1
================================================================================
ALLERGAN, INC.
(a Delaware corporation)
ISSUER
$575,270,000
Liquid Yield Option Notes(TM) due 2020
(Zero Coupon -- Subordinated)
PURCHASE AGREEMENT
Dated: October 26, 2000
================================================================================
(TM)Trademark of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
2
TABLE OF CONTENTS
Page
----
SECTION 1. Representations and Warranties by the Company...............................3
(a) Representations and Warranties................................................3
(b) Officer's Certificates.......................................................11
SECTION 2. Sale and Delivery to Initial Purchaser; Closing............................12
(a) Initial Securities...........................................................12
(b) Option Securities............................................................12
(c) Payment......................................................................12
(d) Qualified Institutional Buyer................................................12
(e) Denominations; Registration..................................................13
SECTION 3. Covenants of the Company...................................................13
(a) Offering Memorandum..........................................................13
(b) Notice and Effect of Material Events.........................................13
(c) Amendment to Offering Memorandum and Supplements.............................14
(d) Qualification of Securities for Offer and Sale...............................14
(e) DTC..........................................................................14
(f) Use of Proceeds..............................................................14
(g) Restriction on Sale of Securities............................................14
(h) PORTAL Designation...........................................................15
(i) Reservation of Common Stock..................................................15
(j) Listing of Common Stock......................................................15
SECTION 4. Payment of Expenses........................................................15
(a) Expenses.....................................................................15
i
3
(b) Termination of Agreement.....................................................16
SECTION 5. Conditions of Initial Purchaser's Obligations..............................16
(a) Opinion of Counsel for the Company...........................................16
(b) Opinion of General Counsel for the Company...................................16
(c) Opinion of Counsel for Initial Purchaser.....................................16
(d) Officers' Certificates.......................................................16
(e) Accountants' Comfort Letters.................................................17
(f) Bring-down Comfort Letter....................................................17
(g) Rating.......................................................................17
(h) Registration Rights Agreement................................................17
(i) PORTAL.......................................................................17
(j) Lock-up Agreements...........................................................18
(k) Conditions to Purchase of Option Securities..................................18
(l) Additional Documents.........................................................18
(m) Termination of Agreement.....................................................19
SECTION 6. Subsequent Offers and Resales of the Securities............................19
(a) Offer and Sale Procedures....................................................19
(b) Covenants of the Company.....................................................20
SECTION 7. Indemnification............................................................21
(a) Indemnification of Initial Purchaser.........................................21
(b) Indemnification of Company, Directors and Officers...........................22
(c) Actions Against Parties; Notification........................................22
(d) Settlement Without Consent if Failure to Reimburse...........................22
ii
4
SECTION 8. Contribution...............................................................23
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.............24
SECTION 10. Termination of Agreement...................................................24
(a) Termination; General.........................................................24
(b) Liabilities..................................................................25
SECTION 11. Notices....................................................................25
SECTION 12. Parties....................................................................25
SECTION 13. GOVERNING LAW..............................................................25
SECTION 14. Effect of Headings.........................................................25
SECTION 15. Entire Agreement...........................................................26
SCHEDULES
Schedule A -- Pricing Information..................................................Sch A-1
Schedule B -- List of Persons Subject to Lock-up Agreements........................Sch B-1
EXHIBITS
Exhibit A -- Form of Registration Rights Agreement....................................A-1
Exhibit B -- Form of Opinion of Counsel to the Company................................B-1
Exhibit C -- Form of Opinion of General Counsel to the Company........................C-1
Exhibit D -- Form of Lock-up Letter Agreement.........................................D-1
iii
5
ALLERGAN, INC.
(a Delaware corporation)
ISSUER
$575,270,000
Liquid Yield Option Notes(TM) due 2020
(Zero Coupon -- Subordinated)
PURCHASE AGREEMENT
October 26, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Allergan, Inc., a Delaware corporation (the "Company"), confirms
its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated (the "Initial Purchaser"), with respect to the issue and sale by
the Company and the purchase by the Initial Purchaser of $575,270,000 aggregate
principal amount at maturity of the Company's Liquid Yield Option Notes(TM) due
2020 (the "Initial Securities") and the grant by the Company to the Initial
Purchaser of the option described in Section 2(b) to purchase all or any part of
an additional $82,181,000 principal amount at maturity of the Company's Liquid
Yield Option Notes(TM) due 2020 to cover over-allotments, if any (the "Option
Securities"). The Initial Securities, together with the Option Securities, are
collectively referred to herein as the "Securities". The Securities are to be
issued pursuant to an indenture dated as of November 1, 2000 (the "Indenture")
between the Company and U.S. Bank Trust National Association, as trustee (the
"Trustee"). Securities issued in book-entry form will be issued to Cede & Co. as
nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement,
to be dated as of the Closing Time (as defined in Section 2(b)) (the "DTC
Agreement"), among the Company, the Trustee and DTC.
The Securities will be convertible into shares of common stock,
par value $0.01 per share, of the Company (the "Common Stock") in accordance
with the terms of the Securities and the Indenture, at the initial conversion
rate specified in Schedule A hereto. Upon the third and tenth anniversaries of
the initial issuance date of the Securities, each holder of Securities may
require the Company to purchase such Securities for a price to be paid, at the
Company's option, in cash or (subject to certain limitations) shares of Common
Stock, or any combination thereof, at a purchase price equal to the issue price
of the Securities plus the accrued original
6
issue discount thereon to the date of such purchase. If prior to such date of
purchase the Securities have been converted to semiannual coupon notes following
the occurrence of a Tax Event (as defined in the Indenture), such purchase price
will be equal to the Restated Principal Amount (as defined in the Indenture)
plus accrued and unpaid interest (in lieu of any original issue discount) from
the date of such conversion through such date of purchase. Upon each Change in
Control (as defined in the Indenture) occurring prior to the fifth anniversary
of the initial issuance date of the Securities, each holder of Securities may
require the Company to purchase for cash such holder's Securities (subject to
certain restrictions described below) at a purchase price equal to the issue
price of the Securities plus the accrued original issue discount thereon to the
date of such purchase. If prior to such date of purchase the Securities have
been converted to semiannual coupon notes following the occurrence of a Tax
Event, the Company will be required to purchase such Securities at a cash price
equal to the Restated Principal Amount plus accrued and unpaid interest (in lieu
of any original issue discount) from the date of such conversion through such
date of purchase.
