EXHIBIT 1.1
7,200,000 Shares of Common Stock
VALEANT PHARMACEUTICALS INTERNATIONAL
UNDERWRITING AGREEMENT
February 3, 2005
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies/Gentlemen:
Valeant Pharmaceuticals International, a corporation organized and
existing under the laws of the State of Delaware (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to Bear,
▇▇▇▇▇▇▇ & Co. Inc. (the "Underwriter") an aggregate of 7,200,000 shares (the
"Firm Shares") of its common stock, par value $.01 per share (the "Common
Stock") and, for the sole purpose of covering over-allotments in connection with
the sale of the Firm Shares, at the sole option of the Underwriter, up to an
additional 1,080,000 shares (the "Additional Shares") of Common Stock. The Firm
Shares and any Additional Shares purchased by the Underwriter are referred to
herein as the "Shares". The Shares are more fully described in the Registration
Statement and Prospectus referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-10661), and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares which registration statement, as so amended (including
post-effective amendments, if any), has been declared effective by the
Commission and copies of which have heretofore been delivered to the
Underwriter. The registration statement, as amended at the time it became
effective and as amended by Post-Effective Amendment No. 1 (the "Post-Effective
Amendment"), including the prospectus, financial statements, schedules, exhibits
and other information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A or 434(d) under the
Securities Act, is hereinafter referred to as the "Registration Statement". If
the Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Securities Act
registering additional shares of Common Stock (a "Rule 462(b) Registration
Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which,
if filed, becomes effective upon filing,
no other document with respect to the Registration Statement has heretofore been
filed with the Commission. All of the Shares have been registered under the
Securities Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. No stop order
suspending the effectiveness of either the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or, to the Company's knowledge, threatened by
the Commission. The Company, if required by the Securities Act and the rules and
regulations of the Commission (the "Rules and Regulations"), proposes to file
the Prospectus with the Commission pursuant to Rule 424(b) under the Securities
Act ("Rule 424(b)"). The final prospectus in the form included as part of the
Post-Effective Amendment at the time the Post-Effective Amendment became
effective and the prospectus supplement relating to the offering of the Shares,
are collectively hereinafter referred to as the "Prospectus," except that if any
revised prospectus or prospectus supplement shall be provided to the Underwriter
by the Company for use in connection with the offering and sale of the Shares
contemplated herein (the "Offering") which differs from the Prospectus (whether
or not such revised prospectus or prospectus supplement is required to be filed
by the Company pursuant to Rule 424(b)), the term "Prospectus" shall also refer
to such revised prospectus or prospectus supplement, as the case may be, from
and after the time it is first provided to the Underwriter for such use. Any
preliminary prospectus or prospectus subject to completion included in the
Registration Statement or filed with the Commission pursuant to Rule 424 under
the Securities Act is hereafter called a "Preliminary Prospectus". Any reference
herein to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") on or before
the effective date of the Post-Effective Amendment, the date of such Preliminary
Prospectus or the date of the Prospectus, as the case may be, and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include (i) the filing of any document under the Exchange
Act after the effective date of the Registration Statement, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case may be, which
is incorporated therein by reference and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing shall be deemed to include any
copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("▇▇▇▇▇").
(b) At the time of the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement or the effectiveness of any
post-effective amendment to the Registration Statement, when the Prospectus is
first filed with the Commission pursuant to Rule 424(b) or Rule 434 under the
Securities Act ("Rule 434"), when any supplement to or amendment of the
Prospectus is filed with the Commission, when any document filed under the
Exchange Act was or is filed and at the Closing Date and the Additional Closing
Date, if any (as hereinafter respectively defined), the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto complied
or will comply in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the Rules and Regulations and did not and
will not contain an untrue statement of a material fact and did not and will not
omit to state any material fact required to be stated therein or necessary in
order to
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make the statements therein (i) in the case of the Registration Statement, not
misleading and (ii) in the case of the Prospectus or any related Preliminary
Prospectus in light of the circumstances under which they were made, not
misleading. When any Preliminary Prospectus was first filed with the Commission
(whether filed as part of the registration statement for the registration of the
Shares or any amendment thereto or pursuant to Rule 424(a) under the Securities
Act) and when any amendment thereof or supplement thereto was first filed with
the Commission, such Preliminary Prospectus and any amendments thereof and
supplements thereto complied in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the Rules and Regulations
and did not contain an untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted from the
Registration Statement or the Prospectus or any related Preliminary Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of the Underwriter specifically for use therein. The parties acknowledge and
agree that such information provided by or on behalf of the Underwriter consists
solely of the material included under the caption "Underwriting" in the
Prospectus.
(c) PricewaterhouseCoopers LLP ("PWC"), independent public
accountants for the Company, who have certified the financial statements and
supporting schedules and information of the Company and its subsidiaries that
are included or incorporated by reference in the Registration Statement, and
Deloitte & Touche LLP ("D&T"), independent public accountants for Xcel
Pharmaceuticals, Inc. ("Xcel Pharmaceuticals"), whose reports appear or are
incorporated by reference in the Registration Statement or the Prospectus, who
have certified certain other financial statements and supporting schedules and
information of Xcel Pharmaceuticals that are included or incorporated in the
Registration Statement, each are independent public accountants as required by
the Securities Act, the Exchange Act and the Rules and Regulations.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as disclosed
in the Registration Statement and the Prospectus, the Company has not declared,
paid or made any dividends or other distributions of any kind on or in respect
of its capital stock and there has been no material adverse change or any
development involving a prospective material adverse change, whether or not
arising from transactions in the ordinary course of business, in or affecting
(i) the business, condition (financial or otherwise), results of operations,
stockholders' equity, properties or prospects of the Company and each subsidiary
of the Company listed on Exhibit A hereto (the "Subsidiaries"), individually or
taken as a whole; (ii) the long-term debt or capital stock of the Company or any
of its Subsidiaries; or (iii) the Offering or consummation of any of the other
transactions contemplated by this Agreement, the Registration Statement or the
Prospectus (a "Material Adverse Change"). Since the date of the latest balance
sheet presented, or incorporated by reference, in the Registration Statement and
the Prospectus, neither the Company nor any Subsidiary has incurred or
undertaken any liabilities or obligations, whether direct or indirect,
liquidated or contingent, matured or unmatured, or entered into any
transactions, including any acquisition or disposition of any business or asset,
which are material to the Company and the Subsidiaries individually or taken as
a whole, except for liabilities,
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obligations and transactions which are disclosed in the Registration Statement
and the Prospectus.
(e) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus in the column headed "Actual"
under the caption "Capitalization" and, after giving effect to the Offering and
the other transactions contemplated by this Agreement, the Registration
Statement and the Prospectus, will be as set forth in the column headed "As
Adjusted" under the caption "Capitalization". All of the issued and outstanding
shares of capital stock of the Company are fully paid and non-assessable and
have been duly and validly authorized and issued, in compliance with all
applicable state, federal and foreign securities laws and not in violation of or
subject to any preemptive or similar right that does or will entitle any person,
upon the issuance or sale of any security, to acquire from the Company or any
Subsidiary any Common Stock or other security of the Company or any Subsidiary
or any security convertible into, or exercisable or exchangeable for, Common
Stock or any other such security (any "Relevant Security"), except for such
rights as may have been fully satisfied or waived prior to the effectiveness of
the Registration Statement.
