmaceuticals
Curacao, N.V.; provided, however, that in the case of any dispositions
pursuant to (D) or (E), the transferee, in each case, agrees to be bound
by the terms of the previous sentence.
(j) The Company shall apply the Purchase Price only as
specified in Section 3 hereof.
(k) On or before 8:30 a.m., New York time, on the first
business day following the date of this Agreement, the Company shall
file a Current Report on Form 8-K describing the terms of the
transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and attaching the material Transaction
Documents (including, without limitation, this Agreement, the Indenture,
the form of the Debenture and the Registration Rights Agreement) as
exhibits to such filing (including all attachments, the "8-K FILING").
From and after the filing of the 8-K Filing with the Commission, no
Purchaser shall be in possession of any material, nonpublic information
received from the Company or any of its officers, directors, employees
or agents, that is not disclosed in the 8-K Filing. Subject to the
foregoing, neither the Company nor any Purchaser shall issue any press
releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be
entitled, without the prior approval of any Purchaser,
to make any press release or other public disclosure with respect to
such transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith or (ii) as, in the reasonable judgment of
the Company or its counsel, is required by applicable law or regulations
or applicable stock exchange rules (provided that in the case of
15
clause (i) each Purchaser shall be provided by the Company with a draft
of such press release or other public disclosure prior to its release).
Notwithstanding the foregoing, the Company shall not publicly disclose
the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission or any regulatory agency or the applicable
stock exchange, without the prior written consent of such Purchaser,
except (i) for disclosure thereof in the 8-K Filing or Registration
Statement or similar disclosure as required in future Commission filings
or (ii) as required by applicable law or regulations or applicable stock
exchange rules or any order of any court or other governmental agency,
in which case the Company shall use its reasonable best efforts to
provide such Purchaser with prior notice of such disclosure.
7. Representations and Warranties of Purchasers. Each Purchaser,
severally and not jointly, represents and warrants to, and agrees with, the
Company that:
7.1 Authorization; Enforceability. Such Purchaser is duly
and validly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or
organization with the requisite corporate power and authority to
purchase the Securities being purchased by it hereunder and to
execute and deliver this Agreement and the other Transaction
Documents to which it is a party. This Agreement constitutes,
and upon execution and delivery thereof, each other Transaction
Document to which such Purchaser is a party will constitute,
such Purchaser's valid and legally binding obligation,
enforceable in accordance with its terms, subject to the
Enforceability Exceptions.
7.2 Investment Intent. Such Purchaser is acquiring the
Securities being purchased by it hereunder solely for its own
account, and not with a present view to the public resale or
distribution of all or any part thereof, except pursuant to
sales that are registered under, or are exempt from the
registration requirements of, the Securities Act.
7.3 Information. Such Purchaser has had access to all of the
filings of the Company that are filed on the XXXXX system prior
to the date hereof. To the extent requested by such Purchaser,
the Company has, prior to the date hereof, provided such
Purchaser with information regarding the business, operations
and financial condition of the Company, and has, prior to the
date hereof, granted to such Purchaser the opportunity to ask
questions of and receive satisfactory answers from
representatives of the Company, its officers, directors,
employees and agents concerning the Company and materials
relating to the terms and conditions of the
16
purchase and sale of the Securities hereunder, and based
thereon, such Purchaser believes it can make an informed
decision with respect to its investment in the Securities.
Neither such information nor any other investigation conducted
by such Purchaser or its representatives shall modify, amend or
otherwise affect such Purchaser's right to rely on the Company's
representations and warranties contained in this Agreement.
7.4 Restrictions on Transfer. (a) Such Purchaser is a
qualified institutional buyer as defined in Rule 144A under the
Securities Act (a "QIB") and an institutional "accredited
investor" within the meaning of Regulation D under the
Securities Act. Each Purchaser, severally and not jointly,
agrees with the Company that it will not solicit offers for, or
offer or sell, such Securities by any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2)
of the Securities Act. Each Purchaser, severally and not
jointly, agrees to offer, sell or otherwise transfer the
Securities, prior to the date which is two years after the
Closing Date, only (a) to the Company or any parent or
subsidiary thereof, (b) for so long as the Securities are
eligible for resale pursuant to Rule 144A, to a person it
reasonably believes is a QIB that purchases for its own account
or for the account of a QIB to which notice is given that the
transfer is being made in reliance on Rule 144A, (c) pursuant to
a registration statement which has been declared effective under
the Securities Act, or (d) pursuant to another available
exemption from the registration requirements of the Securities
Act and applicable state securities or "blue sky" laws, subject
to the Company's and the Trustee's right prior to any such
offer, sale or transfer pursuant to clause (d) to require the
delivery of an opinion of counsel, certification and/or other
information reasonably satisfactory to each of them, and in each
of the foregoing cases, a certificate of transfer in the form
specified in the Indenture and the Securities is completed and
delivered by the transferor to the Trustee.