The holders of Securities will be entitled to the benefits of a
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit A with such changes as shall be agreed to by the parties hereto (the
"Registration Rights Agreement"), pursuant to which the Company will file a
registration statement with the Securities and Exchange Commission (the
"Commission") registering resales of the Securities and the shares of Common
Stock issuable upon conversion thereof, as referred to in the Registration
Rights Agreement under the Securities Act of 1933, as amended (the "1933 Act").
The Company understands that the Initial Purchaser proposes to
make an offering of the Securities on the terms and in the manner set forth
herein and agrees that the Initial Purchaser may resell, subject to the
conditions set forth herein, all or a portion of the Securities to purchasers
("Subsequent Purchasers") at any time after the date of this Agreement. The
Securities are to be offered and sold through the Initial Purchaser without
being registered under the 1933 Act, in reliance upon exemptions therefrom.
Pursuant to the terms of the Securities and the Indenture, investors that
acquire Securities may only resell or otherwise transfer such Securities if such
Securities are hereafter registered under the 1933 Act or if an exemption from
the registration requirements of the 1933 Act is available (including the
exemption afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S")
of the rules and regulations promulgated under the 1933 Act (the "1933 Act
Regulations") by the Commission).
The Company has prepared and delivered to the Initial Purchaser
copies of a preliminary offering memorandum dated October 25, 2000 (the
"Preliminary Offering Memorandum") and has prepared and will deliver to the
Initial Purchaser on the date hereof or the next succeeding day, copies of a
final offering memorandum dated October 26, 2000 (the "Final Offering
Memorandum") for use by the Initial Purchaser in connection with its
solicitation of, purchases of, or offering of, the Securities. "Offering
Memorandum" means, with respect to any date or time referred to in this
Agreement, the most recent offering memorandum (whether the Preliminary Offering
Memorandum or the Final Offering Memorandum, or any amendment or supplement to
either such document), including exhibits and appendices thereto and any
documents incorporated therein by reference, which has been prepared and
delivered by the Company to the Initial Purchaser in connection with its
solicitation of purchases of, or offering of, the Securities.
2
7
All references in this Agreement to financial statements and
schedules and other information which is "contained", "included" or "stated" in
the Offering Memorandum (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which are incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Offering Memorandum.
SECTION 1. Representations and Warranties by the Company
(a) Representations and Warranties
The Company represents and warrants to the Initial Purchaser as
of the date hereof and as of the Closing Time referred to in Section 2(c)
hereof, and as of the Date of Delivery (if any) referred to in Section 2(b)
hereof, and agrees with the Initial Purchaser, as follows:
(i) Similar Offerings
Neither the Company nor any of its affiliates, as such
term is defined in Rule 501(b) under the 1933 Act (each, an
"Affiliate"), has, directly or indirectly, solicited any offer to buy,
sold or offered to sell or otherwise negotiated in respect of, or will
solicit any offer to buy or offer to sell or otherwise negotiate in
respect of, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of
the Securities in a manner that would require the Securities to be
registered under the 1933 Act.
(ii) Offering Memorandum
The Offering Memorandum does not, and at the Closing Time
(as defined herein) (and, if any Option Securities are purchased, at the
Date of Delivery (as defined herein)) will not, include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
this representation, warranty and agreement shall not apply to
statements in or omissions from the Offering Memorandum made in reliance
upon and in conformity with information furnished to the Company in
writing by the Initial Purchaser expressly for use in the Offering
Memorandum.
(iii) Incorporated Documents
The Offering Memorandum as delivered from time to time
shall incorporate by reference the most recent Annual Report of the
Company on Form 10-K, each Quarterly Report of the Company on Form 10-Q
and each Current Report of the Company on Form 8-K filed with the
Commission since the filing of such Annual Report. The documents
incorporated or deemed to be incorporated by reference in the
3
8
Offering Memorandum at the time they were or hereafter are filed with
the Commission complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Offering Memorandum, at the
date of the Offering Memorandum and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), do not and
will not include an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(iv) Independent Accountants
To the best knowledge of the Company after due inquiry,
KPMG LLP ("KPMG"), the accountants who certified the financial
statements and supporting schedules with respect to the Company included
in the Offering Memorandum are independent public accountants with
respect to the Company and its subsidiaries within the meaning of
Regulation S-X under the 1933 Act.
(v) Financial Statements
The financial statements, together with the related
schedules and notes, included in the Offering Memorandum present fairly
the financial position of the Company and its consolidated subsidiaries
at the dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
for the periods specified; said financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Offering Memorandum
present fairly in accordance with GAAP the information required to be
stated therein. The selected financial data included in the Offering
Memorandum present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Offering Memorandum.
(vi) No Material Adverse Change in Business
Since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated therein,
(A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C) there
has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.
4
9
(vii) Good Standing of the Company
The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has corporate power and corporate authority to own,
lease and operate its properties and to conduct its business as
described in the Offering Memorandum and to enter into and perform its
obligations under this Agreement, the Indenture and the Registration
Rights Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect.
(viii) Capitalization
The authorized, issued and outstanding capital stock and
the debt of the Company is as set forth in the Offering Memorandum in
the column entitled "Actual" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant
to reservations, agreements, employee benefit plans referred to in the
Offering Memorandum or pursuant to the exercise of convertible
securities or options referred to in the Offering Memorandum). The
shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company; and all of the issued
shares of capital stock of each "significant subsidiary" of the Company
(as such term is defined in Rule 1-02 of Regulation S-X under the 1933
Act, herein a "Significant Subsidiary") have been duly and validly
authorized and issued, are (except for Significant Subsidiaries that are
incorporated in jurisdictions outside the United States) fully paid and
non-assessable, and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims. The authorized capital stock of the
Company conforms in all material respects as to legal matters to the
description thereof contained in the Offering Memorandum.
Upon issuance and delivery of the Securities in accordance
with this Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof into shares of Common
Stock, subject to the Company's right to elect instead to pay such
holder in cash the market value of such shares of Common Stock, in
accordance with the terms of the Securities and the Indenture; the
shares of Common Stock issuable upon such conversion of the Securities
have been duly authorized and reserved for issuance upon such conversion
by all necessary corporate action and such shares, when issued upon such
conversion, will be validly issued and will be fully paid and
non-assessable; the shares of Common Stock issuable at the Company's
option upon purchase of the Securities at the option of the holder
thereof will have been, prior to the issuance thereof, duly authorized
by all necessary corporate action, and such shares if and when
5
10
issued, in accordance with the terms of the Securities and the
Indenture, will be validly issued, fully paid and non-assessable; and
the issuance of such shares upon such conversion or purchases will not
be subject to the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement
This Agreement has been duly authorized, executed and
delivered by the Company.