(f) The Shares have been duly and validly authorized and, when
delivered in accordance with this Agreement, will be duly and validly issued,
fully paid and non-assessable, will have been issued in compliance with all
applicable state, federal and foreign securities laws and will not have been
issued in violation of or subject to any preemptive or similar right that does
or will entitle any person to acquire any Relevant Security from the Company or
any Subsidiary upon issuance or sale of Shares in the Offering. The Common Stock
and the Shares conform to the descriptions thereof contained in the Registration
Statement and the Prospectus. Except (i) as disclosed in the Registration
Statement and the Prospectus and any immaterial change to the disclosure therein
resulting from the granting of stock options or the issuance of Common Stock
pursuant to employee benefit plans, stock option plans or any other employee
compensations plans existing on the date hereof and (ii) as contemplated by that
certain Agreement and Plan of Merger between the Company and Xcel
Pharmaceuticals, neither the Company nor any Subsidiary has outstanding
warrants, options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, or any contracts or commitments to issue or sell,
any Relevant Security.
(g) The Subsidiaries are the only subsidiaries of the Company
that are significant subsidiaries of the Company within the meaning of Rule 405
under the Securities Act. Except for the Subsidiaries and as otherwise disclosed
in the Registration Statement and the Prospectus, the Company holds no ownership
or other interest, nominal or beneficial, direct or indirect, in any
corporation, partnership, joint venture or other business entity other than
subsidiaries that are not significant subsidiaries. All of the issued shares of
capital stock of or other ownership interests in each Subsidiary have been duly
and validly authorized and issued and are fully paid and non-assessable and are
owned directly or indirectly by the Company free and clear of any lien, charge,
mortgage, pledge, security interest, claim, equity, trust or other encumbrance,
preferential arrangement, defect or restriction of any kind whatsoever (any
"Lien").
(h) Each of the Company and the Subsidiaries has been duly
organized and validly exists as a corporation, partnership or limited liability
company under the laws of its
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jurisdiction of organization. The Company is in good standing in its
jurisdiction of organization and each of the Subsidiaries is in good standing in
its jurisdiction of organization, except where the failure to be in good
standing could not reasonably be expected to have a Material Adverse Effect.
Each of the Company and the Subsidiaries has all requisite power and authority
to carry on its business as it is currently being conducted and as described in
the Prospectus, and to own, lease and operate its respective properties. Each of
the Company and the Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation, partnership or limited liability company in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good
standing which (individually and in the aggregate) could not reasonably be
expected to have a material adverse effect on (i) the business, condition
(financial or otherwise), results of operations, stockholders' equity or
properties of the Company and the Subsidiaries, individually or taken as a
whole; (ii) the long-term debt or capital stock of the Company or any
Subsidiary; or (iii) the Offering or consummation of any of the other
transactions contemplated by this Agreement, the Registration Statement or the
Prospectus (any such effect being a "Material Adverse Effect").
(i) Each of the Company and the Subsidiaries has all necessary
consents, approvals, authorizations, orders, registrations, qualifications,
licenses, filings and permits of, with and from all judicial, regulatory and
other legal or governmental agencies and bodies and all third parties, foreign
and domestic other than any that are not material to the Company or any
Subsidiary, either individually or in the aggregate (collectively, the
"Consents"), to own, lease and operate its properties and conduct its business
as it is now being conducted and as disclosed in the Registration Statement and
the Prospectus, and each such Consent is valid and in full force and effect, and
neither the Company nor any Subsidiary has received notice of any investigation
or proceedings which results in or, if decided adversely to the Company or any
Subsidiary, could reasonably be expected to result in, the revocation of, or
imposition of a materially burdensome restriction on, any Consent. Each of the
Company and the Subsidiaries is in compliance with all applicable laws, rules,
regulations, ordinances, directives, judgments, decrees and orders, foreign and
domestic, except where failure to be in compliance could not reasonably be
expected to have a Material Adverse Effect. No Consent contains a materially
burdensome restriction not adequately disclosed in the Registration Statement
and the Prospectus.
(j) The Company has full right, power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated by this Agreement, the Registration
Statement and the Prospectus. This Agreement and the transactions contemplated
by this Agreement, the Registration Statement and the Prospectus have been duly
and validly authorized by the Company. This Agreement has been duly and validly
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms.
(k) The execution, delivery, and performance of this Agreement
and consummation of the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus do not and will not (i) conflict with,
require consent under or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) under, or result in the creation or
5
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement, instrument, franchise, license or permit to
which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or their respective properties, operations or assets may be bound or
(ii) violate or conflict with any provision of the certificate or articles of
incorporation, by-laws, certificate of formation, limited liability company
agreement, partnership agreement or other organizational documents of the
Company or any Subsidiary, or (iii) violate or conflict with any law, rule,
regulation, ordinance, directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, domestic or foreign,
except (in the case of clauses (i) and (iii) above) as could not reasonably be
expected to have a Material Adverse Effect.
(l) No Consent of, with or from any judicial, regulatory or
other legal or governmental agency or body or any third party, foreign or
domestic, is required for the execution, delivery and performance of this
Agreement or consummation by the Company of the transactions contemplated by
this Agreement, the Registration Statement and the Prospectus, including the
issuance, sale and delivery of the Shares to be issued, sold and delivered
hereunder, except the registration under the Securities Act of the Shares, which
has become effective, and such Consents as may be required under state
securities or blue sky laws.
(m) Except as disclosed in the Registration Statement and the
Prospectus, there is no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation or arbitration, domestic or foreign,
pending to which the Company, any Subsidiary or, to the Company's knowledge
after due inquiry, Xcel Pharmaceuticals is a party or of which any property,
operations or assets of the Company, any Subsidiary or, to the Company's
knowledge after due inquiry, Xcel Pharmaceuticals is the subject which,
individually or in the aggregate, if determined adversely to the Company or any
Subsidiary, could reasonably be expected to have a Material Adverse Effect; to
the Company's knowledge, no such proceeding, litigation or arbitration is
threatened or contemplated; and the defense of all such proceedings, litigation
and arbitration against or involving the Company, any Subsidiary or Xcel
Pharmaceuticals could not reasonably be expected to have a Material Adverse
Effect.
(n) The Company's use of proceeds from the Offering hereunder
will not violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto, and the Company will not use such proceeds, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended, to the extent that such Act
applies to the Company.
(o) The financial statements and pro forma data, including the
notes thereto, and the supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present fairly the
financial position as of the dates indicated and the cash flows and results of
operations for the periods specified of the Company and its consolidated
subsidiaries and the other entities for which financial statements are included
or
6
incorporated by reference in the Registration Statement and the Prospectus;
except as otherwise stated in the Registration Statement and the Prospectus,
said financial statements have been prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis
throughout the periods involved; and the supporting schedules included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the information required to be stated therein. No other financial
statements or supporting schedules are required by the Rules and Regulations to
be included in the Registration Statement. The other financial and statistical
information included or incorporated by reference in the Registration Statement
and the Prospectus present fairly the information included therein and have been
prepared on a basis consistent with that of the financial statements that are
included or incorporated by reference in the Registration Statement and the
Prospectus and the books and records of the respective entities presented
therein.
(p) There are no pro forma or as adjusted financial statements
which are required by the Rules and Regulations to be included or incorporated
by reference in the Registration Statement and the Prospectus in accordance with
Regulation S-X which have not been included as so required. The pro forma and as
adjusted financial information included or incorporated by reference in the
Registration Statement and the Prospectus has been properly compiled and
prepared in accordance with the applicable requirements of the Securities Act,
the Exchange Act and the Rules and Regulations and includes all adjustments and
reconciliations necessary to present fairly in accordance with United States
generally accepted accounting principles the pro forma and as adjusted financial
position of the respective entity or entities presented therein at the
respective dates indicated and their cash flows and the results of operations
for the respective periods specified.
