Exhibit 4.6
STOCK SUBSCRIPTION AGREEMENT
AMONG
ICN PHARMACEUTICALS, INC.
and
THE PURCHASERS NAMED HEREIN
Dated as of October 9, 1996
STOCK SUBSCRIPTION AGREEMENT
STOCK SUBSCRIPTION AGREEMENT (the "Agreement"), dated
as of October 9, 1996, by and among ICN Pharmaceuticals, Inc., a
Delaware corporation (the "Company") and the Purchasers specified
on the signature page to this Agreement (the "Purchasers").
WHEREAS, the Company desires to issue and sell 50,000
shares of Preferred Stock (for an aggregate purchase price of
$50,000,000); and
WHEREAS, the Purchasers desire to subscribe for and
purchase the securities described above upon the terms and
subject to the conditions specified herein (the "Sale
Transaction").
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements set forth herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" has the meaning ascribed to it in the
Securities Act.
"BALANCE SHEET" means the unaudited consolidated
balance sheet of the Company as of June 30, 1996 referred to in
Section 3.9 hereof.
"BALANCE SHEET DATE" means June 30, 1996.
"BANKRUPTCY CODE" means title 11 of the United States
Code, as amended.
"BENEFIT PLAN" has the meaning set forth in Section
3.12 hereof.
"BLUE SKY LAWS" means the state securities and takeover
laws.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of
corporate stock or any and all equivalent ownership interests in
a Person (other than a corporation).
"CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations, Preferences and Rights of the Preferred Stock,
attached hereto as Exhibit A, filed with the Secretary of State
of the State of Delaware on October 8, 1996.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMMON STOCK" means the common stock, par value $.01
per share, of the Company.
"COMPANY ASSETS" shall have the meaning set forth in
Section 3.16 hereof.
"ENVIRONMENTAL LAWS" means all federal, state, local
and foreign laws and regulations relating to pollution or the
environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata),
including, without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental
Concern.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, together with the rules and regulations
promulgated thereunder.
"FOOD AND DRUG ACT" means the Federal Food, Drug and
Cosmetic Act, 21 U.S.C. sections 301 ET SEQ., and the rules and
regulations promulgated thereunder, in each case as in effect and
as interpreted on the date hereof.
"GAAP" shall have the meaning set forth in Section 3.9
hereof.
"GOVERNMENTAL ENTITY" means any federal, state, local
or foreign legislative body, court, government, department or
instrumentality, or governmental, administrative or regulatory
authority or agency.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge,
without independent inquiry, of any of the executive officers of
the Company or its Significant Subsidiaries.
"LIENS" has the meaning set forth in Section 3.16
hereof.
"MATERIAL ADVERSE EFFECT" means, in connection with the
Company or any of its Subsidiaries, any change or effect that is
materially adverse to the business, results of operations,
properties (including intangible properties), condition
(financial or otherwise), prospects or assets or liabilities of
the Company and its Subsidiaries taken as a whole.
"MATERIALS OF ENVIRONMENTAL CONCERN" means hazardous
substances as defined under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601 ET
SEQ. and hazardous wastes as defined under the Resource
Conservation and Recovery Act, 42 U.S.C. 6901, ET SEQ. and
petroleum and petroleum products and such other chemicals,
materials or substances as are listed as "hazardous wastes",
"hazardous materials", "toxic substances", or words of similar
import under any similar federal, state, local or foreign laws.
"NYSE" means the New York Stock Exchange.
"PERSON" means an individual, partnership, corporation,
limited liability company, trust or unincorporated organization,
or a government or agency or subdivision thereof.
"PREFERRED STOCK" means the Series B Convertible
Preferred Stock of the Company, par value $.01 per share, having
a liquidation preference of $1000 per share and such other rights
and preferences as are set forth in the Certificate of
Designations.
"PROSPECTUS" means the prospectus included in any
Registration Statement, as amended or supplemented by any
Prospectus supplement, including post-effective amendments, and
all material incorporated by reference in such Prospectus.
"PURCHASE PRICE" has the meaning set forth in Section
2.1 hereof.
"REGISTRATION RIGHTS AGREEMENT" means the Registration
Rights Agreements to be entered into on the date hereof between
the Company and the Purchasers, substantially in the form
attached hereto as Exhibit B.
"REGISTRATION STATEMENT" means any registration
statement of the Company covering any shares of Common Stock to
be registered pursuant to the terms of the Registration Rights
Agreement.
"SALE CLOSING" has the meaning set forth in Section 2.2
hereof.
"SALE TRANSACTION" shall have the meaning set forth in
the recitals hereto.
"SEC" means the United States Securities and Exchange
Commission.
"SEC DOCUMENTS" shall have the meaning set forth in
Section 3.9 hereof.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, together with the rules and regulations promulgated
thereunder.
"SECURITIES EXCHANGE ACT" means the Securities Exchange
Act of 1934, as amended, together with the rules and regulations
promulgated thereunder.
"SIGNIFICANT SUBSIDIARIES" has the meaning specified in
Regulation S-X promulgated under the Securities Exchange Act.
"SUBSIDIARY" means, with respect to any Person, any
corporation, limited or general partnership, trust, association
or other business entity of which 50% or more of the outstanding
Capital Stock or other interests entitled to vote in the election
of the board of directors of such corporation (irrespective of
whether, at the time, Capital Stock of any other class or classes
of such corporation shall have or might have voting power by
reason of the happening of any contingency), managers, trustees
or other controlling persons, or an equivalent controlling
interest therein, of such Person is, at the time, directly or
indirectly, owned by such Person and/or one or more Subsidiaries
of such Person.
"TAXES" means all taxes, charges, fees, levies, duties
or other assessments, including without limitation all net
income, gross income, gross receipts, franchise, value added,
sales, use, property, ad valorem, transfer, withholding, profits,
license, employee, payroll, social security, unemployment,
excise, estimated, severance and any other taxes, duties,
withholdings, fees, assessments or charges of any kind
whatsoever, including any interest, penalties or additional
amounts attributable thereto, imposed by any federal, state,
local or foreign taxing authority.
"TAX RETURN" means any report, return, information
statement or other information required to be supplied to any
federal, state, local or foreign taxing authority, or any
election permitted to be made, in connection with Taxes.
ARTICLE II
PURCHASE, SALE AND EXCHANGE OF SHARES
2.1. AGREEMENT TO PURCHASE AND SELL. Upon the terms and
subject to the conditions hereinafter set forth, the Purchasers
hereby, severally but not jointly, subscribe for and agree to
purchase from the Company, in the amount for each Purchaser set
forth opposite such Purchaser's name on Schedule 2.1, and the
Company agrees to issue and sell to the Purchasers in such
amounts, on the date hereof, an aggregate of 50,000 shares of
Preferred Stock (the "Preferred Stock") for an aggregate cash
price (the "Purchase Price") equal to $50,000,000.
2.2. SALE CLOSING. (a) The closing of the purchase
and sale of the Preferred Stock pursuant to Section 2.1 hereof
(the "Sale Closing") shall take place at the time of the
execution of this Agreement. The Sale Closing shall be held at
the offices of Xxxxxxx Xxxx & Xxxxx LLP, 900 Third Avenue, New
York, New York, or at such other place as the parties hereto
shall mutually agree.
(b) At the Sale Closing, (i) the Company shall deliver
to each Purchaser, against payment of the Purchase Price
therefor, one or more certificates for the shares of Preferred
Stock being purchased by such Purchaser, in definitive form and
registered in the name of such Purchaser or its nominee, which
name shall be designated in writing at least two (2) business
days prior to the Sale Closing, representing the Preferred Stock
being purchased by it, (ii) the Purchasers shall deliver to the
Company against delivery of the certificate or certificates
representing the Preferred Stock, by wire transfer to such
account as the Company shall designate in writing at least two
(2) business days prior to the Sale Closing, the Purchase Price
payable in immediately available funds, and (iii) each party to
this Agreement shall deliver to the other such other documents,
instruments and writings as may be required to be delivered in
accordance with this Agreement or as may be reasonably requested
by such other party.
ARTICLE III
REPRESENTATION AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the
Purchasers as follows:
3.1. CORPORATE ORGANIZATION. The Company and each of
its Subsidiaries is a corporation duly organized, validly
existing and, if applicable, in good standing under the laws of
its jurisdiction of incorporation, and has all requisite
corporate power and authority to own or lease and operate its
properties and to carry on its business as now being conducted,
and is duly qualified to do business and in good standing in each
jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing would not reasonably be expected to
have a Material Adverse Effect. The Company has made available
to the Purchasers or its agents complete and correct copies of
the Restated Certificate of Incorporation and by-laws of the
Company as in effect on the date hereof.
3.2. CAPITALIZATION. (a) The authorized Capital Stock
of the Company consists of (i) 100,000,000 shares of Common Stock
and (ii) 10,000,000 shares of preferred stock, par value $0.01
per share. As of September 30, 1996, there were (i) 32,508,000
shares of Common Stock issued and outstanding all of which are
duly authorized and validly issued, fully paid and nonassessable
and (ii) 5,200,000 shares of Common Stock reserved for issuance
pursuant to the terms of the 8 1/2% Convertible Subordinated
Notes Due 1999 of the Company (the "Notes"), 918,000 shares of
Common Stock reserved for issuance pursuant to the terms of the 5
5/8% Swiss Franc Exchangeable Certificates, 554,000 shares of
Common Stock reserved for issuance pursuant to the terms of the
5- 1/2% Bio Capital Holding certificates, 12,000 shares of the
Common Stock reserved for issuance pursuant to the terms of the
6_% Euro Bond certificates, 2,655,000 shares of Common Stock
reserved for issuance pursuant to the 1992 Employee Incentive
Stock Option Plan, 2,938,000 shares of Common Stock reserved for
issuance pursuant to the 1992 Non-Qualified Stock Option Plan
and the 1992 Non-Qualified Stock Option Plan, 2,938,000 shares
of Common Stock reserved for issuance pursuant to the 1994 Stock
Option Plan and 4,000,000 shares reserved for issuance pursuant
to the conversion rights and dividend obligations set forth in
the Certificate of Designations (and when so issued
all such shares will be validly issued, fully paid and
nonassessable). Immediately after the Sale Closing,
there will be 50,000 shares of preferred stock, par
value $0.01 per share, outstanding, all of which shall consist of
the Preferred Stock, and 1,000,000 shares of Series A
Participating Preferred Stock reserved for issuance pursuant to
the ICN Merger Corp. Rights Agreement, dated as of November 2,
1994, and no other class or series of preferred stock authorized,
issued or reserved for issuance. The Preferred Stock has been
duly authorized and upon payment therefore as provided in this
Agreement will be validly issued, fully paid and nonassessable.
The Company has not issued any Common Stock since September 30,
1996, except pursuant to the exercise of stock options and the
conversion of the Notes, nor has the Company since such date
repurchased or redeemed or acquired any such shares. No shares
of Capital Stock of the Company are entitled to preemptive
rights.