(x) Authorization of the Indenture
The Indenture has been duly authorized by the Company and,
when executed and delivered by the Company and the Trustee, will
constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws relating to or
affecting the enforcement of creditors' rights generally and by
equitable principles of general applicability, regardless of whether
such enforceability is considered in a proceeding at equity or at law.
(xi) Authorization of the Registration Rights Agreement
The Registration Rights Agreement has been duly authorized
by the Company and, when executed and delivered by the Company and the
Initial Purchaser, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
relating to or affecting the enforcement of creditors' rights generally
and by equitable principles of general applicability, regardless of
whether such enforceability is considered in a proceeding at equity or
at law.
(xii) Authorization of the Securities
The Securities have been duly authorized by the Company
and, at the Closing Time, will have been duly executed by the Company
and, when authenticated, issued and delivered in the manner provided for
in the Indenture and delivered against payment of the purchase price
therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforceability thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws relating to or affecting the enforcement of creditors'
rights generally and by equitable principles of general applicability,
regardless of whether such enforceability is considered in a proceeding
at equity or at law, and will be in the form contemplated by, and
entitled to the benefits of, the Indenture and the Registration Rights
Agreement.
6
11
(xiii) Description of the Securities, the Indenture and the
Registration Rights Agreement
The Securities, the Indenture and the Registration Rights
Agreement will conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum and
will be in substantially the respective forms last delivered to the
Initial Purchaser prior to the date of this Agreement.
(xiv) Absence of Defaults and Conflicts
Except as disclosed in the Offering Memorandum, neither
the Company nor any of its subsidiaries is in violation of its charter,
by-laws or other organizational documents or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument
to which the Company or any of its Significant Subsidiaries is a party
or by which it may be bound or to which any of the property or assets of
the Company or any of its subsidiaries may be subject (collectively,
"Agreements and Instruments"), except in each such case for such
violations or defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement,
the Indenture, the Registration Rights Agreement and the Securities and
any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the
transactions contemplated hereby or thereby or in the Offering
Memorandum and the consummation of the transactions contemplated herein
and in the Offering Memorandum (including, without limitation, the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Offering Memorandum under the
caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute
a breach of, or default or a Repayment Event (as defined below) under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that,
singularly or in the aggregate, would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any of its Significant
Subsidiaries or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
of such subsidiaries or any of their assets or properties. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
7
12
(xv) Absence of Labor Dispute
Except for routine disputes not substantially different in
quality and character suffered in the ordinary course consistent with
past practice, no labor dispute exists with the employees of the Company
or with employees of any of its subsidiaries nor, to the knowledge of
the Company, is any such labor dispute imminent.
(xvi) Absence of Proceedings
Except as disclosed in the Offering Memorandum, there is
no action, suit, proceeding (except applications for regulatory approval
from the Food and Drug Administration and foreign drug agencies),
inquiry or investigation before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries, as the case may be, that could reasonably be
expected to have a Material Adverse Effect, or that could reasonably be
expected individually or in the aggregate to materially and adversely
affect the properties or assets of the Company or any of its
subsidiaries, considered as one enterprise, or that could reasonably be
expected to adversely affect the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder. The aggregate of all pending legal or
governmental proceedings to which the Company or any of its subsidiaries
is a party or which affect any of its properties that are not described
in the Offering Memorandum, including ordinary routine litigation
incidental to the business, could not reasonably be expected to have a
Material Adverse Effect.
(xvii) Possession of Intellectual Property
Except as disclosed in the Offering Memorandum, the
Company and its subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, the "Intellectual Property")
necessary to carry on the business now operated by them. Neither the
Company nor any of its subsidiaries has received any written or oral
notice by or on behalf of a claimant of any infringement of or conflict
with rights of the claimant by the Company with respect to any
Intellectual Property, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding), singularly or
in the aggregate, would reasonably be expected to result in a Material
Adverse Effect.
(xviii) Absence of Further Requirements
No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection
with the offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement or for
the due
8
13
execution, delivery or performance of the Indenture by the Company,
except such as have been already obtained.
(xix) Possession of Licenses and Permits
Except as disclosed in the Offering Memorandum, the
Company and its subsidiaries possess such licenses, approvals, consents
and other authorizations (collectively, the "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them, except where the failure to possess such Governmental Licenses
would not, singly or in the aggregate, have a Material Adverse Effect;
the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xx) Title to Property
The Company and its subsidiaries have good and marketable
title to all properties and assets owned by each of them, free and clear
of all mortgages, pledges, liens, charges, security interests, claims,
encumbrances or restrictions of any kind, except such as (A) are
disclosed in the Offering Memorandum or (B) are neither material in
amount nor materially significant in relation to the business of the
Company and its subsidiaries, considered as one enterprise; all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the Offering
Memorandum, are in full force and effect, and neither the Company nor
any of its subsidiaries has any written notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or any of its subsidiaries under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company
or any subsidiary thereof to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xxi) Environmental Laws
Except as disclosed in the Offering Memorandum and except
as such matters would not, singularly or in the aggregate, have a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
9
14
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each
in compliance with their requirements, except where the failure so to be
in compliance would not result in a Material Adverse Effect, and (C)
there are no pending or, to the best knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries.
(xxii) Rule 144A Eligibility
The Securities are eligible for resale pursuant to Rule
144A (assuming the accuracy of the representations and warranties of the
Initial Purchaser contained herein) and will not be, at the Closing
Time, of the same class as securities listed on a national securities
exchange registered under Section 6 of the 1934 Act, or quoted in a U.S.
automated interdealer quotation system.
(xxiii) No General Solicitation
None of the Company, its Affiliates or any person acting
on its or any of their behalf (other than the Initial Purchaser and its
Affiliates, as to whom the Company makes no representation) has engaged
or will engage, in connection with the offering of the Securities, in
any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the 1933 Act.
(xxiv) No Registration Required
Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 2 and the procedures
set forth in Section 6 hereof, it is not necessary in connection with
the offer, sale and delivery of the Securities to the Initial Purchaser
and to each Subsequent Purchaser in the manner contemplated by this
Agreement and the Offering Memorandum to register the Securities under
the 1933 Act or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended (the "1939 Act").