(q) The assumptions used in preparing the pro forma and as
adjusted financial information included in the Registration Statement and the
Prospectus provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein; the
related adjustments made in the preparation of such pro forma and as adjusted
financial information give appropriate effect to those assumptions; and such pro
forma and as adjusted financial information reflect the proper application of
those adjustments to the corresponding historical financial statement amounts.
(r) The statistical, industry-related and market-related data
included in the Registration Statement and the Prospectus are based on or
derived from sources which the Company reasonably and in good faith believes are
reliable and accurate, and such data agree with the sources from which they are
derived.
(s) The Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act and files reports with the Commission on
the ▇▇▇▇▇ System. The Common Stock is registered pursuant to Section 12(b) of
the Exchange Act and the outstanding shares of Common Stock (other than the
Shares) are listed on the New York Stock Exchange ("NYSE") and the Company has
taken no action designed to, or is reasonably likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the NYSE, nor has the Company received any
notification that the Commission or the NYSE is contemplating terminating such
registration or listing.
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(t) The Company, each Subsidiary and, to the Company's
knowledge after due inquiry, Xcel Pharmaceuticals maintain a system of internal
accounting and other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accounting for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(u) The Company is in compliance with applicable provisions of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act that are effective and is actively taking steps to ensure
that it will be in compliance with other applicable provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act upon the effectiveness of such provisions.
(v) The Company has established and maintains "disclosure
controls and procedures" (as defined in Rules 13a-15(f) and 15d-16(e) of the
Exchange Act); the Company's "disclosure controls and procedures" are reasonably
designed to ensure that all information (both financial and non-financial)
required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Rules and Regulations, and that all such
information is accumulated and communicated to the Company's management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the Chief Executive Officer and Chief Financial Officer of
the Company required under the Exchange Act with respect to such reports.
(w) Since the date of the filing of the Company's Annual
Report on Form 10-K for the year ended December 31, 2003, the Company's auditors
and the audit committee of the board of directors of the Company (or persons
fulfilling the equivalent function) have not been advised of (i) any significant
deficiencies in the design or operation of internal controls which could
adversely affect the Company's ability to record, process, summarize and report
financial data nor any material weaknesses in internal controls; (ii) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company's internal controls.
(x) Since the date of the filing of the Company's Annual
Report on Form 10-K for the year ended December 31, 2003, there have been no
significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.
(y) No event or circumstance has occurred or arisen that
requires that the Company make additional disclosure on Form 8-K and has not
been so disclosed.
(z) Since the date of the filing of the Company's Annual
Report on Form 10-K for the year ended December 31, 2003, there have been no
significant changes in results of operations or otherwise that would result in
the Company revising any publicly announced earnings estimates or other guidance
with respect to such estimates.
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(aa) Neither the Company nor any of its affiliates (within the
meaning of Rule 144 under the Securities Act) has taken, directly or indirectly,
any action which constitutes or is designed to cause or result in, or which
could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Shares.
(bb) Neither Company nor any of its affiliates has, prior to
the date hereof, made any offer or sale of any securities which could be
"integrated" for purposes of the Securities Act or the Rules and Regulations
with the offer and sale of the Shares pursuant to the Registration Statement.
Except as disclosed in the Registration Statement and the Prospectus, neither
Company nor any of its affiliates has sold or issued any Relevant Security
during the six-month period preceding the date of the Prospectus, including but
not limited to any sales pursuant to Rule 144A or Regulation D or S under the
Securities Act, other than shares of Common Stock issued pursuant to employee
benefit plans, stock option plans or the employee compensation plans or pursuant
to outstanding options, rights or warrants as described in the Registration
Statement and the Prospectus.
(cc) Except as disclosed in the Registration Statement and the
Prospectus, no holder of any Relevant Security has any rights to require
registration of any Relevant Security as part or on account of, or otherwise in
connection with, the offer and sale of the Shares contemplated hereby, and any
such rights so disclosed have either been fully complied with by the Company or
effectively waived by the holders thereof, and any such waivers remain in full
force and effect.
(dd) The conditions for use of Form S-3 to register the
Offering under the Securities Act, as set forth in the General Instructions to
such Form, have been satisfied.
(ee) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, 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 Securities Act, the Exchange Act and the Rules and
Regulations, and, when read together with the other information in the
Prospectus, do not contain 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.
(ff) The Company is not and, at all times up to and including
consummation of the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus, and after giving effect to
application of the net proceeds of the Offering, will not be, subject to
registration as an "investment company" under the Investment Company Act of
1940, as amended, and is not and will not be an entity "controlled" by an
"investment company" within the meaning of such act.
(gg) There are no contracts or other documents which are
required to be described in the Registration Statement and the Prospectus or
filed as exhibits to the Registration Statement by the Securities Act, the
Exchange Act or the Rules and Regulations and which have not been so described
or filed.
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(hh) No relationship, direct or indirect, exists between or
among any of the Company or any affiliate of the Company, on the one hand, and
any director, officer, stockholder, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by the Securities
Act, the Exchange Act or the Rules and Regulations to be described in the
Registration Statement or the Prospectus which is not so described and described
as required. There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement and the Prospectus. The Company has not,
in violation of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, directly or indirectly, including
through a Subsidiary, extended or maintained credit, arranged for the extension
of credit, or renewed an extension of credit, in the form of a personal loan to
or for any director or executive officer of the Company.
(ii) Except as disclosed in the Registration Statement and the
Prospectus, there are no contracts, agreements or understandings between the
Company and any person that, to the knowledge of the Company, would give rise to
a valid claim against the Company or Underwriter for a brokerage commission,
finder's fee or other like payment in connection with the transactions
contemplated by this Agreement, the Registration Statement and the Prospectus
or, to the Company's knowledge, any arrangements, agreements, understandings,
payments or issuance with respect to the Company or any of its officers,
directors, shareholders, partners, employees, Subsidiaries or affiliates that
may affect the Underwriter's compensation as determined by the NASD.
(jj) The Company and each Subsidiary owns or leases all such
properties as are necessary to the conduct of its business as presently operated
and as proposed to be operated as described in the Registration and the
Prospectus. Except as would not reasonably be expected to have a Material
Adverse Effect, the Company and the Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all Liens except such as
are described in the Registration Statement and the Prospectus or such as do not
(individually or in the aggregate) materially affect the value of such property
or interfere with the use made or proposed to be made of such property by the
Company and the Subsidiaries; and any real property and buildings held under
lease or sublease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material to, and do not interfere with, the use made and proposed to be made of
such property and buildings by the Company and the Subsidiaries. Neither the
Company nor any Subsidiary has received any notice of any claim adverse to its
ownership of any real or personal property or of any claim against the continued
possession of any real property, whether owned or held under lease or sublease
by the Company or any Subsidiary.