(b) Except as set forth in Section 3.2(a) above, the
Company does not have outstanding any Capital Stock or securities
convertible into or exchangeable for any shares of Capital Stock
and there will be no options, warrants or other rights,
agreements, arrangements or commitments of any character to which
the Company is a party or otherwise obligating the Company to
issue or sell or entitling any Person to acquire from the
Company, and the Company is not a party to any agreement,
arrangement or commitment obligating it to repurchase, redeem or
otherwise acquire, any shares of its Capital Stock or securities
convertible into or exchangeable for any of its Capital Stock.
(c) Upon delivery of the certificate(s) representing
the Preferred Stock, and payment of the Purchase Price therefor,
pursuant to the Sale Transaction in accordance with the terms of
this Agreement, the Company will transfer to the Purchasers good
and valid title to the Preferred Stock, free and clear of any
Lien, other than Liens, if any, created by the Purchasers.
3.3. SUBSIDIARIES. (a) Schedule 3.3 hereto sets forth
a list of all Subsidiaries of the Company showing, as to each
such Subsidiary, the jurisdiction of its organization, the number
of shares or other equity or ownership interests of each class of
its Capital Stock authorized and the amount of each class
outstanding, and the percentage of the outstanding shares or
other equity or ownership interests of each such class owned,
directly or indirectly, by the Company other than directors'
qualifying shares.
(b) On the date hereof, except as and to the extent
set forth in Schedule 3.3, (i) all the outstanding stock or other
equity or ownership interests of each Subsidiary, owned directly
or indirectly by the Company as shown on Schedule 3.3, is owned
free and clear of all Liens and is validly issued and (ii) there
are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which any
Subsidiary is a party or otherwise obligating any Subsidiary to
issue or sell, or entitling any Person to acquire from any
Subsidiary, and no Subsidiary is a party to any agreement,
arrangement or commitment obligating it to repurchase, redeem or
otherwise acquire, any shares of the Capital Stock or any
securities convertible into or exchangeable for the Capital Stock
of any such Subsidiary.
3.4. AUTHORIZATION. The Company has full corporate
power and authority to execute and deliver this Agreement, the
Registration Rights Agreement and the Certificate of Designations
and to consummate the transactions contemplated hereby and
thereby in accordance with the terms hereof and thereof and to
issue the Preferred Stock and the Common Stock issuable upon
conversion of or as dividends on the Preferred Stock in
accordance with the terms of the Certificate of Designations.
The execution and delivery of this Agreement and the Registration
Rights Agreement, the execution, delivery and filing of the
Certificate of Designations, the issuance of the Preferred Stock
and of the Common Stock issuable upon conversion of or as
dividends on the Preferred Stock have been duly authorized by the
Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to approve
and authorize the execution and delivery of this Agreement, the
Registration Rights Agreement, the execution, delivery and filing
of the Certificate of Designations, the issuance of the Preferred
Stock and the Common Stock issuable upon conversion of or as
dividends on the Preferred Stock and the consummation of the
transactions contemplated hereby and thereby in accordance with
the terms hereof and thereof, other than, in connection with the
issuance of Common Stock as dividends on Preferred Stock, the
declaration of such dividends and the determination to pay such
dividends with Common Stock by the Board of Directors of the
Company. This Agreement and the Registration Rights Agreement
have been duly executed and delivered by the Company, the
Certificate of Designations has been duly filed in accordance
with the Delaware General Corporation Law and the Preferred Stock
has been duly issued and each of this Agreement, the Registration
Rights Agreement and the Certificate of Designations constitute
valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except to the extent
limited by (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity.
3.5. NO VIOLATION; CONSENTS. (a) Assuming the making
or receipt of all filings, notices, registrations, consents,
approvals, permits and authorizations described in the following
paragraph, the execution and delivery of this Agreement and the
Registration Rights Agreement, the execution, delivery and filing
of the Certificate of Designations by the Company, the issuance
of the Preferred Stock and the Common Stock issuable upon
conversion of or as dividends on the Preferred Stock by the
Company, the consummation of the transactions contemplated
hereby, by the Registration Rights Agreement or by the
Certificate of Designations, the compliance by the Company with
any of the provisions hereof or of the Registration Rights
Agreement or the Certificate of Designations will not (i)
conflict with, violate or result in any breach of the Restated
Certificate of Incorporation, by-laws or other charter documents
of the Company or its Subsidiaries, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of
time or both) a default or give rise to any right of termination,
cancellation or acceleration under, or result in the creation of
any Lien on or against any of the properties of the Company or
any of its Subsidiaries pursuant to any of the terms or
conditions of any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which the Company
or any of its Subsidiaries is a party or by which any of them or
any of their properties or assets may be bound, or (iii) violate
any statute, law, rule, regulation, writ, injunction, judgment,
order or decree of any Governmental Entity, binding on the
Company or any of its Subsidiaries or any of their properties or
assets, excluding from the foregoing clauses (i) and (ii)
conflicts, violations, breaches, defaults, rights of termination,
cancellation or acceleration, and liens which, individually or in
the aggregate, would not have a Material Adverse Effect, would
not prevent or materially delay consummation of the transactions
contemplated hereby and would not affect the validity of the
issuance of the Preferred Stock or of the Common Stock issuable
upon conversion of or as dividends on the Preferred Stock.
(b) Except for (i) the filing of the Certificate of
Designations in accordance with the Delaware General Corporations
Law, (ii) applicable requirements, if any, under Blue Sky Laws
and (ii) the filing of a Registration Statement, no filing,
consent, approval, permit, authorization, notice, registration or
other action of or with any Governmental Entity, is required to
be made or obtained by or with respect to the Company or any of
its Subsidiaries in connection with the execution and delivery of
this Agreement and the Registration Rights Agreement by the
Company, the issuance of the Preferred Stock and the Common Stock
issuable upon conversion of or as dividends on the Preferred
Stock by the Company or the consummation by the Company of the
transactions contemplated hereby and thereby.
3.6. COMPLIANCE WITH APPLICABLE LAW. The businesses of
the Company are not being conducted in violation of any law,
ordinance, rule, regulation, judgment, decree or order of any
Governmental Entity, except for possible violations which,
individually or in the aggregate, would not have a Material
Adverse Effect. The Company and each of its Subsidiaries possess
all domestic and foreign governmental licenses, permits,
authorizations and approvals and have made all registrations and
given all notifications required under federal, state, local or
foreign law to carry on in all respects their businesses as
currently conducted, except as otherwise disclosed in writing by
the Company to the Purchasers on or prior to the date hereof, and
except where the failure to have any such licenses, permits,
authorizations or approvals, individually or in the aggregate,
would not have a Material Adverse Effect. Except as disclosed in
the June 30, 1996 Quarterly Report on Form 10-Q of the Company
(the "June 30 Form 10-Q") no investigation or review by any
Governmental Entity with respect to the Company or any of its
Subsidiaries is pending or, to the Knowledge of the Company,
threatened, other than those the outcome of which, individually
or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
3.7. COMPLIANCE WITH FOOD AND DRUG ACT.
(a) FDA PERMITS. The Company and each of its
Subsidiaries have all material licenses, permits, consents,
approvals and authorizations that are required under the Food and
Drug Act and any similar foreign law, rule or regulation
(collectively, the "FDA Permits") in connection with the conduct
of the businesses of the Company and each of its Subsidiaries.
The Company has obtained and owns or has the right to use the FDA
Permits in accordance with the terms thereof. Each FDA Permit is
valid and in full force and effect. The FDA Permits are
currently effective and sufficient for the operation of the
Company's businesses as currently conducted. All information
supplied by or on behalf of the Company and each of its
Subsidiaries to obtain or maintain each FDA Permit was, as of the
date given, true and complete in all material respects. The
Company and each of its Subsidiaries has complied in all material
respects with all conditions and requirements imposed by the FDA
Permits and the Company or its Subsidiaries has not received any
notice of cancellation, suspension or termination of any of the
FDA Permits and to the Knowledge of the Company no Governmental
Entity intends to cancel, suspend or terminate any of the FDA
Permits or that valid grounds for such cancellation, suspension
or termination exist.
(b) FOOD AND DRUG ACT. (i) The Company and each of
its Subsidiaries are in compliance in all material respects with
all applicable requirements of the Food and Drug Act and any
similar foreign law, rule or regulation, (ii) the Company's and
each of its Subsidiaries existing inventory of products held for
sale, and all products manufactured by the Company, any of its
Subsidiaries or any of the Company's Affiliates and sold within
the two (2) years preceding the date hereof, have been produced
in compliance in all material respects with all applicable
requirements of the Food and Drug Act and any similar foreign
law, rule or regulation, including, without limitation, all
"current good manufacturing practices" and similar requirements
thereunder and (iii) to the Knowledge of the Company there are no
events, conditions, circumstances, activities, practices,
incidents, actions or plans of the Company or any Subsidiary
which is likely to interfere with or prevent the Company's or any
of its Subsidiaries continued compliance with all applicable
requirements of the Food and Drug Act or any similar foreign law,
rule or regulation, or which may give rise to any common law or
legal liability of the Company or any Subsidiary under, or
otherwise form the basis of any Lien or any claim, action, suit,
arbitration, inquiry, proceeding or investigation by or before
any Governmental Entity based on or related to, the Food and Drug
Act or any similar foreign law, rule or regulation, other than
those the outcome of which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse
Effect.
3.8. LITIGATION. Except as disclosed in the June 30
Form 10-Q, there is no claim, action or proceeding (including any
condemnation proceeding) pending or, to the Knowledge of the
Company, threatened against or relating to the Company or any of
its Subsidiaries by or before any Governmental Entity that if
adversely determined, individually or in the aggregate, would
have a Material Adverse Effect, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its
Subsidiaries that has had, or would reasonably be expected in the
future to have, a Material Adverse Effect or which might
materially adversely affect the transactions contemplated by this
Agreement. The Company does not believe at this time that the
matters disclosed in the June 30 Form 10-Q hereto would,
individually or in the aggregate, have a Material Adverse Effect.
3.9. (i) SEC DOCUMENTS, FINANCIAL STATEMENTS. The
Common Stock is registered pursuant to Section 12(g) of the
Securities Exchange Act and the Company has filed all reports,
schedules, forms, statements and other documents, together with
all exhibits, financial statements and schedules thereto required
to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act, including material
filed pursuant to Section 13(a) or 15(d), (all of the foregoing,
whether heretofore or hereafter filed with the SEC, and the
Registration Statement, when declared effective, being
hereinafter referred to as the "SEC Documents"). The Company has
not provided to the Purchasers any material information which,
according to applicable law, rule or regulation, should have been
disclosed publicly by the Company but which has not been so
disclosed, other than with respect to the transactions
contemplated by this Agreement. As of their respective dates,
the SEC Documents complied in all material respects with the
requirements of the Securities Exchange Act or the Securities
Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder and other federal, state and local laws,
rules and regulations applicable to such SEC Documents, and none
of the SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. As of the date of delivery by the Purchasers of the
prospectus contained in the Registration Statement in connection
with sales of Common Stock by the Purchasers, such prospectus
will comply in all material respects with the requirements of the
Securities Act and the rules and regulations of the SEC
promulgated thereunder, and other federal, state and local laws,
rules and regulations applicable to such prospectus. The
financial statements of the Company included (or incorporated by
reference) in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the SEC or other applicable
rules and regulations with respect thereto. Such financial
statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent
basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or
(ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary
statements) and fairly present in all material respects the
consolidated financial position of the Company and its
Subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit
adjustments).