(b) Such Purchaser (i) agrees that it will only sell
the Securities or other securities of the Company in a
transaction that complies in all material respects with
applicable federal and state securities laws, (ii)
agrees that it will not sell or otherwise dispose of or
transfer the Securities or other securities of the
Company or any interest therein in a transaction that is
part of a plan or scheme to evade the registration
requirements of the Securities Act and (iii)
acknowledges and agrees that notwithstanding the
effectiveness of a registration
17
statement covering the Securities, the Securities will
remain "restricted securities" until such Securities
have been sold pursuant to (x) an effective registration
statement or (y) Rule 144, and such Purchaser will
remain responsible for compliance with applicable
federal and state securities laws in connection with any
resale by the Purchaser of the Securities.
(c) Such Purchaser understands that the Company is
relying on the representations of such Purchaser set
forth in this Section 7.4 in order to determine
compliance with applicable securities laws in connection
with the sale of the Securities to such Purchaser.
7.5 Legend. Such Purchaser understands that the certificates
representing the Securities may bear a restrictive legend
reflecting the transfer restrictions set forth above.
7.6 Reliance on Exemptions. Such Purchaser understands that
the Securities are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of
federal and state securities laws and that the Company is
relying upon the truth and accuracy of the representations and
warranties of such Purchaser set forth in this Section 7 in
order to determine the availability of such exemptions and the
eligibility of such Purchaser to acquire the Securities.
7.7 Non-Affiliate Status. Such Purchaser is not an Affiliate
of the Company. Such Purchaser's investment in the Securities is
not for the purpose of acquiring, directly or indirectly,
control of, and it has no intent to acquire or exercise control
of, the Company or to influence the decisions or policies of the
Board of Directors.
8. Indemnity. (a) The Company agrees to indemnify and hold harmless
each Purchaser, each person, if any, who controls any Purchaser within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, and each affiliate of any Purchaser within the meaning of Rule 405 under
the Securities Act (each, an "INDEMNIFIED PERSON") from and against any and all
losses, claims, damages, penalties, fees and liabilities, including, without
limitation, the reasonable legal fees and other reasonable expenses of one
counsel (in addition to any local counsel) incurred (irrespective of whether any
such indemnitee is a party to the action for which indemnification hereunder is
sought) in connection with any suit, action or proceeding or any claim
(collectively, "Losses"), as incurred, as a result of, or arising out of or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company in the Transaction Documents, (b) any breach of any
covenant,
18
agreement or obligation of the Company contained in any Transaction Document or
(c) any cause of action, suit or claim brought or made against such Indemnified
Person by a third party (including for these purposes a derivative action
brought on behalf of the Company) and arising out of or resulting from the
execution, delivery or performance by the Company of the Transaction Documents
or any other certificate, instrument or document contemplated hereby or thereby;
provided that the Company shall not be required to indemnify any of the
Indemnified Persons to the extent Losses arise or result from a material
misrepresentation or material breach of any representation or warranty made by
such Purchaser or other Indemnified Person contained in the Transaction
Documents, or a material breach of any covenant, agreement or obligation by such
Purchaser or other Indemnified Person contained in the Transaction Documents.