(kk) Except as disclosed in the Registration Statement and the
Prospectus, the Company, each Subsidiary and, to the Company's knowledge after
due inquiry, Xcel Pharmaceuticals (i) owns or possesses adequate right to use
all patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service ▇▇▇▇ registrations, copyrights, licenses,
formulae, customer lists, and know-how and other intellectual property
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential
10
information, systems or procedures, "Intellectual Property") necessary for the
conduct of their respective businesses as being conducted and as described in
the Registration Statement and Prospectus and (ii) have no reason to believe
that the conduct of their respective businesses does or will conflict with, and
have not received any notice of any claim of conflict with, any such right of
others. To the best of the Company's knowledge, all material technical
information developed by and belonging to the Company, any Subsidiary or Xcel
Pharmaceuticals that is considered to be a material trade secret which has not
been patented has been kept confidential. Except as specifically disclosed in
the Registration Statement and the Prospectus, neither the Company, each
Subsidiary nor, to the Company's knowledge after due inquiry, Xcel
Pharmaceuticals has, other than as part of its ordinary business, granted or
assigned to any other person or entity any right to manufacture, have
manufactured, assemble or sell the current products and services of the Company,
its Subsidiaries or, to the Company's knowledge after due inquiry, Xcel
Pharmaceuticals or those products and services described in the Registration
Statement and Prospectus. To the knowledge of the Company and except as
disclosed in the Registration Statement and Prospectus, there is no infringement
by third parties of any such Intellectual Property; there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's, any Subsidiary's or Xcel Pharmaceuticals' rights in
or to any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; and there is no pending
or, to the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company, any Subsidiary or Xcel Pharmaceuticals infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other fact which
would form a reasonable basis for any such claim.
(ll) Except as disclosed in the Registration Statement and the
Prospectus, the Company and the Subsidiaries maintain insurance in such amounts
and covering such risks as the Company reasonably considers adequate for the
conduct of its business and the value of its properties and as is customary for
companies engaged in similar businesses in similar industries, all of which
insurance is in full force and effect, except where the failure to maintain such
insurance could not reasonably be expected to have a Material Adverse Effect.
There are no material claims by the Company or any Subsidiary under any such
policy or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause. The Company reasonably believes
that it will be able to renew its existing insurance as and when such coverage
expires or will be able to obtain replacement insurance adequate for the conduct
of the business and the value of its properties at a cost that could not
reasonably be expected to have a Material Adverse Effect.
(mm) Each of the Company and the Subsidiaries has accurately
prepared and timely filed all federal, state, foreign and other tax returns that
are required to be filed by it and has paid or made provision for the payment of
all taxes, assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company or any
Subsidiary is obligated to withhold from amounts owing to employees, creditors
and third parties, with respect to the periods covered by such tax returns
(whether or not such amounts are shown as due on any tax return), except where
the failure to have done so could not reasonably be expected to have a Material
Adverse Effect. Except where the failure to have done so could not reasonably be
expected to have a Material Adverse Effect, no deficiency assessment with
respect to a proposed adjustment of the Company's or any Subsidiary' federal,
11
state, local or foreign taxes is pending or, to the best of the Company's
knowledge, threatened. The accruals and reserves on the books and records of the
Company and the Subsidiaries in respect of tax liabilities for any taxable
period not finally determined are adequate to meet any assessments and related
liabilities for any such period and, since date of most recent audited financial
statements, the Company and the Subsidiaries have not incurred any liability for
taxes other than in the ordinary course of its business. There is no tax lien,
whether imposed by any federal, state, foreign or other taxing authority,
outstanding against the assets, properties or business of the Company or any
Subsidiary.
(nn) No labor disturbance by the employees of the Company or
any Subsidiary exists or, to the best of the Company's knowledge, is imminent
and the Company is not aware of any existing or imminent labor disturbances by
the employees of any of its or any Subsidiary's principal suppliers,
manufacturers', customers or contractors, which, in either case (individually or
in the aggregate), could reasonably be expected to have a Material Adverse
Effect.
(oo) No "prohibited transaction" (as defined in either Section
406 of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder ("ERISA") or
Section 4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")), "accumulated funding deficiency" (as defined in Section 302 of
ERISA) or other event of the kind described in Section 4043(b) of ERISA (other
than events with respect to which the 30-day notice requirement under Section
4043 of ERISA has been waived) has occurred with respect to any employee benefit
plan for which the Company or any Subsidiary would have any liability which
could (individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect; each employee benefit plan for which the Company or any
Subsidiary would have any liability is in compliance in all material respects
with applicable law, including (without limitation) ERISA and the Code; the
Company has not incurred and does not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from any "pension
plan"; and each plan for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or by failure to act, which could cause
the loss of such qualification.
(pp) Except as disclosed in the Registration Statement and the
Prospectus, there has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company or any Subsidiary (or, to the Company's knowledge, any other entity for
whose acts or omissions the Company is or may be liable) upon any other property
now or previously owned or leased by the Company or any Subsidiary, or upon any
other property, which would be a violation of or give rise to any liability
under any applicable law, rule, regulation, order, judgment, decree or permit
relating to pollution or protection of human health and the environment
("Environmental Law"), except for violations and liabilities which, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. Except as disclosed in the Registration Statement and the Prospectus,
there has been no disposal discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any toxic or
other wastes or other hazardous substances with respect to which the Company or
any Subsidiary has knowledge,
12
except as could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Neither the Company nor any Subsidiary has
agreed to assume, undertake or provide indemnification for any liability of any
other person under any Environmental Law, including any obligation for cleanup
or remedial action, except as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. There is no pending
or, to the best of the Company's knowledge, threatened administrative,
regulatory or judicial action, claim or notice of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any Subsidiary.
(qq) Neither the Company, any Subsidiary nor, to the Company's
knowledge, any of its employees or agents has at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States of any jurisdiction
thereof.
(rr) Neither the Company nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(ss) Neither the Company nor any Subsidiary (i) is in
violation of its certificate or articles of incorporation, by-laws, certificate
of formation, limited liability company agreement, partnership agreement or
other organizational documents, (ii) is in default under, and no event has
occurred which, with notice or lapse of time or both, would constitute a default
under or result in the creation or imposition of any lien, charge or encumbrance
upon any of its property or assets pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its property or assets is subject or
(iii) is in violation in any respect of any law, rule, regulation, ordinance,
directive, judgment, decree or order of any judicial, regulatory or other legal
or governmental agency or body, foreign or domestic, except (in the case clauses
(ii) and (iii) above) violations or defaults that could not (individually or in
the aggregate) reasonably be expected to have a Material Adverse Effect and
except (in the case of clause (ii) alone) for any lien, charge or encumbrance
disclosed in the Registration Statement and the Prospectus.
(tt) Except as set forth in the Prospectus, no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator, including, without limitation, the United States Food and Drug
Administration (the "FDA") and United States Drug Enforcement Agency (the
"DEA"), involving the Company, any Subsidiary or, to the Company's knowledge
after due inquiry, Xcel Pharmaceuticals or its or their respective properties is
pending or, to the best knowledge of the Company, threatened that (i) could have
a material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii) could have a
Material Adverse Effect.
13
(uu) Neither the Company, any Subsidiary nor, to the Company's
knowledge after due inquiry, Xcel Pharmaceuticals have failed to file with
applicable regulatory authorities (including, but not limited to, the FDA and
DEA) any statement, report, information or form required by any applicable law,
regulation or order, except where the failure to file or to be so in compliance
would not, individually and in the aggregate, have a Material Adverse Effect. No
deficiencies have been asserted by any regulatory commission, agency or
authority with respect to any such filings or submissions, except for any such
failures to be in compliance or deficiencies which would not, individually and
in the aggregate, have a Material Adverse Effect.
(vv) The Company has established a compliance program
(including a written compliance policy) to assist the Company and the
Subsidiaries and their respective directors, officers and employees in complying
with applicable regulatory agency guidelines (including, without limitation,
those regulations and guidelines published by FDA and DEA), and to provide
compliance policies governing applicable areas for pharmaceutical companies.