(ii) During the three years preceding the date hereof,
the SEC has not issued an order preventing or suspending the use
of any prospectus relating to the offering of any shares of
Common Stock or instituted proceedings for that purpose.
3.10. NO UNDISCLOSED OR CONTINGENT LIABILITIES.
Neither the Company nor any of its Subsidiaries has any claims,
liabilities or obligations of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to
become due) that would be required to be reflected or reserved
against on a consolidated balance sheet of the Company and its
consolidated Subsidiaries under GAAP, except for claims,
liabilities or obligations (i) reflected or reserved against on
the Balance Sheet, (ii) disclosed in the Company's most recent
Form 10-K or any SEC Document filed subsequent to such Form 10-K
and prior to the date hereof or (iii) incurred by the Company or
any of its Subsidiaries since June 30, 1996 in the ordinary
course of business and consistent with past practice and that,
individually or in the aggregate, would not have a Material
Adverse Effect.
3.11. TAXES. The Company and its Subsidiaries have
timely filed all necessary Tax Returns and notices and have paid
all federal, state, county, local and foreign taxes of any nature
whatsoever for all the tax years through December 31, 1995
indicated on such Tax Returns as being due and payable, to the
extent such taxes have become due (other than taxes which are
being challenged in good faith by the Company and are adequately
reserved for). There are no tax deficiencies which would
reasonably be expected to have a Material Adverse Effect; the
Company and its Subsidiaries have paid all Taxes which have
become due, whether pursuant to any assessments, or otherwise,
and there is no further liability (whether or not disclosed on
such returns) or assessments for any such Taxes, and no interest
or penalties accrues or accruing with respect thereto, except as
may be set forth or adequately reserved for in the financial
statements included in the SEC Documents; the amounts currently
set up as provisions for Taxes or otherwise by the Company and
its Subsidiaries on their books and records are sufficient in
all material respects for the payment of all their unpaid
federal, foreign, state, county and local taxes accrued through
the dates as of which they speak, and for which the Company and
its Subsidiaries may be liable in their own right, or as
transferee of the assets of, as successor to any other
corporation, association, partnership, joint venture or other
entity.
3.12. EMPLOYEE BENEFIT PLANS. (a) All employee
benefit plans and other benefit arrangements covering the
employees of the Company and its Subsidiaries (the "Benefit
Plans") comply, to the extent applicable, in all material
respects with the requirements of ERISA and the Code, and any
Benefit Plan intended to be qualified under Section 401(a) of the
Code has been determined by the Internal Revenue Service to be so
qualified. No Benefit Plan is covered by Title IV of ERISA or
Section 412 of the Code. Neither a Benefit Plan nor the Company
has incurred any liability or penalty under Section 4975 of the
Code or Section 502(I) of ERISA. Each Benefit Plan has been
maintained and administered in all material respects in
compliance with its terms, ERISA and the Code to the extent
applicable thereto. There are no pending or, to the Knowledge of
the Company, anticipated material claims against or otherwise
involving any of the Benefit Plans and no suit, action or other
litigation (excluding claims incurred in the ordinary course of
Benefit Plan activities) has been brought against or with respect
to any such Benefit Plan, except for any of the foregoing which
would not have a Material Adverse Effect. All material
contributions required to be made as of the date hereof to the
Benefit Plans have been made or provided for. Neither the
Company nor any entity under "common control" with the Company
within the meaning of ERISA Section 4001 has contributed to, or
been required to contribute to, any "multi-employer plan" (as
defined in Section 3(37) and 4001(a)(3) of ERISA). The Company
does not maintain or contribute to any plan or arrangement which
provides or has any liability to provide life insurance, medical
or other employee welfare benefits to any employee or former
employee upon his retirement or termination of employment and it
has never represented, promised or contracted (whether in oral or
written form) to any employee or former employee that such
benefits would be provided. The execution of, and the
performance of the transactions contemplated in, this Agreement,
the Registration Rights Agreement and the Certificate of
Designations will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any
Benefit Plan, policy, arrangement or agreement or any trust or
loan that will or may result in any payment (whether of severance
pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligations to
fund benefits with respect to any employee.
(b) Each Benefit Plan that is not subject to United
States law (a "Foreign Plan") is now and has been operated in all
material respects in compliance with all applicable non-United
States laws, except for matters of non-compliance which
individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect. The fair market value of the
assets of each Foreign Plan (or the liability of each insurer for
any Foreign Plan funded through insurance) is sufficient to
procure or provide for the benefits accrued thereunder through
the date hereof according to the actuarial assumptions and
valuations most recently used to determine employer contributions
to the Foreign Plan, except insufficiencies that would not
reasonably be expected to have a Material Adverse Effect.
3.13 ABSENCE OF CERTAIN CHANGES. Except as set forth
in any SEC Document filed by the Company prior to the date
hereof, since the Balance Sheet Date the business of the Company
and its Subsidiaries has been conducted in the ordinary course
consistent with past practices and there has not been:
(i) any event, occurrence, development or state
of circumstances or facts which, individually or in the
aggregate, has had or would reasonably be expected to have a
Material Adverse Effect;
(ii) any declaration, setting aside or payment of
any dividend or other distribution with respect to any
shares of Capital Stock of the Company, other than the
normal quarterly dividend of the Company, or any repurchase,
redemption or other acquisition by the Company or any
Subsidiary of any outstanding shares of Capital Stock or
other securities of, or other ownership interests in, the
Company or any Subsidiary;
(iii) any amendment of any material term of
any outstanding security of the Company or any Subsidiary;
(iv) any incurrence, assumption or guarantee by
the Company or any Subsidiary of any indebtedness for
borrowed money, other than working lines of credit,
borrowings under existing lines of credit and the assumption
or guarantee of debt in connection with the acquisitions
described in the Registration Statement on Form S-3
originally filed by the Company with the SEC on October 4,
1996 (the "October Registration Statement");
(v) any creation or assumption by the Company or
any Subsidiary of any Lien on any material asset other than
in the ordinary course of business consistent with past
practice and other than in connection with the acquisitions
disclosed in the October Registration Statement;
(vi) other than in connection with Investments (as
defined in the Certificate of Designations) not exceeding in
the aggregate $1,000,000, any making of any loan, advance or
capital contributions to or investment in any Person other
than loans, advances or capital contributions to or
investments in wholly-owed Subsidiaries made in the ordinary
course of business consistent with past practice;
(vii) any damage, destruction or other
casualty loss (whether or not covered by insurance)
affecting the business or assets of the Company or any
Subsidiary which, individually or in the aggregate, has had
or would reasonably be expected to have a Material Adverse
Effect;
(viii) any transaction or commitment made, or
any contract or agreement entered into, by the Company or
any Subsidiary relating to its assets or business (including
the acquisition or disposition of any assets) or any
relinquishment by the Company or any Subsidiary of any
contract or other right, in either case, material to the
Company and the Subsidiaries, taken as a whole, other than
transactions and commitments in the ordinary course of
business consistent with past practice and those
contemplated by this Agreement; or
(ix) any change in any method of accounting or
accounting practice by the Company or any Subsidiary.
3.14. ENVIRONMENTAL MATTERS. (a) The Company and its
Subsidiaries have obtained all permits, licenses and other
authorizations, and have made all registrations and given all
notifications, that are required with respect to the operation of
their respective businesses under all applicable Environmental
Laws other than those permits, licenses, other authorizations,
registrations and notifications the failure of which to obtain or
make, individually or in the aggregate, would not have a Material
Adverse Effect.
(b) The Company and its Subsidiaries are in compliance
in all material respects with all terms and conditions of the
required permits, licenses and other authorizations referred to
in paragraph (a) above, and are also in compliance in all
material respects with any other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws or
contained in any regulation, code, plan, order, decree, judgment,
injunction, settlement agreement, notice or demand letter issued,
entered, promulgated or approved thereunder, other than where the
failure to be in such compliance, individually or in the
aggregate, would not have a Material Adverse Effect.
(c) There is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter (collectively
"Actions") pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries
relating in any way to Environmental Laws or any regulation,
code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder other
than Actions that, if determined adversely to the Company or such
Subsidiaries, would not reasonably be expected to have a Material
Adverse Effect.
3.15 MATERIAL CONTRACTS. (a) Except as filed as an
exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 or as disclosed in Schedule 3.15, neither
the Company nor any Subsidiary is a party to or bound by:
(i) any partnership, joint venture or other
similar agreement or arrangement material to the Company and
its Subsidiaries taken as a whole ;
(ii) any agreement relating to any material
acquisition or disposition of any business material to the
Company and its Subsidiaries taken as a whole (whether by
merger, sale of stock, sale of assets or otherwise) under
which the Company has continuing material obligations;
(iii) any agreement relating to indebtedness
for borrowed money or the deferred purchase price of
property (in either case, whether incurred, assumed,
guaranteed or secured by any asset), except any such
agreement with an aggregate outstanding principal amount not
exceeding $5,000,000 and which may be prepaid on not more
than 30 days notice without the payment of any penalty;
(iv) any material license, supply or similar
agreement material to the Company and its Subsidiaries taken
as a whole; or
(v) any other agreement, arrangement or plan of a
type that would be required to be filed as an exhibit to the
Company's Annual Report on Form 10-K if such Annual Report
were filed on the date hereof (all of the foregoing,
"Material Contracts").
(b) Each Material Contract is in full force and effect
and constitutes a legal, valid and binding obligation of the
Company or the Subsidiary party thereto and, to the Knowledge of
the Company, each other party thereto, and is enforceable against
the Company or its Subsidiaries and, to the Knowledge of the
Company, each other party thereto in accordance with its terms,
except to the extent that such enforceability is limited by (i)
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general
principles of equity, and neither the Company nor any of its
Subsidiaries, nor, to the Knowledge of the Company, any other
party thereto is in conflict therewith or in violation or breach
thereof or default thereunder, except for such conflicts,
violations, breaches and defaults which, individually or in the
aggregate, would not have a Material Adverse Effect.
3.16. PROPERTIES; ENCUMBRANCES. Subject to the
next succeeding sentence each of the Company and its Subsidiaries
have good and valid title, and in the case of real property,
marketable title, to all material properties and assets which it
purports to own (real, personal and mixed, tangible and
intangible, including all forms of goodwill, rights, intellectual
property and intellectual property rights)(collectively, the
"Company Assets"), including, without limitation, all the
material properties and assets reflected on the Balance Sheet
(except for (i) real and personal property sold since the date of
the Balance Sheet or which was obsolete or no longer useful in
connection with the businesses of the Company and its
Subsidiaries and (ii) capital leases reflected on the Balance
Sheet), and all material properties and assets purchased by the
Company and its Subsidiaries since the date of the Balance Sheet.