(xxv) Investment Company Act
The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Offering Memorandum will not be,
an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
10
15
(xxvi) Filing of Tax Returns
The Company and each of its subsidiaries have filed all
tax returns which are required to have been filed by them pursuant to
domestic or foreign laws and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by them (except where the
requirement for payment of such taxes is being contested in good faith
in appropriate proceedings), except where the failure so to file or pay
would not result in a Material Adverse Effect. The charges, accruals and
reserves on the books of the Company and its subsidiaries in respect of
taxes or other governmental charges are, to the best knowledge of the
Company after reasonable investigation, adequate.
(xxvii) Insurance
The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses
in which they are engaged; neither the Company nor the Subsidiary has
been refused any material insurance coverage sought or applied; and
neither the Company nor any of its subsidiaries has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect.
(xxviii) System of Internal Accounting Controls
The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with management's
general or specific authorization, (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets, (C) access to
assets is permitted only in accordance with management's general or
specific authorization and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxix) Default Under Senior Indebtedness
No event of default exists under any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
constituting Senior Indebtedness (as defined in the Indenture).
(b) Officer's Certificates
Any certificate signed by any officer of the Company or any of
its subsidiaries delivered to the Initial Purchaser or to counsel for the
Initial Purchaser shall be deemed a representation and warranty by the Company
to the Initial Purchaser as to the matters covered thereby.
11
16
SECTION 2. Sale and Delivery to Initial Purchaser; Closing
(a) Initial Securities
On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, at the price set forth in Schedule A hereto, the
Initial Securities.
(b) Option Securities
In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Initial Purchaser to purchase any or all
of the Option Securities (in multiples of $1,000 principal amount at maturity)
at the price set forth in Schedule A hereto plus accrued Original Issue
Discount, if any, from the Closing Time to the Date of Delivery. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments that may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Initial Purchaser to
the Company setting forth the number of Option Securities as to which the
Initial Purchaser is then exercising the option and the time and date of payment
and delivery for such Option Securities. Any such time and date of delivery (a
"Date of Delivery") shall be determined by the Initial Purchaser, but shall not
be later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined.
(c) Payment
Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the office of Shearman & Sterling,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other
place as shall be agreed upon by the Initial Purchaser and the Company, at 10:00
A.M. (eastern time) on November 1, 2000, or such other time not later than ten
business days after such date as shall be agreed upon by the Initial Purchaser
and the Company (such time and date of payment and delivery being herein called
the "Closing Time").
In addition, in the event that any or all of the Option
Securities are purchased by the Initial Purchaser, payment of the purchase price
for, and delivery of certificates for, such Option Securities shall be made at
the above-mentioned offices, or at such other place as shall be agreed upon by
the Initial Purchaser and the Company, on each Date of Delivery as specified in
the notice from the Initial Purchaser to the Company.
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the Company in
writing, against delivery to the Initial Purchaser for its account of
certificates for the Securities to be purchased by it.
(d) Qualified Institutional Buyer
12
17
The Initial Purchaser represents and warrants to, and agrees
with, the Company that it (i) is a "qualified institutional buyer" within the
meaning of Rule 144A under the 1933 Act (a "Qualified Institutional Buyer") and
an "accredited investor" within the meaning of Rule 501(a) under the 1933 Act
(an "Accredited Investor") and (ii) has not and will not offer or sell the
Securities by means of any general solicitation or general advertising (within
the meaning of Rule 502(c) under the 1933 Act).
(e) Denominations; Registration
Certificates for the Securities shall be in such denominations
($1,000 or integral multiples thereof) and registered in such names as the
Initial Purchaser may request in writing at least two full business days before
the Closing Time or the relevant Date of Delivery, as the case may be. The
certificates representing the Securities shall be registered in the name of Cede
& Co. pursuant to the DTC Agreement and shall be made available for examination
and packaging by the Initial Purchaser in The City of New York not later than
10:00 A.M. on the last business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company
The Company covenants with the Initial Purchaser as follows:
(a) Offering Memorandum
The Company, as promptly as possible, will furnish to the Initial
Purchaser, without charge, such number of copies of the Preliminary Offering
Memorandum, Final Offering Memorandum and any amendments and supplements thereto
and documents incorporated by reference therein as the Initial Purchaser may
reasonably request.
(b) Notice and Effect of Material Events
The Company will immediately notify the Initial Purchaser, and
confirm such notice in writing, of (x) any filing made by the Company of
information relating to the offering of the Securities with any securities
exchange or any other regulatory body in the United States or any other
jurisdiction, and (y) prior to the completion of the placement of the Securities
by the Initial Purchaser as evidenced by a notice in writing from the Initial
Purchaser to the Company, any material changes in or affecting the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one enterprise, which (i)
make any statement in the Offering Memorandum false or misleading or (ii) are
not disclosed in the Offering Memorandum. In such event or if during such time
any event shall occur as a result of which it is necessary, in the reasonable
opinion of any of the Company, its counsel, the Initial Purchaser or counsel for
the Initial Purchaser, to amend or supplement the Final Offering Memorandum in
order that the Final Offering Memorandum not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances then
existing, the Company will forthwith amend or supplement the Final Offering
Memorandum by preparing and furnishing to the Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the Final Offering Memorandum
(in form and substance satisfactory in the
13
18
reasonable opinion of counsel for the Initial Purchaser) so that, as so amended
or supplemented, the Final Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing at
the time it is delivered to a Subsequent Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements
The Company will advise the Initial Purchaser promptly of any
proposal to amend or supplement the Offering Memorandum and will not effect such
amendment or supplement without the consent of the Initial Purchaser. Neither
the consent of the Initial Purchaser, nor the Initial Purchaser's delivery of
any such amendment or supplement, shall constitute a waiver of any of the
conditions set forth in Section 5 hereof.
(d) Qualification of Securities for Offer and Sale
The Company will use its reasonable best efforts, in cooperation
with the Initial Purchaser, to qualify the Securities for the initial offering
and sale under the applicable securities laws of such states and other
jurisdictions as the Initial Purchaser may designate and will maintain such
qualifications in effect as long as required for the sale of the Securities;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
(e) DTC
The Company will cooperate with the Initial Purchaser and use its
reasonable best efforts to permit the Securities to be eligible for clearance
and settlement through the facilities of DTC.
(f) Use of Proceeds
The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Offering Memorandum under
"Use of Proceeds".
(g) Restriction on Sale of Securities
During a period of 90 days from the date of the Offering
Memorandum, the Company will not, without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of the Company's Common Stock or any securities convertible
into or exchangeable or exercisable for Common Stock, whether now owned or
hereafter acquired by the Company or with respect to which the Company has or
hereafter acquires the power of disposition, or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of Common
Stock or any securities convertible into or exchangeable for Common Stock,
whether any such
14
19
swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or upon the conversion of
a security outstanding on the date hereof and referred to in the Offering
Memorandum or the conversion of the Securities or (C) any shares of Common Stock
issued or options to purchase Common Stock granted pursuant to existing employee
benefit plans of the Company.