(b) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Indemnified Person, such Indemnified Person shall promptly
notify the Company in writing, and the Company shall have the right to retain
one counsel (in addition to any local counsel) reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Company may designate in such proceeding and shall pay the reasonable fees and
expenses of such counsel related to such proceeding; provided, however, that
failure to so notify the Company shall not relieve such Company from any
liability hereunder except to the extent the Company is prejudiced as a result
thereof. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) Company and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Company has failed
within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both the Company and the Indemnified Person, the
Company proposes to have the same counsel represent it and the Indemnified
Person, and representation of both parties by the same counsel would, in the
opinion of counsel for the Indemnified Person, constitute a conflict of
interest. It is understood that the Company shall reimburse all such reasonable
fees and expenses actually incurred (upon delivery to the Company of reasonable
documentation therefor setting forth such expenses in reasonable detail) unless
a bona fide dispute exists with respect to such expenses. The Company shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final, non-appealable
judgment for the plaintiff, the Company agrees to indemnify any Indemnified
Person from and against any Liabilities by reason of such settlement or
judgment. The Company shall not, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is a party, unless such
settlement includes an unconditional release of such Indemnified
19
Person from all liability on claims that are the subject matter of such
proceeding and no admission of fault on the part of the Indemnified Person.
(c) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.
(d) The indemnity provisions contained in this Section 8 and
the representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Purchaser, any person controlling any Purchaser or any affiliate
of any Purchaser or by or on behalf of the Company, its officers, directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Securities.
9. Termination. The Purchasers may terminate this Agreement by
notice given to the Company executed by the Lead Purchaser (except in the case
of clauses (i) and (v), which termination right may be exercised by each
Purchaser as to itself but not the other Purchasers), if prior to the Closing
Date (i) in the good faith judgment of a Purchaser a Material Adverse Effect
shall have occurred between the date hereof and the Closing Date, (ii) trading
in securities generally on the New York Stock Exchange, Inc., the American Stock
Exchange or the Nasdaq National Market shall have been suspended or materially
limited, (iii) a material disruption in securities settlement, payment or
clearance services in the United States shall have occurred, (iv) any moratorium
on commercial banking activities shall have been declared by United States or
New York State authorities, (v) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign power, or
(B) an outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity or
emergency, or (C) any material change in the financial markets of the United
States which, in the case of (A), (B) or (C) above and in the judgment of a
Purchaser, makes it impracticable or inadvisable to proceed with the
transactions contemplated by this Agreement or (vi) the failure of the Company
to satisfy the conditions set forth in Section 5 of this Agreement on or before
June 30, 2005.
10. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Purchasers, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Purchasers or such Purchasers as have
so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket
20
expenses (including the fees and disbursements of their counsel) reasonably
incurred by such Purchasers in connection with this Agreement or the issuance of
Securities contemplated hereunder.
11. Rights of Participation. (a) In the event that, within one year
from the Closing Date, the Company proposes to issue equity securities or other
securities exchangeable or exercisable for or convertible into equity securities
(other than Excluded Issuances), the Company shall offer the Lead Purchaser the
opportunity to purchase such securities, on the same terms and conditions as
those offered to all other purchasers and pursuant to documentation reasonably
satisfactory to the Company and the Lead Purchaser.
(b) (i) The Company shall deliver to the Lead Purchaser a
written notice (the "OFFER NOTICE") of any proposed or intended issuance
or sale or exchange (the "OFFER") of the securities being offered (the
"OFFERED SECURITIES") pursuant to Section 11(a) above, which Offer
Notice shall (x) identify and describe the Offered Securities, (y)
describe the price and other terms upon which they are to be issued,
sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged and (z) offer to issue and sell to or
exchange with such Purchasers the Offered Securities.
(ii) To accept an Offer, in whole or in part, such
Purchaser must deliver a written notice to the Company prior to
the end of the fifth Business Day after such Purchaser's receipt
of the Offer Notice if the Purchaser enters into a
confidentiality agreement in form and substance reasonably
satisfactory to the Company relating to the Offer, or the second
Business Day after such Purchaser's receipt of the Offer Notice
if the Purchaser does not enter into a confidentiality agreement
in form and substance reasonably satisfactory to the Company
relating to the Offer, (the "OFFER PERIOD"), setting forth the
portion of the Offered Securities, if any, that the Lead
Purchaser elects to purchase (the "NOTICE OF ACCEPTANCE");
provided, however, if the Lead Purchaser desires to accept an
offer for less than all of the Offered Securities, it may only
accept an Offer for 50% or less of the Offered Securities.