All Company Assets are free and clear of all liens, mortgages,
claims, interests, charges, security interests or other
encumbrances or adverse interests of any nature whatsoever and
other title or interest retention arrangements ("Liens"), except
(a) as reflected on the Balance Sheet, (b) as set forth on
Schedule 3.16, (c) statutory Liens of carriers, warehousemen,
mechanics, workmen and materialmen for liabilities and
obligations incurred in the ordinary course of business
consistent with past practice that are not yet delinquent or are
being contested in good faith, (d) such defects, irregularities,
encumbrances and other imperfections of title as normally exist
with respect to property similar in character and that,
individually or in the aggregate together with all other such
exceptions, do not have a Material Adverse Effect, (e) Liens for
Taxes and (f) Liens that do not interfere with the present use of
the property subject to the Lien.
3.17. INSURANCE. All current primary, excess and
umbrella policies of insurance owned or held by or on behalf of
or providing insurance coverage to the Company or any of its
Subsidiaries are in full force and effect. With respect to all
such insurance policies providing insurance coverage to the
Company or any of its Subsidiaries, no premiums are in arrears,
no notice or cancellation or termination has been received with
respect to any such policy, other than notices of cancellation or
termination routinely sent at the end of a policy term. The
Company believes that the insurance coverage of the Company and
its Subsidiaries is consistent with the coverage generally
maintained by corporations of similar size and engaged in similar
lines of business except that the Company generally self-insures
against potential product liability exposure with respect to its
marketed products.
3.18. EMPLOYEE CLAIMS; LABOR MATTERS. (a) There
are no claims or actions pending or, to the Knowledge of the
Company, threatened between the Company or any of its
Subsidiaries and any of their respective employees or former
employees that would, or would be reasonably likely to,
individually or in the aggregate, have a Material Adverse Effect.
(b) There are no unfair labor practice complaints
pending against the Company or any of its Subsidiaries before the
National Labor Relations Board or any union representation
questions involving employees of the Company or any of its
Subsidiaries that would, individually or in the aggregate, have a
Material Adverse Effect. To the Knowledge of the Company there
are no strikes, slowdowns, work stoppages or lockouts, or threats
thereof, by or with respect to any employees of the Company or
any of its Subsidiaries that would, individually or in the
aggregate, have a Material Adverse Effect.
(c) The Company and each of its Subsidiaries is in
compliance in all material respects with the terms of any
collective bargaining agreements covering employees of the
Company or any Subsidiary, except for matters of non-compliance
which, individually or in the aggregate, would not be expected to
have a Material Adverse Effect. The terms and conditions of
employment for each employee of the Company or any of its
Subsidiaries complies in all material respects with the laws
applicable to the jurisdiction in which each employee works,
except for matters of non-compliance which, individually or in
the aggregate, would not be expected to have a Material Adverse
Effect.
3.19. MATERIAL DISCLOSURE. To the Knowledge of the
Company, there is no fact, transaction or development which the
Company has not disclosed to the Purchasers in writing (including
pursuant to the SEC Documents filed prior to the date hereof and
pursuant to the Form S-1 originally filed by the Company on
September 14, 1994, as amended (File No. 33-83952), the
Registration Statement on Form S-3 originally filed by the
Company on August 22, 1996 (File No. 333-10661) and the October
Registration Statement) which would reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect. This Agreement (including any Exhibit or Schedule
hereto) and any written statements, documents or certificates
furnished to the Purchasers by the Company or its Subsidiaries
prior to the date hereof in connection with the transactions
contemplated hereby, taken as a whole, do not and will not
contain any untrue statement of a material fact or omit to state
a material fact required to be stated herein or therein or
necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
3.20. BROKERS. The Purchasers shall not be
responsible for any fees of any broker, finder, commission agent
or other Person incurred by the Company in connection with this
Agreement and the transactions contemplated hereby.
3.21. INTELLECTUAL PROPERTY. The Company and its
Subsidiaries own or possess adequate patent rights or licenses or
other rights to use patent rights, inventions, trademarks,
service marks, trade names and copyrights necessary to conduct
the general business now operated by them and neither the Company
nor any of its Subsidiaries has received any notice of
infringement or conflict with asserted rights of others with
respect to any patent, patent rights, inventions, trademarks,
service marks, trade names or copyrights which, individually or
in the aggregate, would reasonably be expected to have a Material
Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS
Each Purchaser hereby, severally but not jointly,
represents and warrants to the Company as follows:
4.1. ORGANIZATION; AUTHORIZATION. Such Purchaser is
duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has full power and
authority to execute and deliver this Agreement and the
Registration Rights Agreement, to purchase the Preferred Stock
and to consummate the transactions contemplated hereby and
thereby in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the Registration
Rights Agreement, the purchase by such Purchaser of the Preferred
Stock and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by such Purchaser,
and no other proceedings on the part of such Purchaser are
necessary to approve and authorize the execution and delivery of
this Agreement and the Registration Rights Agreement, the
purchase by such Purchaser of the Preferred Stock and the
consummation of the transactions by such Purchaser contemplated
hereby and thereby in accordance with the terms hereof and
thereof. This Agreement and the Registration Rights Agreement
constitute valid and binding agreements of such Purchaser,
enforceable against such Purchaser in accordance with their
terms, except to the extent limited by (i) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or
similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity.
4.2. NO VIOLATION; CONSENTS. (a) Assuming the making
or receipt of all filings, notices, registrations, consents,
approvals, permits and authorizations described in the following
paragraph, neither the execution and delivery by such Purchaser
of this Agreement and the Registration Rights Agreement, nor the
purchase by such Purchaser of the Preferred Stock nor the
consummation by such Purchaser of the transactions contemplated
hereby or thereby will (i) conflict with, violate or result in a
breach of the agreement of limited partnership or other governing
documents of such Purchaser, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or
both) a default or give rise to any right of termination,
cancellation or acceleration under, or result in the creation of
any Lien on or against any of the properties of such Purchaser
pursuant to, any of the terms or conditions of any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation to which such Purchaser is a party or by which it or
any of its properties or assets may be bound, or (iii) violate
any statute, law, rule, regulation, writ, injunction, judgment,
order or decree of any Governmental Entity, binding on such
Purchaser or any of its properties or assets, excluding from the
foregoing clause (ii) violations, breaches and defaults that
individually or in the aggregate, would not prevent or materially
delay consummation of or justify recission of the transactions
contemplated hereby.
(b) Except for the filing of a Registration Statement
for the resale of the Common Stock contemplated by the
Registration Rights Agreement, no filing, consent, approval,
permit, authorization, notice, registration or other action of or
with any Governmental Entity is required to be made or obtained
by or with respect to such Purchaser in connection with the
execution and delivery of this Agreement and the Registration
Rights Agreement, the purchase of the Preferred Stock or the
consummation by such Purchaser of the transactions contemplated
hereby and thereby.
4.3. FUNDS. Such Purchaser has the funds necessary to
consummate the purchase of the Preferred Stock to be purchased by
it hereunder.
4.4. STATUS. Such Purchaser is a sophisticated
investor (as described in Rule 506(b)(2)(ii) of Regulation D
promulgated under the Securities Act ("Regulation D")) and an
accredited investor (as defined in Rule 501 of Regulation D), and
such Purchaser has such experience in business and financial
matters so that it is capable of evaluating the merits and risks
of an investment in the Preferred Stock . Such Purchaser
acknowledges that the Preferred Stock are speculative and involve
a high degree of risk.
4.5 INVESTMENT REPRESENTATION. Such Purchaser is
purchasing the Preferred Stock for its own account. Such
Purchaser has no present intention to sell any Preferred Stock or
the Common Stock received upon conversion of or as dividends on
the Preferred Stock in accordance with the terms of the
Certificate of Designations, and such Purchaser has no present
arrangement (whether or not legally binding) at any time to sell
Preferred Stock or such Common Stock to or through any Person or
entity; PROVIDED, HOWEVER, that by making the representations
herein, no Purchaser agrees to hold the Preferred Stock or the
Common Stock received upon conversion of the Preferred Stock in
accordance with the terms of the Certificate of Designations for
any minimum or other specific term and each Purchaser reserves
the right to dispose of all Preferred Stock or Common Stock at
any time in accordance with Federal securities laws applicable to
any such disposition.
ARTICLE V
COVENANTS OF THE COMPANY
5.1. SECURITIES COMPLIANCE.
(a) The Company shall take all necessary action and
proceedings as may be required and permitted by applicable law,
rule and regulation for the legal and valid issuance of the
Preferred Stock to the Purchasers.
(b) The Company will cause the Common Stock to
continue to be registered under Sections 12(b) or 12(g) of the
Securities Exchange Act (or successor provision of such act or
successor act), will comply in all material respects with its
reporting and filing obligations pursuant to the Securities
Exchange Act, and will not take any action to terminate or
suspend its reporting and filing obligations under the Securities
Exchange Act. The Company will take all action necessary to
continue the listing or trading of the Common Stock on the NYSE
or on the NASDAQ National Market System; and will comply in all
material respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the NYSE or the NASDAQ
National Market System.
ARTICLE VI
ADDITIONAL AGREEMENTS OF THE PARTIES
6.1. DISCLOSURE AND PUBLIC ANNOUNCEMENTS. (a) The
Company shall not disclose the identity of the Purchasers or the
Person or Persons for whom the Purchasers act as nominee in any
document, except where such disclosure is (i) required by law or
court order, (ii) required by the rules and regulations of the
SEC, (iii) required by the rules and regulations of the NYSE,
(iv) subsequent to the disclosure of such information by the
Purchasers or (v) approved by the Purchasers. If such disclosure
(other than under clause (ii) above) is required by law or court
order, the Company shall, to the extent it is reasonably able,
notify the Purchasers prior to making such disclosure.
(b) Except as may be otherwise required by law, the
Purchasers and the Company shall consult with each other before
issuing any press release or otherwise making any public
statements with respect to this Agreement and shall not issue any
such press release or make any such public statement prior to
such consultation.
6.2. RESTRICTIVE LEGEND. Each certificate representing
the Preferred Stock shall contain a legend relating to
restrictions on resale arising under the Securities Act and Blue
Sky Laws substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS AND MAY
NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT
HAS BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
6.3. DAILY LOW PRICE. Each Purchaser covenants and
agrees that it will not, directly or through any Affiliate,
create any daily low price in the Common Stock.