(h) PORTAL Designation
The Company will use its best efforts to permit the Securities to
be designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. ("NASD")
relating to trading in the PORTAL Market.
(i) Reservation of Common Stock
The Company will reserve and keep available at all times, free of
preemptive rights, Common Stock for the purpose of enabling the Company to
satisfy any obligations to issue Common Stock upon conversion of the Securities.
(j) Listing of Common Stock
The Company will use its best efforts to cause all shares of
Common Stock issuable upon conversion of the Securities to be listed on the New
York Stock Exchange.
SECTION 4. Payment of Expenses
(a) Expenses
The Company agrees to bear all expenses incident to the
performance of its obligations under this Agreement, the Securities, the
Indenture and the Registration Rights Agreement, including, but not limited to,
(i) the preparation and printing of the Offering Memorandum (including financial
statements and any schedules or exhibits and any document incorporated therein
by reference) and of each amendment or supplement thereto, (ii) the preparation,
printing and delivery to the Initial Purchaser of this Agreement, the Indenture,
the Registration Rights Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Initial Purchaser, including any charges of DTC in
connection therewith, (iv) the reasonable fees and disbursements of the
Company's counsel, accountants and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Initial Purchaser in connection therewith and in connection with
the preparation of the Blue Sky Survey, any supplement thereto and any Legal
Investment Survey, (vi) the fees and expenses of the Trustee, including the
reasonable fees and disbursements of counsel for the Trustee in connection with
the Indenture and the Securities, (vii) any fees payable in connection with the
rating of the Securities and (viii) any fees and
15
20
expenses payable in connection with the initial and continued designation of the
Securities as PORTAL securities under the PORTAL Market Rules pursuant to NASD
Rule 5322.
(b) Termination of Agreement
If this Agreement is terminated by the Initial Purchaser in
accordance with the provisions of Section 5 or Section 10(a)(i) hereof, the
Company shall reimburse the Initial Purchaser for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Initial Purchaser.
SECTION 5. Conditions of Initial Purchaser's Obligations
The obligations of the Initial Purchaser hereunder are subject to
the accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Opinion of Counsel for the Company
At the Closing Time, the Initial Purchaser shall have received
the opinion, dated as of the Closing Time, of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
counsel for the Company and regulatory affairs counsel for the Company, in form
and substance reasonably satisfactory to counsel for the Initial Purchaser, to
the effect set forth in Exhibit B hereto.
(b) Opinion of General Counsel for the Company
At the Closing Time, the Initial Purchaser shall have received
the opinion, dated as of the Closing Time, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., General
Counsel of the Company, in form and substance reasonably satisfactory to counsel
for the Initial Purchaser, to the effect set forth in Exhibit C hereto and to
such further effect as counsel to the Initial Purchaser may reasonably request.
(c) Opinion of Counsel for Initial Purchaser
At the Closing Time, the Initial Purchaser shall have received
the opinion, dated as of the Closing Time, of Shearman & Sterling, counsel for
the Initial Purchaser, in form and substance reasonably satisfactory to the
Initial Purchaser. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York, the federal law of the United States and the General Corporation Law
of the State of Delaware, upon the opinions of counsel satisfactory to the
Initial Purchaser. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(d) Officers' Certificates
16
21
At the Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Offering Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Initial Purchaser shall have
received a certificate of the President or a Corporate or Senior Vice President
of the Company and of the chief financial or chief accounting officer of the
Company, dated as of the Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1 hereof are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, and (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Time.
(e) Accountants' Comfort Letters
At the time of the execution of this Agreement, the Initial
Purchaser shall have received from KPMG, a letter dated such date, in form and
substance reasonably satisfactory to the Initial Purchaser, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to Initial Purchaser with respect to the financial statements
and certain financial information contained in the Offering Memorandum.
(f) Bring-down Comfort Letter
At the Closing Time, the Initial Purchaser shall have received
from KPMG a letter, dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (f)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to the Closing Time.
(g) Rating
Since the date of this Agreement, there shall not have occurred a
downgrading in the rating, if any, assigned to the Securities or any of the
Company's other debt securities by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such securities rating agency shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Securities or any of the Company's
other debt securities.
(h) Registration Rights Agreement
At the Closing Time, the Registration Rights Agreement, in the
form attached hereto as Exhibit A, shall have been duly executed and delivered
by the Company and (assuming due execution, delivery and performance by the
Initial Purchaser) be in full force and effect.
(i) PORTAL
At the Closing Time, the Securities shall have been designated
for trading on PORTAL.
17
22
(j) Lock-up Agreements
At the date of this Agreement, the Initial Purchaser shall have
received an agreement substantially in the form of Exhibit E hereto signed by
the persons listed on Schedule B hereto.
(k) Conditions to Purchase of Option Securities
In the event that the Initial Purchaser exercises its option
provided in Section 2(b) to purchase all or any portion of the Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company and any
subsidiary of the Company hereunder shall be true and correct as of the Date of
Delivery and, at the Date of Delivery, the Initial Purchaser shall have
received:
(i) Officers' Certificates
Certificates, dated the Date of Delivery, of the President
or a Corporate or Senior Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(e)
remains true and correct as of the Date of Delivery.
(ii) Opinions of Counsel
The opinions of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Company, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., General Counsel of the Company,
each in form and substance reasonably satisfactory to counsel for the
Initial Purchaser, dated the Date of Delivery, relating to the Option
Securities to be purchased on the Date of Delivery and otherwise to
substantially the same effect as the opinions provided in Sections 5(a)
and 5(b).
(iii) Opinion of Counsel for the Initial Purchaser
The opinion of Shearman & Sterling, counsel for the
Initial Purchaser, dated the Date of Delivery, relating to the Option
Securities to be purchased on the Date of Delivery and otherwise to the
same effect as the opinion provided in Section 5(c).
(iv) Bring-down Comfort Letters
Letter from KPMG in form and substance reasonably
satisfactory to the Initial Purchaser and dated the Date of Delivery,
substantially in the same form and substance as the letters furnished to
the Initial Purchaser pursuant to Section 5(e), except that the
"specified date" in the letters furnished pursuant to this paragraph
shall be a date not more than three business days prior to the Date of
Delivery.
(l) Additional Documents
At the Closing Time and at each Date of Delivery, counsel for the
Initial Purchaser shall have been furnished with such documents as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein
18
23
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Initial Purchaser and counsel for the Initial
Purchaser.