Any certificate signed by or on behalf of the Company and delivered
to the Underwriter or to counsel for the Underwriter shall be deemed to be a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriter and the Underwriter
agrees to purchase from the Company, at a purchase price per share of $22.92,
the Firm Shares.
(b) Payment of the purchase price for, and delivery of
certificates representing, the Firm Shares shall be made at the office of
▇▇▇▇▇▇▇▇▇ Traurig, LLP, The Met Life Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ("Underwriter's Counsel"), or at such other place as shall be agreed
upon by the Underwriter and the Company, at 10:00 A.M., New York City time, on
the third or (as permitted under Rule 15c6-1 under the Exchange Act) fourth
business day after the determination of the public offering price of the
Shares), or such other time not later than ten business days after such date as
shall be agreed upon by the Underwriter and the Company (such time and date of
payment and delivery being herein called the "Closing Date").
Payment of the purchase price for the Firm Shares shall be made by
wire transfer in same day funds to or as directed by the Company upon delivery
of certificates for the Firm Shares to the Underwriter through the facilities of
The Depository Trust Company for the respective accounts of the Underwriter.
Certificates for the Firm Shares shall be registered in such name or names and
shall be in such denominations as the Underwriter may request at least two
business days before the Closing Date. The Company will permit the Underwriter
to examine and package such certificates for delivery at least one full business
day prior to the Closing Date.
14
(c) In addition, on the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Company hereby grants to the Underwriter
the option to purchase up to 1,080,000 Additional Shares at the same purchase
price per share to be paid by the Underwriter for the Firm Shares as set forth
in Section 2(a) above, for the sole purpose of covering over-allotments in the
sale of Firm Shares by the Underwriter. This option may be exercised at any time
and from time to time, in whole or in part on one or more occasions, on or
before the thirtieth day following the date of the Prospectus, by written notice
from the Underwriter to the Company. Such notice shall set forth the aggregate
number of Additional Shares as to which the option is being exercised and the
date and time, as reasonably determined by the Underwriter, when the Additional
Shares are to be delivered (any such date and time being herein sometimes
referred to as the "Additional Closing Date"); provided, however, that no
Additional Closing Date shall occur earlier than the Closing Date or, unless
otherwise agreed by the Underwriter and the Company, earlier than the second
full business day after the date on which the option shall have been exercised
nor later than the eighth full business day after the date on which the option
shall have been exercised. Upon any exercise of the option as to all or any
portion of the Additional Shares, the Underwriter agrees to purchase from the
Company such Additional Shares.
(d) Payment of the purchase price for, and delivery of
certificates representing, the Additional Shares shall be made at the office of
Underwriter's Counsel, or at such other place as shall be agreed upon by the
Underwriter and the Company, at 10:00 A.M., New York City time, on the
Additional Closing Date, or such other time as shall be agreed upon by the
Underwriter and the Company.
Payment of the purchase price for the Additional Shares shall be
made by wire transfer in same day funds to or as directed by the Company upon
delivery of certificates for the Additional Shares to the Underwriter through
the facilities of The Depository Trust Company for the account of the
Underwriter. Certificates for the Additional Shares shall be registered in such
name or names and shall be in such denominations as the Underwriter may request
at least two business days before the Additional Closing Date. The Company will
permit the Underwriter to examine and package such certificates for delivery at
least one full business day prior to the Additional Closing Date.
3. Offering. Upon authorization of the release of the Firm Shares by
the Underwriter, the Underwriter proposes to offer the Shares for sale to the
public upon the terms and conditions set forth in the Prospectus.
4. Covenants of the Company. The Company covenants and agrees with
the Underwriter that:
(a) The Registration Statement and any amendments thereto have
been declared effective, and if Rule 430A is used or the filing of the
Prospectus is otherwise required under Rule 424(b) or Rule 434, the Company will
file the Prospectus (properly completed if Rule 430A has been used) pursuant to
Rule 424(b) within the prescribed time period and will provide evidence
satisfactory to the Underwriter of such timely filing. If the Company elects to
rely on Rule 434, the Company will prepare and file a term sheet that complies
with the requirements of
15
Rule 434, and the Prospectus shall not be "materially different" (as such term
is used in Rule 434) from the Prospectus included in the Registration Statement
at the time it became effective.
The Company will notify you immediately (and, if requested by the
Underwriter, will confirm such notice in writing) (i) when the Registration
Statement and any amendments thereto become effective, (ii) of any request by
the Commission for any amendment of or supplement to the Registration Statement
or the Prospectus or for any additional information, (iii) of the Company's
intention to file or prepare any supplement or amendment to the Registration
Statement or the Prospectus, (iv) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, including but not limited to Rule 462(b) under the
Securities Act, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or of the initiation, or the threatening, of any proceedings
therefor, (vi) of the receipt of any comments from the Commission, and (vii) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for that purpose. If the Commission shall
propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and, if issued,
to obtain the lifting of such order as soon as possible. The Company will not
file any amendment to the Registration Statement or any amendment of or
supplement to the Prospectus (including the prospectus required to be filed
pursuant to Rule 424(b) or Rule 434) that differs from the prospectus on file at
the time of the effectiveness of the Registration Statement or file any document
under the Exchange Act if such document would be deemed to be incorporated by
reference into the Prospectus to which the Underwriter shall reasonably object
in writing after being timely furnished in advance a copy thereof. The Company
will provide the Underwriter with copies of all such amendments, filings and
other documents a sufficient time prior to any filing or other publication
thereof to permit the Underwriter a reasonable opportunity to review and comment
thereon.
(b) The Company shall comply with the Securities Act and the
Exchange Act to permit completion of the distribution as contemplated in this
Agreement, the Registration Statement and the Prospectus. If at any time when a
prospectus relating to the Shares is required to be delivered under the
Securities Act or the Exchange Act in connection with the sales of Shares, any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the judgment of the Underwriter or the Company, include
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances existing at the time of delivery to the
purchaser, not misleading, or if to comply with the Securities Act, the Exchange
Act or the Rules and Regulations it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement, or to file any document
incorporated by reference in the Registration Statement or the Prospectus or in
any amendment thereof or supplement thereto, the Company will notify you
promptly and prepare and file with the Commission, subject to Section 4(a)
hereof, an appropriate amendment or supplement (in form and substance
satisfactory to the Underwriter) which will correct such statement or omission
or which will effect such compliance and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as possible.
16
(c) The Company will promptly deliver to each of you and
Underwriter's Counsel a signed copy (or a conformed copy certified by the
Company to be a true and complete copy) of the Registration Statement, as
initially filed and all amendments thereto, including all consents and exhibits
filed therewith, and will maintain in the Company's files manually signed copies
of such documents for at least five years after the date of filing. The Company
will promptly deliver to the Underwriter such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, and all documents
incorporated by reference in the Registration Statement and Prospectus or any
amendment thereof or supplement thereto, and any documents as you may reasonably
request. Prior to 3:00 P.M., New York time, on the business day next succeeding
the date of this Agreement and from time to time thereafter, the Company will
furnish the Underwriter with copies of the Prospectus in New York City in such
quantities as you may reasonably request.
(d) The Company consents to the use and delivery of the
Preliminary Prospectus by the Underwriter in accordance with Rule 430 and
Section 5(b) of the Securities Act.
(e) The Company will use its commercially reasonable best
efforts, in cooperation with the Underwriter, at or prior to the time of
effectiveness of the Registration Statement, to qualify the Shares for offering
and sale under the securities laws relating to the offering or sale of the
Shares of such jurisdictions, domestic or foreign, as the Underwriter may
designate and to maintain such qualification in effect for so long as required
for the distribution thereof; except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process.