6.4. OTHER OFFERINGS. (a) During the period
expiring 90 days following the date hereof (the "Block Period"),
the Company will not offer, sell, contract to sell or otherwise
dispose of any common stock, preferred stock convertible into
common stock, any debt or warrant convertible into or
exchangeable or exercisable for, or other right to purchase, any
common stock singly or together with other securities or rights
at an effective discount to the purchaser thereof from the then
Current Market Price Per Common Share (as defined in the
Certificate of Designations), unless (i) the aggregate amount of
all such offers, sales, contracts to sell or other dispositions
does not exceed $5,000,000 during the Block Period, (ii) any such
offer of sale is as consideration for an acquisition by the
Company or one of its Subsidiaries or (iii) any such offer or
sale is consistent with the provisions of paragraphs (8)(e)(y)
and (9)(d)(iii) of the Certificate of Designations.
(b) For a period of one year following the date
hereof, if the Company offers, sells, contracts to sell or
otherwise issues any common stock, preferred stock convertible
into common stock, any debt or warrant convertible into or
exchangeable or exercisable for, or other right to purchase, any
common stock singly or together with other securities or rights
on terms more favorable than those contained in the Certificate
of Designations (a "New Issuance"), then the Company shall give
the Purchasers (and their transferees) within one Trading Day
following such New Issuance written notice of any such New
Issuance and shall provide with such notice copies of the
documentation, with the economic terms of the transaction
specified, pursuant to which the New Issuance was effected. Each
Purchaser (or transferee), by written notice executed by such
Purchaser (or transferee) within 60 days of any such New
Issuance, shall then have the right to exchange all, but not less
than all, of the Preferred Stock then held by such Purchaser (or
transferee) for securities of the Company having terms identical
to the terms of the securities in such New Issuance, except that
the mandatory conversion date for the new securities shall be the
Mandatory Conversion Date specified in the Certificate of
Designations (as may be extended from time to time as specified
herein). The Registration Rights Agreement shall be deemed
automatically amended to cover the resale of the Common Stock
issuable upon conversion of and as dividends or interest on the
new securities. To the extent required to permit the resale in
accordance with the Securities Act, upon the expiration of the 60
day period following a New Issuance the registration statement
for the Common Stock shall be amended or, if required by the
applicable regulations of the SEC, a new registration statement
shall be filed with the SEC to permit such resale.
ARTICLE VII
CONDITIONS TO THE SALE CLOSING
7.1. CONDITIONS TO OBLIGATIONS OF THE PURCHASERS UNDER
THE SALE CLOSING. The obligation of the Purchasers to purchase
the Preferred Stock hereunder pursuant to the Sale Transaction is
subject to the satisfaction or waiver at, or prior to, the Sale
Closing of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES; AGREEMENTS AND
COVENANTS. (i) The representations and warranties of the
Company contained in this Agreement and in any certificate or
agreement of the Company delivered pursuant hereto shall be true
and correct in all material respects as of the date hereof, (ii)
the Company shall have performed or complied with in all material
respects all agreements and covenants contained in this Agreement
and in any certificate or agreement of the Company delivered
pursuant hereto to be performed or complied with by the Company
at or before the Sale Closing, and (iii) the Purchasers shall
have received a certificate of the Company, signed by the
President or a Vice President thereof, on behalf of the Company,
as to the fulfillment of the conditions set forth in the
foregoing clauses (i) and (ii).
(b) PRINCIPAL MARKET. Trading in the Common Stock
shall not have been suspended by the SEC or the NYSE, (expect for
any suspension of trading of limited duration agreed to between
the Company and the NYSE, solely to permit dissemination of
material information regarding the Company), and trading in
securities generally as reported by NYSE shall not have been
suspended or limited or minimum prices shall not have been
established on securities whose trades are reported by the NYSE.
(c) LITIGATION. There shall have been no order or
preliminary or permanent injunction entered in any action or
proceeding before any Governmental Entity, nor other action taken
by any Governmental Entity, nor any statute, rule, regulation,
legislation, interpretation, judgment or order enacted, entered,
enforced, promulgated, amended, issued or deemed applicable to
the Purchasers, the Company or any of its Subsidiaries, by any
Governmental Entity that shall have remained in effect and that
in the good faith judgment of a majority of the Purchasers shall
have had, or threaten to have or would be reasonably likely to
have the effect of (i) making illegal, materially delaying or
otherwise directly or indirectly prohibiting or materially
restraining or making materially more costly the Sale
Transaction, (ii) prohibiting or materially limiting the
ownership or operation by the Company or any of its Subsidiaries
of all or any material portion of its respective businesses or
assets, or compelling the Company or any of its Subsidiaries to
dispose of or hold separate all or any material portion of its
respective businesses or assets, (iii) imposing or confirming
material limitations on the ability of the Purchasers to
effectively exercise full rights of ownership of the Preferred
Stock to be acquired pursuant to this Agreement, including,
without limitation, the right to vote any Common Stock
subsequently acquired upon conversion of or as dividends on the
Preferred Stock on all matters properly presented to
stockholders; (iv) requiring divestiture by the Purchasers of any
of the Preferred Stock; or (v) causing a Material Adverse Effect.
(d) NO ACTION OR PROCEEDING. No action, suit, claim
or proceeding by or before any Governmental Entity shall have
been commenced and be pending that seeks to have, or is
reasonably likely to have, any of the effects described in
clauses (i) through (v) of Section 7.1(c) above.
(e) BANKRUPTCY; INSOLVENCY; ETC. The Company or any
of its Subsidiaries shall not be the subject of a case under the
Bankruptcy Code, and no proceeding shall have been instituted
(and not dismissed) or consented to by or against the Company or
any of its Subsidiaries seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding-up, reorganization,
arrangement, adjustment, protection, relief or composition of its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief or debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee,
custodian or other similar official for any of the Company or of
its Subsidiaries or any substantial part of any of their property
and neither the Company nor any of its Subsidiaries shall have
taken any corporate action to authorize any such proceeding.
(f) MATERIAL ADVERSE CHANGE. No change, condition or
event shall have occurred that has had, or would be reasonably
likely to have, a Material Adverse Effect.
(g) OPINION OF COUNSEL, ETC. The Purchasers shall
have received a written opinion in form and substance (including
qualifications) satisfactory to the Purchasers, dated the date
hereof, from 1) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx and 2)
Xxxxx X. Xxxx, Esq., substantially in the forms of Exhibits C-1
and C-2 hereto, and such other certificates, opinions of other
counsel, and documents, as the Purchasers or their counsel shall
reasonably require.
(h) REGISTRATION RIGHTS AGREEMENT. The Registration
Rights Agreement shall have been duly executed and delivered by
the Company and the other parties thereto, if any, other than the
Purchasers.
7.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligation of the Company to issue and sell the Preferred Stock
hereunder pursuant to the Sale Transaction is subject to the
satisfaction or waiver at, or prior to, the Sale Closing of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES, AGREEMENTS AND
COVENANTS. (i) The representations and warranties of the
Purchasers contained in this Agreement and in any certificate or
agreement of the Purchasers delivered pursuant hereto shall be
true and correct in all material respects as of the date hereof
and (ii) the Purchasers shall have performed or complied with in
all material respects all agreements and covenants contained in
this Agreement and in any certificate or agreement of the
Purchasers delivered pursuant hereto to be performed or complied
with by the Purchasers, at or before the Sale Closing.
(b) LITIGATION. There shall have been no order or
preliminary or permanent injunction entered in any action or
proceeding before any Governmental Entity, nor other action taken
by any Governmental Entity nor any statute, rule, regulation,
legislation, interpretation, judgment or order enacted, entered,
enforced, promulgated, amended, issued or deemed applicable to
the Company or any of its Subsidiaries by any Governmental Entity
that shall have remained in effect and that shall have had the
effect of making illegal, materially delaying or otherwise
directly or indirectly prohibiting or materially restraining or
making materially more costly the Sale Transaction.
ARTICLE VIII
MISCELLANEOUS
8.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties, covenants and
agreements contained in this Agreement shall survive the
execution of this Agreement until the date that the Purchasers
have sold or otherwise disposed of all shares of Preferred Stock
and Common Stock issuable on conversion of or as dividends on the
Preferred Stock.
8.2. NOTICES. Any notices or other communications
required or permitted pursuant to this Agreement, the
Registration Rights Agreement or the Certificate of Designations,
shall be given in writing and shall be delivered by facsimile
transmission to the below listed facsimile numbers, with a
confirmation of such facsimile transmission sent by certified or
registered mail, postage prepaid, to the following addresses:
If to the Purchasers:
At their facsimile number and address specified on
Annex A hereto
Copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
If to the Company:
ICN Pharmaceuticals, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
Copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, X.X. 00000
Fax No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
and thereafter at such other facsimile number or address, notice
of which has been given in accordance with this Section 8.2.
Each such notice or communication shall be deemed to be effective
when such facsimile transmission is transmitted to the facsimile
number specified in this Section 8.2 and the appropriate
answerback is received.
8.3. COMPLETE AGREEMENT. This Agreement, the
Registration Rights Agreement, the Certificate of Designations
and that certain Letter Agreement, dated as of July 26, 1996,
between the Company and Xxxxxxx Xxxx and Xxxxx LLP, as amended by
the Amendment to Letter Agreement dated as of August 30, 1996
(the "SRZ Letter Agreement"), contain the entire understanding of
the parties with respect to the transactions contemplated hereby
and supersede all prior agreements, arrangements or
understandings with respect thereto. There are no restrictions,
agreements, promises, representations, warranties, covenants or
undertakings by or on behalf of any party hereto with respect to
the transactions contemplated hereby or thereby, other than those
expressly set forth herein or therein.
8.4. BINDING NOTICE OF AGREEMENT; NO THIRD PARTY
BENEFICIARY. This Agreement shall be binding upon and inure to
the benefits of the parties hereto, their successors and
permitted assigns. Nothing herein express or implied is intended
to or shall be construed to confer upon or give to any Person,
corporation, group or other entity (of any nature) other than the
parties hereto, their successors or permitted assigns any rights
or remedies under or by reason of this Agreement.
8.5. MODIFICATIONS, AMENDMENTS AND WAIVERS. Any term
or provision of this Agreement may be waived by the party which
is entitled to the benefits thereof. No waiver shall be deemed
to have been made by any party hereto of any of its rights
hereunder or any provision or term hereof unless the same shall
be in writing and is signed on its behalf by its authorized
officer or representative. Any such waiver or extension shall
constitute a waiver or extension only with respect to the
specific matter described in such writing and shall in no way
impair the rights of the party granting such waiver in any other
respect or any other time. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate
as a waiver thereof. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that
any party may otherwise have in law or equity. The rights and
remedies of any party based upon, arising out of or otherwise in
respect of any inaccuracies in or breach of any representation,
warranty, covenant or agreement contained in this Agreement shall
in no way be limited by the fact that the act, omission,
occurrence or other state of fact upon which any claim of any
such inaccuracy or breach is based may also be the subject matter
of any other representation, warranty, covenant or agreement
contained in this Agreement as to which there is no inaccuracy or
breach. The representations and warranties of the Company
contained in this Agreement shall not be affected or deemed
waived by reason of any investigation made by or on behalf of the
Purchasers or its representatives or by reason of the fact that
the Purchasers or such representatives knew or should have known
that any such representation or warranty is or might be
inaccurate. The Company shall not offer, or agree to pay, any
fee or other consideration to any Purchaser, in connection with
any amendment or waiver of any provision of this Agreement, the
Registration Rights Agreement or the Certificate of Designations
unless such amendment or waiver relates solely to the rights of
remedies of such Purchaser and does not adversely affect any
rights or remedies of any other holder of Preferred Stock or such
fee or other consideration is offered and paid to all Purchasers
pro-rata to their holdings of Preferred Stock. In addition, the
Company shall not directly or indirectly repurchase or retire any
Preferred Stock (other than pursuant to the terms of the
Certificate of Designations) except on terms and conditions
offered to all Purchasers pro-rata to their holdings of Preferred
Stock.