(m) Termination of Agreement
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any condition to the purchase of Option Securities on a Date of Delivery
which is after the Closing Time, the obligations of the Initial Purchaser to
purchase the Option Securities, may be terminated by the Initial Purchaser by
notice to the Company at any time at or prior to the Closing Time or such Date
of Delivery, as the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section 4 and except that
Sections 1, 7, 8 and 9 shall survive any such termination and remain in full
force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities
(a) Offer and Sale Procedures
The Initial Purchaser and the Company hereby establish and agree
to observe the following procedures in connection with the offer and sale of the
Securities:
(i) Offers and Sales Only to Qualified Institutional Buyers
Offers and sales of the Securities shall only be made to
persons whom the offeror or seller reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act).
(ii) No General Solicitation
No general solicitation or general advertising (within the
meaning of Rule 502(c) under the ▇▇▇▇ ▇▇▇) will be used in the United
States in connection with the offering or sale of the Securities.
(iii) Purchases by Non-Bank Fiduciaries
In the case of a non-bank Subsequent Purchaser of a
Security acting as a fiduciary for one or more third parties, each third
party shall, in the judgment of the applicable Initial Purchaser, be a
Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification
The Initial Purchaser will take reasonable steps to
inform, and cause each of its U.S. Affiliates to take reasonable steps
to inform, persons acquiring Securities from the Initial Purchaser or
affiliate, as the case may be, in the United States that the Securities
(A) have not been and will not be registered under the 1933 Act, (B) are
being
19
24
sold to them without registration under the 1933 Act in reliance on Rule
144A or in accordance with another exemption from registration under the
1933 Act, as the case may be, and (C) may not be offered, sold or
otherwise transferred except (1) to the Company, (2) inside the United
States in accordance with (x) Rule 144A to a person whom the seller
reasonably believes is a Qualified Institutional Buyer that is
purchasing such Securities for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that the offer,
sale or transfer is being made in reliance on Rule 144A, or (3) outside
the United States in accordance with Regulation S or (y) pursuant to
another available exemption from registration under the 1933 Act.
(v) Minimum Principal Amount
No sale of the Securities to any one Subsequent Purchaser
will be for less than $250,000 principal amount at maturity and no
Security will be issued in a smaller principal amount. If the Subsequent
Purchaser is a non-bank fiduciary acting on behalf of others, each
person for whom it is acting must purchase at least $250,000 principal
amount at maturity of the Securities.
(vi) Restrictions on Transfer
The transfer restrictions and the other provisions set
forth in the Offering Memorandum under the heading "Transfer
Restrictions", including the legend required thereby, shall apply to the
Securities except as otherwise agreed by the Company and the Initial
Purchaser.
(b) Covenants of the Company
The Company covenants with the Initial Purchaser as follows:
(i) Integration
The Company agrees that it will not and will cause its
Affiliates not to solicit any offer to buy or make any offer or sale of,
or otherwise negotiate in respect of, securities of the Company of any
class if, as a result of the doctrine of "integration" referred to in
Rule 502 under the 1933 Act, such offer or sale would render invalid
(for the purpose of (i) the sale of the Securities by the Company to the
Initial Purchaser, (ii) the resale of the Securities by the Initial
Purchaser to Subsequent Purchasers or (iii) the resale of the Securities
by such Subsequent Purchasers to others) the exemption from the
registration requirements of the 1933 Act provided by Section 4(2)
thereof or by Rule 144A thereunder or otherwise.
(ii) Rule 144A Information
The Company agrees that, in order to render the Securities
eligible for resale pursuant to Rule 144A under the 1933 Act, while any
of the Securities remain outstanding, it will make available, upon
request, to any holder of Securities or prospective purchasers of
Securities the information specified in Rule 144A(d)(4), unless the
Company furnishes information to the Commission pursuant to Section 13
or 15(d) of
20
25
the 1934 Act (such information, whether made available to holders or
prospective purchasers or furnished to the Commission, is herein
referred to as "Additional Information").
(iii) Restriction on Repurchases
Until the expiration of two years after the original
issuance of the Securities, the Company will not, and will cause its
Affiliates not to, purchase or agree to purchase or otherwise acquire
any Securities which are "restricted securities" (as such term is
defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial
owner or otherwise (except as agent acting as a securities broker on
behalf of and for the account of customers in the ordinary course of
business in unsolicited broker's transactions).
SECTION 7. Indemnification
(a) Indemnification of Initial Purchaser
The Company agrees to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Offering Memorandum or the Final Offering Memorandum (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; provided that (subject to
Section 7(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
the Initial Purchaser), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information
21
26
furnished to the Company by the Initial Purchaser expressly for use in the
Offering Memorandum (or any amendment thereto).
(b) Indemnification of Company, Directors and Officers
The Initial Purchaser agrees to indemnify and hold harmless the
Company and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Offering Memorandum in reliance upon and in conformity with written information
furnished to the Company by the Initial Purchaser expressly for use in the
Offering Memorandum.
(c) Actions Against Parties; Notification
Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 7(a) above, counsel to the indemnified
parties shall be selected by the Initial Purchaser, and, in the case of parties
indemnified pursuant to Section 7(b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may participate at its
own expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section or Section 8 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement Without Consent if Failure to Reimburse
If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel consistent herewith, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section 7(a)(ii)
effected without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such
22
27
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into, and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided that
an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party, prior to the date of such
settlement, (1) reimburses such indemnified party in accordance with such
request for the amount of such fees and expenses of counsel as the indemnifying
party believes in good faith to be reasonable, and (2) provides written notice
to the indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.
SECTION 8. Contribution
If the indemnification provided for in Section 7 hereof is for
any reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Initial Purchaser on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and
the Initial Purchaser on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchaser, bear to the aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and the Initial
Purchaser on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by
23
28
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue or alleged untrue statement or omission or
alleged omission.
Notwithstanding the provisions of this Section, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Initial Purchaser has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls
the Initial Purchaser within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Initial Purchaser, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company.
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the Initial
Purchaser or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Initial Purchaser.
SECTION 10. Termination of Agreement
(a) Termination; General
The Initial Purchaser may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Offering Memorandum, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Initial Purchaser, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission, or if trading generally on the American
Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market
has been suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been required, by any
of said exchanges or
24
29
by such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities
If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 7, 8 and 9
shall survive such termination and remain in full force and effect.
SECTION 11. Notices
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Initial Purchaser shall
be directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, attention of D. ▇▇▇▇▇ ▇▇▇▇▇▇▇; notices to the Company shall be directed
to it at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of General
Counsel.