(f) The Company will make generally available to its security
holders and to the Underwriter, as soon as practicable, an earnings statement of
the Company and the Subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations (including, at
the option of the Company, Rule 158).
(g) During the period of ninety (90) days from the date of the
Prospectus, without the prior written consent of the Underwriter, the Company
(i) will not, directly or indirectly, issue, offer, sell, agree to issue, offer
or sell, solicit offers to purchase, grant any call option, warrant or other
right to purchase, purchase any put option or other right to sell, pledge,
borrow or otherwise dispose of any Relevant Security, or make any announcement
of any of the foregoing, (ii) will not establish or increase any "put equivalent
position" or liquidate or decrease any "call equivalent position" (in each case
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder) with respect to any Relevant Security, and
(iii) will not otherwise enter into any swap, derivative or other transaction or
arrangement that transfers to another, in whole or in part, any economic
consequence of ownership of a Relevant Security, whether or not such transaction
is to be settled by delivery of Relevant Securities, other securities, cash or
other consideration; and the Company will obtain an undertaking in substantially
the form of Annex V hereto of each of its officers and directors not to engage
in any of the aforementioned transactions on their own behalf, other than the
sale of Shares as contemplated by this Agreement and the Company's issuance of
Common Stock upon (i) the conversion or exchange of convertible or exchangeable
securities outstanding on the date
17
hereof; (ii) the exercise of currently outstanding options; (iii) the exercise
of currently outstanding warrants; and (iv) the grant and exercise of options
under, or the issuance and sale of shares pursuant to, employee stock option
plans in effect on the date hereof, each as described in the Registration
Statement and the Prospectus. The Company will not, during such period, file a
registration statement under the Securities Act in connection with any
transaction by the Company or any person that is prohibited pursuant to the
foregoing, except for registration statements on Form S-8 relating to employee
benefit plans.
(h) During the period of three years from the effective date
of the Registration Statement, the Company will furnish to you copies of all
reports or other communications (financial or other) furnished to security
holders or from time to time published or publicly disseminated by the Company,
and will deliver to you (i) as soon as they are available, copies of any
reports, financial statements and proxy or information statements furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial information to be
on a consolidated basis to the extent the accounts of the Company and the
Subsidiaries are consolidated in reports furnished to its security holders
generally or to the Commission). For purposes of this Section 4(h), items filed
by the Company with the Commission on ▇▇▇▇▇ will be deemed to have been
furnished to you on the date of such filing.
(i) The Company will apply the net proceeds from the sale of
the Shares as set forth under the caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to list the Shares,
subject to notice of issuance, on the NYSE and maintain the listing of the
Shares on the NYSE.
(k) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to the
Securities Act, the Exchange Act and the Rules and Regulations, including
without limitation any and all documents, consents and reports required to be
filed in connection with the proposed transaction with Xcel Pharmaceuticals,
within the time periods required thereby.
(l) The Company will not take, and will cause its affiliates
(within the meaning of Rule 144 under the Securities Act) not to take, directly
or indirectly, any action which constitutes or is designed to cause or result
in, or which could reasonably be expected to constitute, cause or result in, the
stabilization or manipulation of the price of any security to facilitate the
sale or resale of the Shares.
5. Payment of Expenses. Whether or not the transactions contemplated
by this Agreement, the Registration Statement and the Prospectus are consummated
or this Agreement is terminated, the Company hereby agrees to pay all costs and
expenses incident to the performance of its obligations hereunder, including the
following: (i) all expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and any and all amendments and supplements thereto
18
and the mailing and delivering of copies thereof to the Underwriter and dealers;
(ii) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the
Securities Act and the Offering; (iii) the cost of producing this Agreement,
blue sky survey, closing documents and other instruments, agreements or
documents (including any compilations thereof) in connection with the Offering;
(iv) all expenses in connection with the qualification of the Shares for
offering and sale under state or foreign securities or blue sky laws as provided
in Section 4(e) hereof, including the fees and disbursements of counsel for the
Underwriter in connection with such qualification and in connection with any
blue sky survey; (v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriter in connection with, securing any required review
by the NASD of the terms of the Offering; (vi) all fees and expenses in
connection with listing the Shares on the NYSE; (vii) all travel expenses of the
Company's officers and employees and any other expense of the Company incurred
in connection with attending or hosting meetings with prospective purchasers of
the Shares and (viii) any stock transfer taxes incurred in connection with this
Agreement or the Offering. The Company also will pay or cause to be paid: (x)
the cost of preparing stock certificates representing the Shares; (y) the cost
and charges of any transfer agent or registrar for the Shares; and (z) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section 5. It is
understood, however, that except as provided in this Section, and Sections 7, 8
and 11 hereof, the Underwriter will pay all of their own costs and expenses,
including the fees of their counsel and stock transfer taxes on resale of any of
the Shares by them. Notwithstanding anything to the contrary in this Section 5,
in the event that this Agreement is terminated pursuant to Section 6 or 11(b)
hereof, or subsequent to a Material Adverse Change, the Company will pay all
out-of pocket expenses of the Underwriter (including but not limited to fees and
disbursements of counsel to the Underwriter) incurred in connection herewith.
6. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Underwriter's Counsel
pursuant to this Section 6 of any misstatement or omission, to the performance
by the Company of its obligations hereunder, and to each of the following
additional conditions:
(a) The Registration Statement shall be effective and all
necessary regulatory or stock exchange approvals shall have been received not
later than 5:30 P.M., New York time, on the date of this Agreement, or at such
later time and date as shall have been consented to in writing by the
Underwriter; if the Company shall have elected to rely upon Rule 430A or Rule
434 under the Securities Act, the Prospectus shall have been filed with the
Commission in a timely fashion in accordance with Section 4(a) hereof and a form
of the Prospectus containing information relating to the description of the
Shares and the method of distribution and similar matters shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time period;
and, at or prior to the Closing Date no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment
19
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the written
opinion of Sheppard, Mullin, ▇▇▇▇▇▇▇ & Hampton LLP, counsel for the Company, and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of the Company, dated the Closing Date
addressed to the Underwriter substantially in the form attached hereto as
Annexes I and II.
(c) The Company shall have requested and caused (i) ▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, special regulatory counsel for the Company, to have furnished to
the Underwriter its opinion, dated the Closing Date and addressed to the
Underwriter, substantially in the form attached hereto as Annex III and (ii)
▇▇▇▇▇ Raysman ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special intellectual property
counsel for the Company, to have furnished to the Underwriter its opinion, dated
the Closing Date and addressed to the Underwriter, substantially in the form
attached hereto as Annex IV.
(d) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to the Underwriter and to Underwriter's
Counsel, and the Underwriter shall have received from Underwriter's Counsel a
favorable written opinion, dated as of the Closing Date, with respect to the
issuance and sale of the Shares, the Registration Statement and the Prospectus
and such other related matters as the Underwriter may require, and the Company
shall have furnished to Underwriter's Counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(e) At the Closing Date you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of
the Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date all agreements,
conditions and obligations of the Company to be performed or complied with
hereunder on or prior thereto have been duly performed or complied with, (iv)
the Company and the Subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and (v)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus there has not been any material
adverse change or any development involving a prospective material adverse
change, whether or not arising from transactions in the ordinary course of
business, in or affecting (x) the business, condition (financial or otherwise),
results of operations, stockholders' equity or properties of the Company and the
Subsidiaries, individually or taken as a whole; (y) the long-term debt or
capital stock of the Company or any of its Subsidiaries; or (z) the Offering or
consummation of any of the other transactions contemplated by this Agreement,
the Registration Statement and the Prospectus.