8.6. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which shall be considered one
and the same agreement and each of which shall be deemed an
original.
8.7. EXPENSES. The fees and expenses of counsel for
the Purchasers shall be paid by the Company pursuant to the terms
of the SRZ Letter Agreement. The foregoing payments shall be in
addition to, and not in lieu of, the fees and expenses of
counsel, other experts and the related expenses payable by the
Company to the holders of Preferred Stock pursuant to the terms
of the Registration Rights Agreement.
8.8 INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless each Purchaser, its directors and
officers and each Person, if any, who controls each Purchaser
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act from and against any
and all losses, claims, suits, damages, causes of action,
liabilities, costs and expenses (including, without limitation,
any legal or other expenses reasonably incurred in connection
with defending or investigating any such action or claim) to
which such Purchaser or other Person may become subject to under
the Securities Act or under the Securities Exchange Act or
otherwise, arising from or relating to the Company's breach of
any representation, warranty, covenant or agreement contained in
this Agreement.
(b) Each Purchaser agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors and
officers and each Person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section
20 of the Securities Exchange Act, from and against any and all
losses, claims, suits, damages, causes of action, liabilities,
costs and expenses (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending
or investigating any such action or claim) to which the Company
or such Person may become subject to under the Securities Act or
under the Securities Exchange Act or otherwise, arising from or
relating to the Purchasers' breach of any representation,
warranty, covenant or agreement contained in this Agreement.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in
respect of which indemnity may be sought pursuant to paragraph
(a) or (b) of this Section 8.8, such Person (the "indemnified
party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party shall retain counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such indemnified party
unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of other counsel or (ii)
the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing
interests between them; PROVIDED, HOWEVER, that it is understood
that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm
(in addition to one firm of local counsel in any jurisdiction)
for all indemnified parties, their directors, officers and all
Persons, if any, who control such indemnified parties within the
meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act. In the case of any such separate firm, such
firm shall be designated in writing by a majority of all the
indemnified parties. All such fees and expenses shall be
reimbursed as they are incurred; PROVIDED, HOWEVER, that if it is
subsequently determined that such indemnified party was not
entitled to such indemnification, then the indemnified party
shall promptly reimburse the indemnifying party for all such fees
and expenses previously paid by the indemnifying party. The
indemnifying party 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 judgment for the
plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by this
paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(d) The indemnity provisions contained in this Section
8.8 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 the Purchasers, its
officers or directors or any Person controlling the Purchasers;
or the Company, its officer or directors or any Person
controlling the Company and (iii) acceptance of any payment for
any of the Preferred Stock.
8.9. NOMINEE; BENEFITS. All references to Purchasers
in this Agreement shall include the Person or Persons for whom
the Purchasers are a nominee, and the benefits of and rights and
obligations under the Agreement shall accrue to such Person or
Persons which have a beneficial interest in the Preferred Stock
being acquired hereunder and for whom the Purchasers are a
nominee.
8.10. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York, without regard to applicable principles of
conflicts of law thereof.
8.11. HEADINGS. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
8.12. SEVERABILITY. Whenever possible, each
provision of this Agreement will be interpreted in such a manner
as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective
only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement, except to the
extent that such prohibition or invalidity would constitute a
material change in the terms of this Agreement taken as a whole.
8.13. ASSIGNMENT. The Purchasers may assign their
rights hereunder to any of their Affiliates, provided that such
assignment shall not release the Purchasers from their
obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
COMPANY:
ICN PHARMACEUTICALS, INC.
By:
-------------------------------
Name:
Title:
STOCK SUBSCRIPTION AGREEMENT
PURCHASER:
By:
----------------------
Name:
Title:
ANNEX A
NOTICES
CIBC Wood Gundy
Securities Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxx X. XxXxxxxx XX
Halifax Fund, L.P.
c/o The Palladin Group, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Ramius Fund Limited
c/o The Palladin Group, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Palladin Partners, L.P.
c/o The Palladin Group, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Gershon Partners, L.P.
c/o The Palladin Group, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Cerberus Partners, L.P.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Hare & Co.
c/o XxxXxx- Xxxxxxx
Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx Xxxxxx
Cypress & Co.
c/o XxxXxx- Xxxxxxx
Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx Xxxxxx
Daffodil & Co.
c/o XxxXxx- Xxxxxxx
Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxx Xxxxxx
EXHIBIT A
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES B
CONVERTIBLE PREFERRED STOCKEXHIBIT B
REGISTRATION RIGHTS AGREEMENT
EXHIBIT C-1
OPINION OF FRIED, FRANK, HARRIS, XXXXXXX & XXXXXXXX
EXHIBIT C-1
[Letterhead of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx]
October 9, 1996
To the Purchasers named in the
Stock Subscription Agreement dated
as of October 9, 1996, by and among
the Company and such Purchasers
Ladies and Gentlemen:
We have acted as special counsel for ICN
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), in
connection with the issuance by the Company of 50,000 shares of
its Series B Convertible Preferred Stock (the "Preferred Stock")
pursuant to the Stock Subscription Agreement (the "Agreement")
dated as of October 9, 1996 among you and the Company. This
opinion is delivered to you pursuant to Section 7.1.(g) of the
Agreement. All capitalized terms used herein that are defined
in, or by reference in, the Agreement have the meanings assigned
to such terms therein, or by reference therein, unless otherwise
defined herein. With your permission, all assumptions and
statements of reliance herein have been made without any
independent investigation or verification on our part except to
the extent otherwise expressly stated, and we express no opinion
with respect to the subject matter or accuracy of such
assumptions or items relied upon.
In connection with this opinion, we have (i)
investigated such questions of law, (ii) examined originals or
certified, conformed or reproduction copies of such agreements,
instruments, documents and records of the Company, such
certificates of public officials and such other documents, and
(iii) received such information from officers and representatives
of the Company as we have deemed necessary or appropriate for the
purposes of this opinion. We have examined, among other
documents, the following:
(a) the Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock
(the "Certificate of Designations");
(b) the Agreement; and
(c) the Registration Rights Agreement for Securities
(the "Registration Rights Agreement") dated as of
October 9,1996 among you and the Company.
The documents referred to in items (a) through (c)
above, inclusive, are referred to herein collectively as the
"Documents".
In all such examinations, we have assumed the legal
capacity of all natural persons executing documents, the
genuineness of all signatures, the authenticity of original and
certified documents and the conformity to original or certified
copies of all copies submitted to us as conformed or reproduction
copies. As to various questions of fact relevant to the opinions
expressed herein, we have relied upon, and assume the accuracy
of, representations and warranties contained in the Documents and
certificates and oral or written statements and other information
of or from representatives of the Company and others and assume
compliance on the part of all parties to the Documents with their
covenants and agreements contained therein. Insofar as
statements herein are based upon our knowledge, such phrase means
and is limited to the conscious awareness of facts or other
information by lawyers in this firm who gave substantive
attention to representation of the Company in connection with the
Agreement. With reference to our opinion in paragraph (vi)
below, our opinion is limited to our review of only those laws
and regulations that, in our experience, are normally applicable
to transactions of the type contemplated by the Documents.
To the extent it may be relevant to the opinions
expressed herein, we have assumed that the parties to the
Documents other than the Company have the power to enter into and
perform the Documents and to consummate the transactions
contemplated thereby and that the Documents have been duly
authorized, executed and delivered by, and constitute legal,
valid and binding obligations of, such parties. We have also
assumed that (1) sufficient authorized but unissued and
unreserved shares (other than shares reserved for this purpose)
of the Company's common stock, par value $0.01 per share ("Common
Stock"), will be available for issuance at the time of and for
use in connection with the issuance of Common Stock upon
conversion of or as dividends on the Preferred Stock, (2) the
Company will have sufficient surplus under the General
Corporation Law of the State of Delaware (the "DGCL") to declare
and pay dividends on the Preferred Stock or to redeem the
Preferred Stock in accordance with the terms of the Certificate
of Designations, and (3) in the case of a redemption of the
Preferred Stock, the capital of the Company will not be impaired
nor will the capital of the Company become impaired as a result
of such redemption. The payment of dividends on the Preferred
Stock is subject to the declaration of such dividends, and the
determination to pay such dividends in either cash or shares of
Common Stock, by the Board of Directors of the Company.
Based upon the foregoing, and subject to the
limitations, qualifications and assumptions set forth herein, we
are of the opinion that:
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the
laws of the State of Delaware, and has the
corporate power and authority to own, lease or
operate its properties and to conduct its business
as presently conducted.
(ii) The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock and
10,000,000 shares of preferred stock, par value
$0.01 per share.
(iii) The Company has all requisite corporate power
and authority to execute and deliver the
Agreement, the Registration Rights Agreement and
the Certificate of Designations and to consummate
the transactions contemplated thereby in
accordance with the terms thereof and to issue the
Preferred Stock and the Common Stock issuable upon
conversion of or as dividends on the Preferred
Stock in accordance with the terms of the
Certificate of Designations. The execution and
delivery of the Agreement and the Registration
Rights Agreement, the execution, delivery and
filing of the Certificate of Designations and the
issuance of the Preferred Stock and of the Common
Stock issuable upon conversion of the Preferred
Stock have been duly authorized by the Board of
Directors of the Company and no other corporate
proceedings on the part of the Company are
necessary to approve and authorize the execution
and delivery of the Agreement and the Registration
Rights Agreement, the execution, delivery and
filing of the Certificate of Designations, the
issuance of the Preferred Stock and the Common
Stock issuable upon conversion of the Preferred
Stock and the consummation of the transactions
contemplated by the Agreement, the Registration
Rights Agreement and the Certificate of
Designations in accordance with the terms thereof.
The Agreement and the Registration Rights
Agreement have been duly executed and delivered by
the Company, the Certificate of Designations has
been duly executed and filed by the Company in
accordance with the DGCL and each of the Agreement
and the Registration Rights Agreement constitute
valid and binding obligations of the Company
enforceable against the Company in accordance with
their terms, subject to (x) bankruptcy,
insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereafter
in effect relating to or affecting creditors'
rights generally and (y) general principles of
equity (regardless of whether considered in a
proceeding in equity or at law).