(iii) The Company shall have ten Business Days from
the expiration of the Offer Period above to offer, issue, sell
or exchange all or any part of such Offered Securities as to
which a Notice of Acceptance has not been given by the
Purchasers during the Offer Period (the "REFUSED SECURITIES"),
only upon terms and conditions (including, without limitation,
unit prices and interest rates) that are not more favorable to
the acquiring person or
21
persons or less favorable to the Company than those set forth in
the Offer Notice.
(iv) In the event the Company shall propose to sell
less than all the Refused Securities (any such sale to be in the
manner and on the terms specified in Section 11(b)(iii) above),
then the Lead Purchaser may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered
Securities specified in its Notice of Acceptance to an amount
that shall be not less than the number or amount of the Offered
Securities that such Purchaser elected to purchase pursuant to
Section 11(b)(ii) above multiplied by a fraction, (i) the
numerator of which shall be the number or amount of Offered
Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to
such Purchaser pursuant to Section 11(b)(iii) above prior to
such reduction) and (ii) the denominator of which shall be the
original amount of the Offered Securities. In the event that
such Purchaser so elects to reduce the number or amount of
Offered Securities specified in its Notice of Acceptance, the
Company may not issue, sell or exchange more than the reduced
number or amount of the Offered Securities unless and until such
securities have again been offered to the Lead Purchaser in
accordance with Section 11(b)(i) above.
(v) Upon the closing of the issuance, sale or
exchange of all or less than all of the Offered Securities, the
Lead Purchaser shall acquire from the Company, and the Company
shall issue to the Lead Purchaser within a reasonable period of
time, the number or amount of Offered Securities specified in
the Notices of Acceptance, as reduced pursuant to Section
11(b)(iv) above if the Purchasers have so elected, upon the
terms and conditions specified in the Offer. The purchase by the
Purchasers of any Offered Securities is subject in all cases to
the preparation, execution and delivery by the Company and the
Purchasers, within a reasonable period of time, of a purchase
agreement relating to such Offered Securities reasonably
satisfactory in form and substance to the Purchasers and their
respective counsel.
(vi) Any Offered Securities not acquired by the
Purchasers or other persons in accordance with this Section
11(b) above may not be issued, sold or exchanged until they are
again offered to the Purchasers under the procedures specified
in this Agreement.
12. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and the Purchasers, any controlling
persons
22
referred to herein and their respective successors and assigns; provided, that
the rights and obligations of the Lead Purchaser with respect to the rights of
participation set forth in Section 11 of this Purchase Agreement may not be
assigned to any party, other than a successor to the entire business of the Lead
Purchaser, without the prior written consent of the Company; provided, further,
that the rights and obligations of the Company pursuant to this Purchase
Agreement may not be assigned to any party other than a successor to the entire
business of the Company.
13. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed by registered
or certified mail, postage prepaid, return receipt requested, or otherwise
delivered by hand or by messenger.
Notices to the Purchasers shall be given at the address as set forth on
Schedule I hereto, with a copy to (solely for informational purposes):
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
Notices to the Company shall be given to the Company at:
IMPAX Laboratories, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to (solely for informational purposes):
Blank Rome LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
14. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
23
15. Severability. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable, or
void, portions of such provision, or such provision in its entirety, to the
extent necessary, shall be severed from this Agreement and the balance of this
Agreement shall be enforceable in accordance with its terms.
16. Amendment and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Lead Purchaser.
17. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subjects
hereof. Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge, or
termination is sought.
18. Survival. The respective representations, warranties, covenants
and agreements of the Company and the Purchasers set forth in or made pursuant
to this Agreement will remain in full force and effect and will survive delivery
of and payment for the Securities sold hereunder and any termination of this
Agreement.
19. Independence of Purchasers. The obligations of each Purchaser
under any Transaction Document are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by the Purchasers pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Purchasers represent
and warrant that they are not acting in concert or as a group with respect to
such obligations or the transactions contemplated by the Transaction Documents
and confirm that they have or legal counsel has on their behalf independently
participated in the negotiation of the transaction contemplated hereby. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any
Purchaser to be joined as an additional party in any proceeding for such
purpose.
20. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. To the
fullest extent permitted by
24
applicable law, the Company hereby irrevocably submits to the non-exclusive
jurisdiction of any New York State court or Federal court sitting in the County
of New York in respect of any suit, action or proceeding arising out of or
relating to the provisions of this Agreement and irrevocably agree that all
claims in respect of any such suit, action or proceeding may be heard and
determined in any such court. The parties hereto hereby waive, to the fullest
extent permitted by applicable law, any objection that they may now or hereafter
have to the laying of venue of any such suit, action or proceeding brought in
any such court, and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.
21. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
[Remainder of Page Intentionally Left Blank.]
25
Very truly yours,
IMPAX LABORATORIES, INC.
By:
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
Accepted as of the date hereof
PURCHASERS:
HIGHBRIDGE INTERNATIONAL LLC
By: Highbridge Capital Management, LLC
By:
-------------------------------------
Name: Xxxx X. Chill
Title: Managing Director
SCHEDULE I
PURCHASER
NAME AND ADDRESS SECURITIES TO BE PURCHASED
---------------------------------------------- ----------------------------
Highbridge International LLC
c/o Highbridge Capital Management, LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxx X. Xxxxxx / Xxxx X. Chill
Tel: (000) 000-0000
Fax: (000) 000-0000 $ 75,000,000
and
Attn: Xxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Residence: Cayman Islands
------------
Total:.............................................. $ 75,000,000
============
EXHIBIT A-1
OPINION OF BLANK, ROME LLP
The opinion of Blank, Rome LLP, to be delivered pursuant to Section 5(c)
of the Purchase Agreement shall be to the effect that:
A. The Company is validly existing as a corporation in good
standing under the laws of the State of Delaware.
B. The Company is duly qualified to do business as a foreign
corporation and is in good standing in the Commonwealth of Pennsylvania and the
State of California.
C. The Company has the corporate power and authority to enter into
and perform its obligations under each of the Purchase Agreement, the
Registration Rights Agreement, the Indenture and the Securities.
D. Each of the Purchase Agreement, the Registration Rights
Agreement and the Indenture has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, the Company, enforceable against the
Company in accordance with its terms.
E. The Securities have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture, and delivered to and paid for by the Purchasers, in each case in
accordance with the terms of the Purchase Agreement, will be valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
F. The Underlying Securities reserved for issuance upon conversion
of the Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities,
will be validly issued, fully paid and non-assessable, and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights of
any stockholder under the General Corporation Law of the State of Delaware (the
"GCL"), the Company's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), or the Company's By-Laws (the "By-Laws"), or by
any contract listed in Annex A to this opinion letter.
G. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Purchase Agreement, the
Indenture, the Registration Rights Agreement and the Securities will not
contravene in any material respect any provision of applicable law or the
Certificate of
Incorporation or By-Laws of the Company or any agreement or other instrument
binding upon the Company that is listed in Annex A to this opinion letter, or,
to such counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company; and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency under the GCL, any law, rule or regulation of the State of New
York, or any federal law, rule or regulation of the United States, is required
for the performance by the Company of its obligations under the Purchase
Agreement, the Indenture, the Registration Rights Agreement or the Securities,
except such as may be required by the securities or "blue sky" laws of the
various states in connection with the offer and sale of the Securities and by
U.S. federal and state securities laws with respect to the Company's obligations
under the Indenture and the Registration Rights Agreement.
H. To such counsel's knowledge, the Company is not, and after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in Section 3 of the Purchase Agreement will
not be, required to register as an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
I. Based on the representations, warranties and agreements of the
Company in Sections 1(s), 1(t), 1(u), 6(c) and 6(d) of the Purchase Agreement
and of the Purchasers in Section 7 of the Purchase Agreement, it is not
necessary in connection with the offer, sale and delivery of the Securities to
the Purchasers under the Purchase Agreement to register the Securities under the
Securities Act of 1933 or to qualify the Indenture under the Trust Indenture Act
of 1939, it being understood that no opinion is expressed as to any subsequent
resale of any Security or Underlying Security.