(f) At the time this Agreement is executed and at the Closing
Date, you shall have received a comfort letter, from PWC, dated, respectively,
as of the date of this
20
Agreement and as of the Closing Date addressed to the Underwriter and in form
and substance satisfactory to the Underwriter and Underwriter's Counsel.
(g) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from PWC, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the Underwriter
and in form and substance satisfactory to the Underwriter and Underwriter's
Counsel, stating that nothing caused them to believe that the unaudited pro
forma information of the Company included in the Registration Statement does not
comply as to form with the applicable accounting requirements of Rule 11-02 of
Regulation S-X promulgated under the Securities Act or that the pro forma
adjustments have not been applied properly to the historical amounts in the
compilation of such statements.
(h) At the time this Agreement is executed and at the Closing
Date, you shall have received a comfort letter, from D&T, dated, respectively,
as of the date of this Agreement and as of the Closing Date addressed to the
Underwriter and in form and substance satisfactory to the Underwriter and
Underwriter's Counsel.
(i) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any Subsidiary or any change or
development involving a change, whether or not arising from transactions in the
ordinary course of business, in the business, condition (financial or
otherwise), results of operations, stockholders' equity, properties or prospects
of the Company and the Subsidiaries, individually or taken as a whole, including
but not limited to the occurrence of any fire, flood, storm, explosion, accident
or other calamity at any of the properties owned or leased by the Company or any
of its Subsidiaries, the effect of which, in any such case described above, is,
in the judgment of the Underwriter, so material and adverse as to make it
impracticable or inadvisable to proceed with the Offering on the terms and in
the manner contemplated in the Prospectus (exclusive of any supplement).
(j) Subsequent to the date hereof and prior to the Closing
Date or Additional Closing Date, as the case may be, no downgrading shall have
occurred in the Company's corporate credit rating or the rating accorded the
Company's debt securities or preferred stock by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act) and no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(k) You shall have received a duly executed lock-up agreement
from each person who is a director or officer of the Company, in each case
substantially in the form attached hereto as Annex V.
(l) At the Closing Date, the Shares shall have been approved
for listing on the NYSE.
21
(m) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal,
state or foreign governmental or regulatory authority that would, as of the
Closing Date, prevent the issuance or sale of the Shares; and no injunction or
order of any federal, state or foreign court shall have been issued that would,
as of the Closing Date, prevent the issuance or sale of the Shares.
(n) The Company shall have furnished the Underwriter and
Underwriter's Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriter's Counsel pursuant to this Section 6 shall not be satisfactory in
form and substance to the Underwriter and to Underwriter's Counsel, all
obligations of the Underwriter hereunder may be cancelled by the Underwriter at,
or at any time prior to, the Closing Date and the obligations of the Underwriter
to purchase the Additional Shares may be cancelled by the Underwriter at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing, or by telephone. Any such telephone
notice shall be confirmed promptly thereafter in writing.
7. Indemnification.
(a) The Company shall indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to reasonable attorneys' fees and any and
all other reasonable expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in (A) the Registration Statement, as originally filed
or any amendment thereof, or any related Preliminary Prospectus or the
Prospectus, or in any supplement thereto or amendment thereof, or (B) in any
materials or information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the Shares,
including any road show or investor presentations made to investors by the
Company (whether in person or electronically) ("Marketing Materials"), or (ii)
the omission or alleged omission to state in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or in any
Marketing Materials, a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that the
Company will not be liable in any such case to the extent but only to the extent
that any such loss, liability, claim, damage or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, as originally filed or any
amendment thereof, or any related Preliminary Prospectus or the Prospectus, or
in any supplement thereto or amendment thereof, in reliance upon and in
conformity with written
22
information furnished to the Company by or on behalf of the Underwriter
expressly for use therein. The foregoing indemnity agreement with respect to any
Preliminary Prospectus shall not inure to the benefit of the Underwriter if it
has failed to deliver a Prospectus (as then amended or supplemented, provided by
the Company to the Underwriter in the requisite quantity and on a timely basis
to permit proper delivery on or prior to the Closing Date) to the person
asserting any losses, claims, damages and liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, if such material misstatement or omission
or alleged material misstatement or omission was cured, as determined by a court
of competent jurisdiction in a decision not subject to further appeal, in such
Prospectus and such Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person. The parties agree that such
information provided by or on behalf of the Underwriter consists solely of the
material referred to in the last sentence of Section 1(b) hereof. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have, including but not limited to other liability under this Agreement.
(b) The Underwriter shall indemnify and hold harmless the
Company, each of the directors of the Company, each of the officers of the
Company who shall have signed the Registration Statement, and each other person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Underwriter specifically for use therein; provided, however, that in no case
shall the Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares to be purchased by the
Underwriter hereunder. The parties agree that such information provided by or on
behalf of the Underwriter consists solely of the material referred to in the
last sentence of Section 1(b) hereof. This indemnity will be in addition to any
liability which the Underwriter may otherwise have, including but not limited to
other liability under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of any claims or the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such
23
subsection, notify each party against whom indemnification is to be sought in
writing of the claim or the commencement thereof (but the failure so to notify
an indemnifying party shall not relieve the indemnifying party from any
liability which it may have under this Section 7, except to the extent that it
has been materially prejudiced by such omission). In case any such claim or
action is brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate, at its own expense in the defense of such action, and to the extent
it may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified party; provided
however, that counsel to the indemnifying party shall not (except with the
written consent of the indemnified party) also be counsel to the indemnified
party. Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
or parties unless (i) the employment of such counsel shall have been authorized
in writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, (iii) the indemnifying party does not diligently
defend the action after assumption of the defense, or (iv) such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. No
indemnifying party shall, without the prior written consent of the indemnified
parties, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened claim, investigation, action
or proceeding in respect of which indemnity or contribution may be or could have
been sought by an indemnified party under this Section 7 or Section 8 hereof
(whether or not the indemnified party is an actual or potential party thereto),
unless (x) such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such claim,
investigation, action or proceeding and (ii) does not include a statement as to
or an admission of fault, culpability or any failure to act, by or on behalf of
the indemnified party, and (y) the indemnifying party confirms in writing its
indemnification obligations hereunder with respect to such settlement,
compromise or judgment.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriter shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Underwriter,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, officers of the Company who signed the Registration Statement
and directors of the Company) as incurred to which the Company and one or more
of the Underwriter may be subject, in such proportions as is
24
appropriate to reflect the relative benefits received by the Company and the
Underwriter from the Offering or, if such allocation is not permitted by
applicable law, in such proportions as are appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
and the Underwriter in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Underwriter shall be deemed to be in the same proportion as
(x) the total proceeds from the Offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bears to (y)
the underwriting discount or commissions received by the Underwriter, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of each of the Company and of the Underwriter shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriter
agree that it would not be just and equitable if contribution pursuant to this
Section 8 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 8 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 any judicial,
regulatory or other legal or 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 8, (i) the Underwriter shall not be required to contribute any
amount in excess of the amount by which the discounts and commissions applicable
to the Shares and distributed to the public exceeds the amount of any damages
which the Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls the Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Underwriter, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to clauses
(i) and (ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 8 or
otherwise.
9. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Underwriter and the Company
contained in this Agreement or in certificates of officers of the Company or any
Subsidiary submitted pursuant
25
hereto, including the agreements contained in Section 5, the indemnity
agreements contained in Section 7 and the contribution agreements contained in
Section 8, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriter or any controlling person
thereof or by or on behalf of the Company, any of its officers and directors or
any controlling person thereof, and shall survive delivery of and payment for
the Shares to and by the Underwriter. The representations contained in Section 1
and the agreements contained in Sections 5, 7, 8, 9 and 10 hereof shall survive
any termination of this Agreement, including termination pursuant to Section 10
hereof.
10. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the execution
of this Agreement. Notwithstanding any termination of this Agreement, the
provisions of this Section 10 and of Sections 1, 5, 7, 8 and 10 through 16,
inclusive, shall remain in full force and effect at all times after the
execution hereof.
(b) The Underwriter shall have the right to terminate this
Agreement at any time prior to the Closing Date or to terminate the obligations
of the Underwriter to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if (i) any domestic or
international event or act or occurrence has materially disrupted, or in the
opinion of the Underwriter will in the immediate future materially disrupt, the
market for the Company's securities or securities in general; or (ii) trading on
the NYSE shall have been suspended or been made subject to material limitations,
or minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the NYSE or by
order of the Commission or any other governmental authority having jurisdiction;
or (iii) a banking moratorium has been declared by any state or federal
authority or if any material disruption in commercial banking or securities
settlement or clearance services shall have occurred; or (iv) (A) there shall
have occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national emergency or
war by the United States or (B) there shall have been any other calamity or
crisis or any change in political, financial or economic conditions if the
effect of any such event in (A) or (B), in the judgment of the Underwriter,
makes it impracticable or inadvisable to proceed with the offering, sale and
delivery of the Firm Shares or the Additional Shares, as the case may be, on the
terms and in the manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 10
shall be in writing.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (other than pursuant to (i) notification by the
Underwriter as provided in Section 10(a) hereof), or if the sale of the Shares
provided for herein is not consummated because any condition to the obligations
of the Underwriter set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will, subject to demand by the
Underwriter, reimburse the Underwriter for all out-of-pocket expenses (including
the fees and expenses of their counsel), incurred by the Underwriter in
connection herewith.
26
11. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing, and:
(a) if sent to the Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to the Underwriter at Bear, ▇▇▇▇▇▇▇ & Co. Inc.,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ Parish, Senior
Managing Director, Equity Capital Markets, with a copy to Underwriter's Counsel
at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, 200 Park Avenue, The Met ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. Annex, Esq.; and
(b) if sent to the Company, shall be mailed, delivered, or
faxed and confirmed in writing to the Company and its counsel at the addresses
set forth in the Registration Statement, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive
Vice President, General Counsel, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., respectively.
Any such notices and other communications shall take effect at the time of
receipt thereof.
12. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriter and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 7 and
8 hereof, and their respective successors and assigns, and no other person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue 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 parties hereto and said
controlling persons and their respective successors, officers, directors, heirs
and legal representatives, and it is not for the benefit of any other person,
firm or corporation. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from the Underwriter.
13. Governing Law and Jurisdiction; Waiver of Jury Trial. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. The Company irrevocably (a) submits to the jurisdiction of
any court of the State of New York or the United State District Court for the
Southern District of the State of New York for the purpose of any suit, action,
or other proceeding arising out of this Agreement, or any of the agreements or
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus (each, a "Proceeding"), (b) agrees that all claims in respect of any
Proceeding may be heard and determined in any such court, (c) waives, to the
fullest extent permitted by law, any immunity from jurisdiction of any such
court or from any legal process therein, (d) agrees not to commence any
Proceeding other than in such courts, and (e) waives, to the fullest extent
permitted by law, any claim that such Proceeding is brought in an inconvenient
forum. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY
LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall
27
together constitute one and the same instrument. Delivery of a signed
counterpart of this Agreement by facsimile transmission shall constitute valid
and sufficient delivery thereof.
15. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
16. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[signature page follows]
28
If the foregoing correctly sets forth your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.
Very truly yours,
VALEANT PHARMACEUTICALS INTERNATIONAL
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
General Counsel
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇▇▇▇▇▇▇ Parish
----------------------------------
Name: ▇▇▇▇▇▇▇ Parish
Title: Senior Managing Director
EXHIBIT A
Subsidiaries
Ribapharm, Inc. (Delaware)
ICN Dutch Holdings B.V. (Netherlands)
ICN Farmaceutica Ltda. (Mexico)
ICN International AG (Switzerland)
ICN Polfa Rzeszow SA (Poland)
Laboratorios ▇▇▇▇▇▇▇▇, ▇. ▇. (Mexico)
Laboratorios ▇▇▇▇▇ ▇.▇. de C.V. (Mexico)
Valeant Development Company Pte. Ltd. (Singapore)
Valeant Global Acquisition Pte. Ltd. (Singapore)
ANNEX V
Form of Lock-Up Agreement
February __, 2005
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Equity Capital Markets
Valeant Pharmaceuticals International Lock-Up Agreement
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed public
offering (the "Offering") by Valeant Pharmaceuticals International, a Delaware
corporation (the "Company"), of its common stock, $.01 par value (the "Stock").
In order to induce you (the "Underwriter") to underwrite the Offering, the
undersigned hereby agrees that, without the prior written consent of Bear,
▇▇▇▇▇▇▇ & Co. Inc. ("Bear ▇▇▇▇▇▇▇"), during the period from the date hereof
until ninety (90) days from the date of the final prospectus for the Offering
(the "Lock-Up Period"), the undersigned (a) will not, directly or indirectly,
offer, sell, agree to offer or sell, solicit offers to purchase, grant any call
option or purchase any put option with respect to, pledge, borrow or otherwise
dispose of any Relevant Security (as defined below), and (b) will not establish
or increase any "put equivalent position" or liquidate or decrease any "call
equivalent position" with respect to any Relevant Security (in each case within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder), or otherwise enter into
any swap, derivative or other transaction or arrangement that transfers to
another, in whole or in part, any economic consequence of ownership of a
Relevant Security, whether or not such transaction is to be settled by delivery
of Relevant Securities, other securities, cash or other consideration. As used
herein "Relevant Security" means the Stock, any other equity security of the
Company or any of its subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Stock or other such equity security.
The undersigned hereby authorizes the Company during the Lock-Up Period to
cause any transfer agent for the Relevant Securities to decline to transfer, and
to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of Bear ▇▇▇▇▇▇▇, during the Lock-up
Period the undersigned (x) will not file or participate in the filing with the
Securities and Exchange Commission of any registration statement, or circulate
or participate in the circulation of any preliminary or final prospectus or
other disclosure document with respect
to any proposed offering or sale of a Relevant Security and (y) will not
exercise any rights the undersigned may have to require registration with the
Securities and Exchange Commission of any proposed offering or sale of a
Relevant Security.
Notwithstanding the foregoing, (i) the undersigned may transfer Relevant
Securities by bona fide gift, will or intestate succession, (ii) the undersigned
may transfer Relevant Securities to a trust for the benefit of one or more of
the undersigned and members of the immediate family of the undersigned and (iii)
if the undersigned is a partnership, limited liability company or corporation,
the undersigned may make a general distribution of Relevant Securities to its
partners, members or shareholders, provided as to each of (i), (ii) and (iii)
above, each resulting transferee of Relevant Securities executes and delivers to
you an agreement satisfactory to you certifying that such transferee is bound by
the terms of this Agreement and has been in compliance with the terms hereof
since the date first above written as if it had been an original party hereto.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.
Very truly yours,
By:
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Print Name:
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