(iv) The Preferred Stock, when issued and delivered by
the Company against payment by the Purchasers
pursuant to the Agreement, will be validly issued,
fully paid and non-assessable.
(v) The shares of Common Stock issuable upon
conversion of or as dividends on the Preferred
Stock have been duly authorized and reserved for
issuance upon conversion of or as dividends on the
Preferred Stock to the extent required by
paragraph (7)(d)(i) of the Certificate of
Designations, are free of preemptive rights and,
when issued upon conversion of or as dividends on
the Preferred Stock in accordance with the terms
of the Certificate of Designations, will be
validly issued, fully paid and non-assessable
(assuming the dividend is properly declared and
paid from funds legally available therefor under
the DGCL).
(vi) Assuming (x) the accuracy of the representations
and warranties of the Purchasers set forth in
Sections 4.4 and 4.5 of the Agreement and (y)
offers of the Preferred Stock were not made to
more than ten prospective purchasers and only
prospective purchasers were solicited who could
have made the representations and warranties set
forth in Sections 4.4 and 4.5 of the Agreement,
except for (a) the filing of the Certificate of
Designations with the Secretary of State of the
State of Delaware, (b) applicable requirements, if
any, under Blue Sky Laws and (c) the filing of a
registration statement by the Company with the
Securities and Exchange Commission covering the
shares of Common Stock issuable upon conversion of
or as dividends on the Preferred Stock, no filing,
consent, approval, permit, authorization, notice,
registration or other action of or with any
Governmental Entity of the United States or the
State of New York, is required to be made or
obtained by or with respect to the Company or any
of its Subsidiaries in connection with the
execution and delivery of the Agreement and the
Registration Rights Agreement by the Company, the
issuance of the Preferred Stock and the Common
Stock issuable upon conversion of or as dividends
on the Preferred Stock by the Company or the
consummation by the Company of the transactions
contemplated by the Agreement and the Registration
Rights Agreement.
In addition, we express no opinion (a) as to the
enforceability of any provision in the Documents (i) relating to
indemnification, contribution or exculpation in connection with
violations of any statutory duties or public policy, or in
connection with willful, reckless or unlawful acts or gross acts
of negligence of the indemnified or exculpated party or the party
receiving contribution or (ii) relating to choice of governing
law to the extent that the enforceability of any such provision
is to be determined by any court other than a court of the State
of New York; or (b) as to the effect on enforceability of the
Documents and the documents contemplated thereby of any decision
of an arbitration tribunal or an arbitrator to the extent such
decision does not give effect to the terms of the Documents.
The opinions expressed herein are limited to the laws
of the United States of America, the laws of the State of New
York and, to the extent relevant to the opinions expressed
herein, the DGCL as currently in effect. We assume no obligation
to supplement this opinion if any applicable laws change after
the date hereof or if we become aware of any facts that might
change the opinions expressed herein after the date hereof.
The opinions expressed herein are solely for your
benefit in connection with the Agreement and may not be relied on
in any manner or for any purpose by any other person or entity
and may not be quoted in whole or in part without our prior
written consent.
Very truly yours,
EXHIBIT C-2
OPINION OF XXXXX XXXX
EXHIBIT C-2
[Letterhead of ICN Pharmaceuticals, Inc.]
October 9, 1996
To the Purchasers named in the
Stock Subscription Agreement dated
as of October 9, 1996, by and among
the Company and such Purchasers
Ladies and Gentlemen:
I am General Counsel for ICN Pharmaceuticals, Inc., a
Delaware corporation (the "Company"). This opinion is delivered
to you pursuant to Section 7.1.(g) of the Stock Subscription
Agreement (the "Stock Subscription Agreement") dated as of
October 9, 1996 among you and the Company in connection with the
issuance by the Company of 50,000 shares of its Series B
Convertible Preferred Stock (the "Preferred Stock"). All
capitalized terms used herein that are defined in, or by
reference in, the Stock Subscription Agreement have the meanings
assigned to such terms therein, or by reference therein, unless
otherwise defined herein. With your permission, all assumptions
and statements of reliance herein have been made without any
independent investigation or verification on my part except to
the extent otherwise expressly stated, and I express no opinion
with respect to the subject matter or accuracy of such
assumptions or items relied upon.
In connection with this opinion, I have (i)
investigated such questions of law, (ii) examined originals or
certified, conformed or reproduction copies of such agreements,
instruments, documents and records of the Company, such
certificates of public officials and such other documents, and
(iii) received such information from officers and representatives
of the Company as I have deemed necessary or appropriate for the
purposes of this opinion. I have examined, among other
documents, the following:
(a) the Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock
(the "Certificate of Designations");
(b) the Stock Subscription Agreement; and
(c) the Registration Rights Agreement for Securities
(the "Registration Rights Agreement") dated as of
October 9, 1996 among you and the Company.
The documents referred to in items (a) through (c)
above, inclusive, are referred to herein collectively as the
"Documents".
In all such examinations, I have assumed the
authenticity of original and certified documents and the
conformity to original or certified copies of all copies
submitted to me as conformed or reproduction copies. As to
various questions of fact relevant to the opinions expressed
herein, I have relied upon, and assume the accuracy of,
representations and warranties contained in the Documents and
certificates and oral or written statements and other information
of or from representatives of the Company and others and assume
compliance on the part of all parties to the Documents with their
covenants and agreements contained therein. With reference to my
opinion in paragraph (vi) below, my opinion is limited to my
review of only those laws and regulations that, in my experience,
are normally applicable to transactions of the type contemplated
by the Documents.
To the extent it may be relevant to the opinions
expressed herein, I have assumed that the parties to the
Documents other than the Company have the power to enter into and
perform the Documents and to consummate the transactions
contemplated thereby and that the Documents have been duly
authorized, executed and delivered by, and constitute legal,
valid and binding obligations of, such parties. I have also
assumed that (1) sufficient authorized but unissued and
unreserved shares (other than shares reserved for this purpose)
of the Company's common stock, par value $0.01 per share ("Common
Stock"), will be available for issuance at the time of and for
use in connection with the issuance of Common Stock upon
conversion of or as dividends on the Preferred Stock, and (2) the
Company will have sufficient surplus under the General
Corporation Law of the State of Delaware (the "DGCL") to declare
and pay dividends on the Preferred Stock or to redeem the
Preferred Stock in accordance with the terms of the Certificate
of Designations. The payment of dividends on the Preferred Stock
is subject to the declaration of such dividends, and the
determination to pay such dividends in either cash or shares of
Common Stock, by the Board of Directors of the Company.
Based upon the foregoing, and subject to the
limitations, qualifications and assumptions set forth herein, I
am of the opinion that:
(i) The Company is a corporation, duly incorporated,
validly existing and in good standing under the
laws of the State of Delaware, and has the
corporate power and authority to own or lease and
operate its properties and to conduct its business
as presently conducted.
(ii) To the best of my knowledge, the Company is duly
qualified to do business and is in good standing
(or such equivalent concept as may be applied in
the applicable jurisdiction) in each jurisdiction
in which the property owned, leased or operated by
it or the nature of the business so conducted by
it makes such qualification necessary, except
where the failure to be so qualified or in good
standing would not reasonably be expected to have
a Material Adverse Effect.
(iii) The Company possesses all governmental
licenses, permits, authorizations and approvals
and has made all registrations and given all
notifications required under the United States
Federal or California state law and, to the best
of my knowledge, other state, local and foreign
law to carry on in all respects its businesses as
currently conducted and except where the failure
to have any such licenses, permits, authorizations
or approvals, individually or in the aggregate,
would not have a Material Adverse Effect.
(iv) Each of the Subsidiaries of the Company organized
in the United States (the "domestic Subsidiaries")
and, to the best of my knowledge, each of the
Subsidiaries of the Company organized outside the
United States (the "foreign Subsidiaries") is a
corporation duly organized, validly existing and
in good standing under the laws of the
jurisdiction of its incorporation (or such
equivalent concept as may be applied in the
applicable jurisdiction).
(v) To the best of my knowledge, each of the
Subsidiaries of the Company is duly qualified to
do business in each jurisdiction in which the
property owned, leased or operated by it or the
nature of the business so conducted by it makes
such qualification necessary, except where the
failure to be so qualified or in good standing
would not reasonably be expected to have a
Material Adverse Effect.
(vi) The Company has the duly authorized Capital Stock
as set forth in the Stock Subscription Agreement.
(vii) (a) Assuming the making or receipt of all
filings, notices, registrations, consents,
approvals, permits and authorizations described in
the following paragraph, the execution and
delivery of the Stock Subscription Agreement and
the Registration Rights Agreement, the execution,
delivery and filing of the Certificate of
Designations by the Company, the issuance of the
Preferred Stock and the Common Stock issuable upon
conversion of or as dividends on the Preferred
Stock by the Company, the consummation of the
transactions contemplated by the Stock
Subscription Agreement, by the Registration Rights
Agreement or by the Certificate of Designations,
the compliance by the Company with any of the
provisions of the Stock Subscription Agreement or
of the Registration Rights Agreement or the
Certificate of Designations will not, except as
set forth in the Stock Subscription Agreement, (1)
conflict with, violate or result in any breach of
the Restated Certificate of Incorporation, by-laws
or other charter documents of the Company or its
Subsidiaries, (2) result in a violation or breach
of, or constitute (with or without due notice or
lapse of time or both) a default or give rise to
any right of termination, cancellation or
acceleration under, or result in the creation of
any Lien on or against any of the properties of
the Company or any of its Subsidiaries pursuant to
any of the terms or conditions of any note, bond,
mortgage, indenture, license, material agreement
or other instrument or obligation to which the
Company or any of its domestic Subsidiaries is a
party or by which any of them or any of their
properties or assets may be bound or, to the best
of my knowledge, any of the Company's foreign
Subsidiaries or by which any of them or any of
their properties or assets may be bound, or (3)
violate any statute, law, rule, regulation, writ,
injunction, judgment, order or decree of any
United States Federal or California state
Governmental Entity or, to the best of my
knowledge, any other state or foreign Governmental
Entity binding on the Company or any of its
Subsidiaries or any of their properties or assets,
excluding from the foregoing clauses (1) and (2)
conflicts, violations, breaches, defaults, rights
of termination, cancellation or acceleration, and
liens which, individually or in the aggregate,
would not have a Material Adverse Effect and would
not affect the validity of the issuance of the
Preferred Stock or of the Common Stock issuable
upon conversion of or as dividends on the
Preferred Stock.
(b) Except for (1) the filing of the Certificate
of Designations with the Secretary of State of the
State of Delaware, (2) applicable requirements, if
any, under Blue Sky Laws and (3) the filing of a
Registration Statement, no filing, consent,
approval, permit, authorization, notice,
registration or other action of or with any
Governmental Entity, is required to be made or
obtained by or with respect to the Company or any
of its Subsidiaries in connection with the
execution and delivery of the Stock Subscription
Agreement and the Registration Rights Agreement by
the Company, the issuance of the Preferred Stock
and the Common Stock issuable upon conversion of
or as dividends on the Preferred Stock by the
Company or the consummation by the Company of the
transactions contemplated thereby.