SECTION 12. Parties
This Agreement shall inure to the benefit of and be binding upon
the Initial Purchaser and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Initial Purchaser and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Initial Purchaser and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Initial Purchaser shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 14. Effect of Headings
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
25
30
SECTION 15. Entire Agreement
This Agreement is intended by the parties as a final expression
of their agreement, and is intended to be a complete and exclusive statement of
the agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
26
31
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchaser and the Company in accordance with its terms.
Very truly yours,
ALLERGAN, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Corporate Vice President,
Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Authorized Signatory
Title: Vice President
32
SCHEDULE A
ALLERGAN, INC.
$575,270,000 Liquid Yield Option Notes(TM) due 2020
1. The initial public offering price per $1,000 principal amount
at maturity of the Securities shall be $608.41 which represents a yield to
maturity of 2.50% per annum (computed on a semiannual bond equivalent basis).
2. The Securities shall be convertible into shares of common
stock, par value $0.01 per share, of the Company (the "Common Stock") at an
initial rate of 5.7615 shares of Common Stock per $1,000 principal amount at
maturity of Securities.
3. The purchase price to be paid by the Initial Purchaser for the
Securities shall be $593.20, being an amount equal to the initial public
offering price per $1,000 principal amount at maturity of Securities set forth
above, less $15.21 per $1,000 principal amount at maturity of Securities.
4. Prior to November 1, 2003, the Securities will not be
redeemable.
5. The redemption prices to be supplied on page 23 of the
Offering Memorandum (and correspondingly in the Indenture) shall be:
Accrued Original
LYON Issue Issue Discount Redemption
Redemption Date Price at 2.50% Price
------------------------------- --------------- -------------------- ------------------
November 1, 2003.............. $608.41 $47.08 $655.49
November 1, 2004.............. $608.41 $63.57 $671.98
November 1, 2005.............. $608.41 $80.48 $688.89
November 1, 2006.............. $608.41 $97.81 $706.22
November 1, 2007.............. $608.41 $115.57 $723.98
November 1, 2008.............. $608.41 $133.78 $742.19
November 1, 2009.............. $608.41 $152.46 $760.87
November 1, 2010.............. $608.41 $171.60 $780.01
November 1, 2011.............. $608.41 $191.22 $799.63
November 1, 2012.............. $608.41 $211.33 $819.74
November 1, 2013.............. $608.41 $231.96 $840.37
November 1, 2014.............. $608.41 $253.10 $861.51
November 1, 2015.............. $608.41 $274.77 $883.18
November 1, 2016.............. $608.41 $296.99 $905.40
November 1, 2017.............. $608.41 $319.76 $928.17
November 1, 2018.............. $608.41 $343.11 $951.52
November 1, 2019.............. $608.41 $367.05 $975.46
At Maturity................... $608.41 $391.59 $1,000.00
Sch ▇-▇
▇▇
▇. The Purchase Dates and Purchase Prices to be supplied on page
24 of the Offering Memorandum and correspondingly in the Indenture shall be:
Purchase Date Purchase Price
------------- --------------
November 1, 2003 $655.49
November 1, 2010 $780.01
7. The prices referred to in paragraphs 5 and 6 above are subject
to adjustment upon the occurrence of a Tax Event, and the subsequent conversion
of the Securities to semiannual coupon notes in the manner specified in the
Offering Memorandum.
Sch A-2
34
SCHEDULE B
List of Persons Subject to Lock-up Agreements
and Number of Shares of Common Stock Exempt from such Lock-up Agreement
Number of shares
of Common Stock
Name that is exempt
---- -----------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Ph.▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, D. Sc.
Handel ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ 54,000
F. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Ph.D. 200,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ 30,000
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. Wild, Ph.D.
Sch B-1
35
Exhibit A
FORM OF REGISTRATION RIGHTS AGREEMENT
[The Registration Rights Agreement is filed as Exhibit 4.2
to this Form 8-K dated November 1, 2000]
36
Exhibit B
FORM OF OPINION OF COUNSEL TO THE COMPANY
(i) The execution and delivery by the Issuer of the Purchase
Agreement, Indenture, Registration Rights Agreement and Securities and the
performance of its obligations thereunder have been duly authorized by all
necessary corporate action. Each of the Indenture, the Purchase Agreement and
the Registration Rights Agreement has been duly executed and delivered by the
Issuer;
(ii) The Indenture constitutes a legal, valid and binding
obligation of the Issuer, enforceable against the Issuer in accordance with its
terms;
(iii) The Securities are in the form contemplated by the
Indenture, and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchaser in accordance with the terms of the Purchase Agreement, will be legal,
valid and binding obligations of the Issuer, enforceable against the Issuer in
accordance with their terms;
(iv) The shares of Common Stock issuable upon conversion of the
Securities have been validly authorized and reserved for issuance upon
conversion of the Securities, and when delivered upon such conversion in
accordance with the terms of the Indenture, will have been duly and validly
issued, fully paid, non-assessable and free of preemptive rights;
(v) The statements in the Offering Memorandum under the captions
"Description of ▇▇▇▇▇," "Description of Capital Stock," "Federal Income Tax
Considerations" and "Plan of Distribution," in each case insofar as such
statements constitute summaries of the legal matters, documents or proceedings
referred to therein, are accurate and fair summaries of the matters referred to
therein;
(vi) Assuming the accuracy of the representations and warranties
of the Initial Purchaser and compliance by the Initial Purchaser with its
agreements contained in the Purchase Agreement, none of the issuance of the
Securities to the Initial Purchaser or resales by the Initial Purchaser in the
manner contemplated by the Purchase Agreement (it being understood that we
express no opinion as to any subsequent resale of the Securities), nor the
issuance of shares of Common Stock upon conversion of the Securities, nor the
execution, delivery and performance by the Issuer of the Purchase Agreement and
the Registration Rights Agreement:
(a) does or will violate, or require any authorization, consent, waiver
or approval of any governmental authority or regulatory body of the
State New York or the United States of America under, any law or
regulation of the State of New York or the United States of America
applicable to the Issuer that, in our experience, is generally
applicable to transactions in the nature of those contemplated by the
Documents, or the Delaware General Corporation Law, except for such
authorizations, consents, waivers or approvals (i) as may be
B-1
37
required under any securities or Blue Sky laws, (ii) as may be
contemplated by the Registration Rights Agreement, (iii) as already have
been obtained or (iv) that, if not made or obtained, would not have a
material adverse effect on the Issuer and its subsidiaries taken as a
whole (a "Material Adverse Effect");
(b) does or will, based solely upon review of the documents
identified to us by officers of the Issuer as constituting all material
contracts of the Issuer, which are exhibits to the Issuer's Annual
Report on Form 10-K for the year ended December 31, 1999 (each a
"Material Contract"), result in a material breach of or material default
under any Material Contract;
(vii) The Issuer is not, and after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Offering Memorandum will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended; and
(viii) Assuming the accuracy of the representations and
warranties of the Initial Purchaser and compliance by the Initial Purchaser with
its agreements contained in the Purchase Agreement, no registration of the
Securities under the Securities Act of 1933, as amended, and no qualification of
the Indenture under the Trust Indenture Act of 1939, as amended, is required for
the sale and delivery of the Securities to the Initial Purchaser or for resales
by the Initial Purchaser in the manner contemplated by the Purchase Agreement,
it being understood that we express no opinion as to any subsequent resale of
the Securities.