2
EXHIBIT A-2
OPINION OF XXXXXXXXXXXX XXXX & XXXXXXXXX
The opinion of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx to be delivered pursuant to
Section 5(c) of the Purchase Agreement shall be to the effect that:
A. To the best of such counsel's knowledge, except as disclosed in
Section 1(w) of the Purchase Agreement, the Company possesses all approvals,
certificates, registrations, authorizations and permits issued by the FDA, or
any other federal or state agencies or bodies engaged in the regulation of
pharmaceuticals, necessary to conduct its business, except for such approvals,
certificates, registrations, authorizations or permits the absence of which to
maintain would not have a material adverse effect on the Company.
B. To the best of such counsel's knowledge, the Company has not received
any notice of proceedings relating to the revocation or modification of any such
approval, certificate, registration, authorization or permit which, singly or in
the aggregate, if the subject of any unfavorable decision, ruling or finding,
would have a material adverse effect on the Company.
C. To the best of such counsel's knowledge, except as disclosed in
Section 1(bb) of the Purchase Agreement, the Company is in compliance with all
applicable federal laws, regulations, orders and decrees governing its business
as prescribed by the FDA or any other federal agencies or bodies engaged in the
regulation of pharmaceuticals, except where noncompliance would not singly, or
in the aggregate, have a material adverse effect on the Company.
D. To the best of such counsel's knowledge, all bioavailability studies
undertaken to support approval of the Company's products for commercialization
have been conducted in compliance with all applicable federal laws, orders or
regulations in all material respects.
E. To the best of such counsel's knowledge, no filing or submission to
the FDA or any other federal or state regulatory body, that is intended to be
the basis for any approval, contains any material omission or material false
information.
EXHIBIT B
[FORM OF LOCK-UP LETTER]
June __, 2005
Highbridge International LLC
c/o Highbridge Capital Management, LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that you propose to enter into a Purchase
Agreement (the "PURCHASE AGREEMENT") with IMPAX Laboratories, Inc., a Delaware
corporation (the "COMPANY"), providing for the issuance by the Company (the
"OFFERING") to Highbridge International LLC and such other Purchasers identified
therein (collectively, the "PURCHASERS") of the Company's Convertible Senior
Subordinated Debentures Due 2012 (the "SECURITIES"). The Securities will be
convertible into shares of common stock, par value $.01, of the Company (the
"COMMON STOCK").
To induce the Purchasers to enter into the Purchase Agreement, the
undersigned hereby agrees that, without the prior written consent of Highbridge
International LLC on behalf of the Purchasers, it will not, during the period
commencing on the date hereof and ending 60 days after the Closing Date (as
defined in the Purchase Agreement), (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) the sale of any
Securities to the Purchasers pursuant to the Purchase Agreement, (b)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the
Offering, (c) exercises of options or warrants to purchase Common Stock, (d)
dispositions of Common Stock as a bona fide gift, (e) dispositions by will or
the laws of descent or distribution, or (f) dispositions to members of the
undersigned's immediate family; provided, however, that in the case of any
dispositions pursuant to (d), (e) or (f) the transferee, in each case, agrees to
be bound by the terms of this Lock-Up Agreement.
In addition, the undersigned agrees that, without the prior written
consent of Highbridge International LLC on behalf of the Purchasers, it will
not, during the period commencing on the date hereof and ending 60 days after
the Closing Date, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock other than in connection with the
filing by the Company of a Registration Statement on Form S-8. The undersigned
also agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of the undersigned's
shares of Common Stock except in compliance with the foregoing restrictions. The
undersigned further agrees to suspend any existing trading plans or other
arrangements pursuant to Rule 10b5-1 (a "10b5-1 PLAN") under the Securities
Exchange Act of 1934, as amended, during the period commencing on the date
hereof and ending 60 days after the Closing Date. Notwithstanding the
restrictions contained in the previous sentence, the undersigned shall be
permitted subsequent to the date hereof to enter into a 10b5-1 Plan, provided
that the undersigned hereby expressly agrees to suspend any trading or other
transactions pursuant to such 10b5-1 Plan during the period commencing on the
date hereof and ending 60 days after the Closing Date.
The undersigned understands that the Company and the Purchasers are
relying upon this Lock-Up Agreement in purchasing the Securities provided for in
the Purchase Agreement. The undersigned further understands that this Lock-Up
Agreement is irrevocable and shall be binding upon the undersigned's heirs,
legal representatives, successors and assigns.
2
Very truly yours,
---------------------------------
(Name)
---------------------------------
(Address)
3