(viii) Except as set forth in the Stock Subscription
Agreement, there is no claim, action or proceeding
(including any condemnation proceeding) pending
or, to the best of my knowledge, threatened
against or relating to the Company or any of its
domestic Subsidiaries or, to the best of my
knowledge, any foreign Subsidiary by or before any
Governmental Entity that if adversely determined,
individually or in the aggregate, would have a
Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding
against the Company or any of its domestic
Subsidiaries or, to the best of my knowledge, any
foreign Subsidiary that has had, or would
reasonably be expected in the future to have, a
Material Adverse Effect or which might materially
adversely affect the transactions contemplated by
the Stock Subscription Agreement, the Registration
Rights Agreement and the Certificate of
Designations.
(ix) Except as set forth or referred to in the
Company's June 30, 1996 Form 10Q, filed with the
U.S. Securities and Exchange Commission (the "Form
10-Q"), I do not have actual knowledge of any
claim, action or proceeding (including any
condemnation proceeding) pending or threatened
against the Company or any of its subsidiaries by
or before any Governmental Entity that I believe
if adversely determined, individually or in the
aggregate, would have a Material Adverse Effect,
nor, except as set forth in the Form 10-Q, do I
have actual knowledge of any judgment, decree,
injunction, rule or order of any Governmental
Entity or arbitrator outstanding against the
Company or any of its subsidiaries that I believe
has had, or would reasonably be expected in the
future to have, a material adverse effect on the
transactions contemplated by the Stock
Subscription Agreement or the accompanying
Registration Rights Agreement and the Certificate
of Designations.
The opinions expressed herein are limited to the laws
of the United States of America, the laws of the State of
California and, to the extent relevant to the opinions expressed
herein, the DGCL as currently in effect. To the extent that the
laws of foreign jurisdictions are relevant to the opinions
herein, I have relied on qualified outside counsel in such
jurisdictions. With respect to the opinion expressed in
paragraph (ix) above, I have relied, with your permission, on the
letter dated of even date herewith, of Proskauer Xxxx Xxxxx &
Xxxxxxxxxx LLP, a copy of which is attached hereto. I assume no
obligation to supplement this opinion if any applicable laws
change after the date hereof or if I become aware of any facts
that might change the opinions expressed herein after the date
hereof.
The opinions expressed herein are solely for your
benefit in connection with the Stock Subscription Agreement and
may not be relied on in any manner or for any purpose by any
other person or entity and may not be quoted in whole or in part
without my prior written consent, except that CIBC Wood Gundy
Securities Corporation may rely upon this opinion as if it were
addressed to it.
Very truly yours,
[Letterhead of Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP]
October 9, 1996
Xxxxx X. Xxxx, Esq.
Executive Vice President, General
Counsel and Corporate Secretary
ICN Pharmaceuticals, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Dear Xx. Xxxx:
As you know, this firm serves as litigation counsel to
ICN Pharmaceuticals, Inc. (the "Company"). We write in response
to your request for information in connection with the Stock
Subscription Agreement dated as of October 9, 1996 (the
"Agreement").
Except as set forth or referred to in the Company's
June 30, 1996 Form 10Q, filed with the U.S. Securities and
Exchange Commission (the "Form 10-Q"), we do not have actual
knowledge of any claim, action or proceeding (including any
condemnation proceeding) pending or threatened against the
Company or any of its subsidiaries by or before any Governmental
Entity (as we understand that term is defined in the Agreement)
that we believe if adversely determined, individually or in the
aggregate, would have an adverse material effect on the Company,
nor, except as set forth in the Form 10-Q, do we have actual
knowledge of any judgment, decree, injunction, rule or order of
any Governmental Entity or arbitrator outstanding against the
Company or any of its subsidiaries that we believe has had, or
would reasonably he expected in the future to have, an adverse
material effect on the transactions contemplated by the Agreement
or the accompanying Registration Rights Agreement and the
Certificate of Designation. For purposes of this confirmation,
an adverse material effect shall mean monetary damages against
the Company exceeding $1,000,000.
October 9, 1996
Page 2
You may rely on this opinion and refer to it in the
opinion you are providing of even date herewith.
Very truly yours,
Schedule 2.1 ICN PHARMACEUTICALS,
INC.
$50,000,000 PRIVATE PLACEMENT
PURCHASERS OF PREFERRED STOCK
NAME ADDRESS TAXPAYER ID NUMBER DENOMINATION
Halifax Fund, c/o CITCO Fund
Services Not Applicable $9,500,000
L.P. (Cayman Islands)
Xxxxxxxxx Xxxxxx,
Xxxx Xxx Xxxx
X.X. Xxx 00000 SMB (9,500 Shares)
Grand Cayman,
Cayman Islands
Ramius Fund c/o Bank of Bermuda Not Applicable $3,000,000
Limited 0 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx XX00 (3,000 shares)
Xxxxxxxx 00 Xxxx 00xx Xxxxxx 223035509 $1,500,000
Partners, Xxx Xxxx, XX 00000
L.P. (1,500 shares)
Gershon c/o CITCO Fund Not Applicable $1,000,000
Partners, Services (Cayman Islands)
L.P. Xxxxxxxxx Xxxxxx,
Xxxx Xxx Xxxx
X.X. Xxx 00000 SMB (1,000 Shares)
Grand Cayman,
Cayman Islands
CIBC Wood Gundy 000 Xxxxxxxxx Xxxxxx 135492430 $5,000,000
Securities Corp. Xxx Xxxx, XX 00000 (5,000 Shares)
Cerberus 000 Xxxxx Xxxxxx 133690298 $10,000,000
Partners, L.P. 00xx Xxxxx
Xxx Xxxx, XX 00000 (10,000 Shares)
Hare & Co. x/x Xxxx xx Xxx Xxxx 000000000 $1,500,000
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 (1,500 Shares)
Hare & Co. x/x Xxxx xx Xxx Xxxx 000000000 $1,000,000
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 (1,000 Shares)
Cypress & Co. State Street Bank & 042910779 $9,000,000
Trust Company
Xxxxxx No. 5 North
0 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxx. 00000 (9,000 Shares)
Daffodil & Co. State Street Bank & 042910780 $8,500,000
Trust Company
Xxxxxx No. 5 North
0 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxx. 00000 (8,500 Shares)
Schedule 3.3 SUBSIDIARIES
Subsidiary
Jurisdiction of Incorporation Percentage of Voting Securities
Owned by Company or Subsidiary
Alkaloida Chemical Company Limited Hungary 50.02
Alpha Pharmaceuticals Inc. Panama 100.00
Azeo Processing, Inc. New Jersey 100.00
Contactlens Service Nederlands B.V. Netherlands 100.00
Covoco Holding B.V. Netherlands 100.00
Especilidades Farmaceuticas Argentinas SAICF Argentina 100.00
Faraday Urban Renewal Corporation New Jersey 100.00
Finix Offset S.A. Mexico 100.00
Flow Laboratories B.V. Netherlands 100.00
Flow Laboratories, Inc. Maryland 100.00
Gly-Derm, Inc. Michigan 100.00
Hameco B.V. Netherlands 100.00
ICN Biomedicals Australasia Pty. Ltd. Australia 100.00
ICN Biomedicals B.V. Netherlands 100.00
ICN Biomedicals California, Inc. California 100.00
ICN Biomedicals GmbH Germany 100.00
ICN Biomedicals GmbH Eschwege Germany 100.00
ICN Biomedicals S.A.R.L. France 100.00
ICN Biomedicals S.L. Spain 100.00
ICN Biomedicals, Inc. Delaware 100.00
ICN Biomedicals, Ltd. Scotland 100.00
ICN Biomedicals, N.V./S.A. Belgium 100.00
ICN Biomedicals, SRL Italy 100.00
ICN Canada Holding Ltd. Canada 100.00
ICN Canada Ltd. Canada 100.00
ICN China, Inc. Delaware 100.00
ICN East, Inc. New York 100.00
ICN Farmaceutica S.A. Mexico 100.00
ICN France, SARL France 100.00
ICN Galenika DD Yugoslavia 75.00
ICN Iberica, S.A. Spain 100.00
ICN Oktyabr Russia 90.00
ICN Pharmaceuticals California, Inc. California 100.00
ICN Pharmaceuticals Holland, B.V. Netherlands 100.00
ICN Pharmaceuticals KLK Japan 100.00
ICN Pharmaceuticals Ltd. UK 100.00
ICN Southeast, Inc. Delaware 100.00
ICN Vision Care GmbH Germany 100.00
Intercon Contactlens Productions B.V. Netherlands 100.00
Kamed Financing, Inc. Delaware 40.00
Laboratorios Fedal S.A. Mexico 100.00
Laboratorios Panol, S.A. de C.V. Mexico 100.00
Laboratoris Xxxxxxxx X.X. Mexico 100.00
Labsystems Benelux B.V. Netherlands 100.00
Labsystems Benelux, N.V. Belgium 100.00
Labsystems GmbH Germany 100.00
Xxxxxxxxxxxx Xxxxxx 00.00
Xxxxxxxxx X.X. Xxxxxxxxxxx 100.00
Mondofarma B.V. Netherlands 100.00
NYSCO de Mexico S.A. de C.V. Mexico 100.00
Oculenti B.V. Netherlands 100.00
Oculenti Productie V.V. Netherlands 100.00
Pharmon B.V. Netherlands 100.00
Polypharm Russia 65.00
Revlab Corporation Delaware 100.00
SeaLite Sciences, Inc. Georgia 40.00
SPI Pharmaceuticals California, Inc. California 100.00
Vasifal Austalt Xxxxxxxxxxxx 100.00
Schedule 3.15 MATERIAL CONTRACTS
Joint Venture Contract between Jiangsu Wuxi
Pharmaceutical Corporation and ICN China, Inc. for the
Establishment of a Cooperative Joint Venture Company known as
Wuxi ICN Pharmaceutical Company, Ltd. dated September 25, 1996.
Asset Purchase Agreement between ICN Pharmaceuticals,
Inc. and Siemens Medical Systems, Inc. dated July 18, 1996.
Share Purchase Agreement among ICN Pharmaceuticals,
Inc., Alkaloida Chemical Company Limited and The State
Privatization and Holding Company dated August 30, 1996.
Exclusive License and Supply Agreement on the Stock
Purchase Agreement each between ICN Pharmaceuticals, Inc. and
Schering-Plough Ltd. and dated July 28, 1995.
Loan Modification Agreement, dated as of April 1, 1994,
between the Company and Xxxxxxxxx Federal Savings Bank.
Schedule 3.16 PROPERTIES; ENCUMBRANCES
The Company has certain ownership interests in
properties located in Russia, Yugoslavia and Hungary where
traditional Western concepts of "title" may not exist.