We have participated in conferences with representatives of the
Company, representatives of the independent public accountants for the Company
and you and your counsel at which the contents of the Offering Memorandum and
related matters were discussed. We have not independently verified the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum
(other than with respect to the statements in the Offering Memorandum as to
which paragraph (vii) refers), and we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of such statements.
However, based upon our participation in the aforesaid conferences, we have no
reason to believe that the Offering Memorandum (except as to the financial
statements and other financial data contained therein, as to which we express no
opinion), on the date of the Offering Memorandum and at the date hereof,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statement therein, in light of the circumstances under which they were
made, nor misleading.
The opinions set forth above will be subject to reasonable
qualifications, limitations and exceptions.
B-2
38
Exhibit C
FORM OF OPINION OF GENERAL
COUNSEL OF THE COMPANY
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware;
(ii) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Offering Memorandum and to enter into and perform its obligations under the
Purchase Agreement;
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of its
properties or the conduct of its business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Memorandum in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to the Purchase Agreement or pursuant to reservations, agreements,
employee benefit plans or the exercise of convertible securities or options
referred to in the Offering Memorandum); the shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company;
(v) Each Significant Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Offering Memorandum and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of its
properties or the conduct of its business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
and all of the issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued, is (except for any
Significant Subsidiary that is incorporated in a jurisdiction outside the United
States) fully paid and non-assessable and, to such counsel's knowledge, is owned
by the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity;
(vi) There is not pending or, to such counsel's knowledge after
due inquiry and reasonable investigation, threatened any action, suit,
proceeding, inquiry or investigation, before or brought by any court or
governmental agency or body, to which the Company or any Significant Subsidiary
is a party, or to which the property of the Company or any Significant
Subsidiary is subject, which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets
C-1
39
thereof or the consummation of the transactions contemplated in the Purchase
Agreement or the performance by the Company of its obligations thereunder or
transactions contemplated by the Offering Memorandum;
(vii) The information in the Offering Memorandum under the
captions "Business - Government Regulation" and "Business - Patents, Trademarks
and Licenses", insofar as it contains descriptions which constitute matters of
law or legal conclusions, is accurate, complete and fair in all material
respects;
(viii) The execution, delivery and performance of the Purchase
Agreement, the Indenture, the Registration Rights Agreement and the global note
issued pursuant to the Indenture (the "Global Note") and the consummation of the
transactions contemplated in the Offering Memorandum (including the use of the
proceeds from the sale of the Securities as described in the Offering Memorandum
under the caption "Use Of Proceeds" and the issuance of the shares of Common
Stock issuable upon conversion of the Securities) and compliance by the Company
with its obligations under the Purchase Agreement, the Registration Rights
Agreement, the Indenture and the Global Note do not and will not, whether with
or without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any Significant Subsidiary pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement or
instrument, required to be filed as an exhibit to the reports of the Company
filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to which the Company or any of its Significant Subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company or any Significant Subsidiary is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would
have a Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
Significant Subsidiaries, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to me, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Significant Subsidiaries or any of their respective
properties, assets or operations;
(ix) To such counsel's knowledge, (i) the Company is not in
violation of its Certificate of Incorporation or Bylaws and (ii) no default by
the Company exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract that is
required to be filed as an exhibit to the reports of the Company filed pursuant
to the Exchange Act, except, with respect to this clause (ii) only, for such
defaults as would not have a Material Adverse Effect;
(x) Except in each case as would not have a Material Adverse
Effect, such counsel is (i) not aware of any legal actions, claims or
proceedings pending or threatened against the Company, by governmental
authorities or others, relating to patent rights of the Company or alleging that
the Company is infringing or otherwise violating any patents or trade secrets
owned by others, and (ii) to such counsel's knowledge, the Company has not
received any communication for or on behalf of a complainant in which it is
alleged that the Company is infringing or violating the patent rights of third
parties;
C-2
40
(xi) No facts have come to the attention of such counsel that
causes such counsel to believe that the information contained in the Offering
Memorandum concerning patent rights and trademarks, as of the date of the
Offering Memorandum or as of the Closing Time, contained or contains an untrue
statement of material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and
(xii) Such counsel is not aware of any valid U.S. patent that is
or would be infringed by the manufacture, use or sale of the Company's Alphagan
or Botox products.
The opinions set forth above will be subject to reasonable
qualifications, limitations and exceptions.
C-3
41
Exhibit D
FORM OF LOCK-UP LETTER AGREEMENT
_______________, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Offering by Allergan, Inc. of Liquid Yield Option
Notes(TM) due 2020
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director]
of Allergan, Inc., a Delaware corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇") proposes to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company providing for the offering of the Company's Liquid
Yield Option Notes(TM) due 2020 (the "Initial Securities") and the grant by the
Company to ▇▇▇▇▇▇▇ ▇▇▇▇▇ of the option to purchase additional Securities to
cover over-allotments, if any (the "Option Securities"). The Initial Securities,
together with the Option Securities, are collectively the "Securities." In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with ▇▇▇▇▇▇▇ ▇▇▇▇▇ that,
during a period of 90 days from the date of the Purchase Agreement, the
undersigned will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of the Company's common stock, par value $0.01 per share
(the "Common Stock"), or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of Common Stock or any securities convertible into or exchangeable for Common
Stock, whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. The foregoing sentence
shall not apply to such number of shares of Common Stock, whether now owned or
hereafter acquired by the undersigned, as specified in Schedule B to the
Purchase Agreement.
E-1
42
Very truly yours,
Signature:
-------------------------
Print Name:
------------------------
E-2