Exhibit 4.3
VALEANT PHARMACEUTICALS INTERNATIONAL
$300,000,000 7.0% SENIOR NOTES DUE 2011
REGISTRATION RIGHTS AGREEMENT
December 12, 2003
Bear, ▇▇▇▇▇▇▇ & Co. Inc.,
As representative of the several Purchasers
named in Schedule I to the Purchase Agreement,
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Ladies and Gentlemen:
Valeant Pharmaceuticals International, a Delaware corporation (the
"Company"), proposes to issue and sell to the Purchasers (as defined herein)
upon the terms set forth in the Purchase Agreement (as defined herein)
$300,000,000 principal amount of the 7.0% Senior Notes Due 2011 (the "Notes").
The Notes will be issued under an Indenture (as defined herein).
Ribapharm Inc. ("Ribapharm"), a wholly owned subsidiary of the Company, is
an obligor with respect to the Notes and shall be subject to the provisions of
this Agreement, jointly and severally with the Company, but only for so long as
Ribapharm shall have outstanding obligations under the 6-1/2% Convertible
Subordinated Notes due 2008, originally issued under an Indenture, dated as of
July 18, 2001, among Valeant Pharmaceuticals International, Ribapharm and The
Bank of New York, as Trustee.
In order to induce the Purchasers to purchase the Notes, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Purchasers as set forth in Section 7 of the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Purchase Agreement. As used in this Agreement,
the following defined terms shall have the following meanings:
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Broker-Dealer" means any broker or dealer registered under the Exchange
Act.
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"business day" means a day that is not a Saturday, Sunday or a day on
which banking institutions in New York, New York are required by law, regulation
or executive order to remain closed.
"Closing Date" means the date of this Agreement.
"Commission" means the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
"Consummate:" An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Securities Act of the Exchange Offer Registration Statement relating to the
Exchange Notes to be issued in the Exchange Offer, (b) the maintenance of such
Exchange Offer Registration Statement continuously effective and the keeping of
the Exchange Offer open for a period not less than the period required pursuant
to Section 3(b) hereof and (c) the delivery by the Company to the Registrar
under the Indenture of Exchange Notes in the same aggregate principal amount as
the aggregate principal amount of Notes properly tendered and not subsequently
withdrawn by Holders thereof pursuant to the Exchange Offer.
"Consummation Deadline" has the meaning set forth in Section 3(a) hereof.
"Effectiveness Deadline" has the meaning set forth in Sections 3(a) and
4(a) hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Exchange Dealer" has the meaning set forth in Section 3(c) hereof.
"Exchange Notes" means the 7.0% Senior Notes due 2011 to be issued by the
Company and Ribapharm, if, at the time of the issuance of the Exchange Notes,
Ribapharm is a co-obligor on the Notes, pursuant to the Indenture: (i) in the
Exchange Offer or (ii) as contemplated by Section 4 hereof.
"Exchange Offer" means the exchange and issuance by the Company and
Ribapharm, if, at the time of the issuance of the Exchange Notes, Ribapharm is a
co-obligor on the Notes, of a principal amount of Exchange Notes (which shall be
registered pursuant to the Exchange Offer Registration Statement) equal to the
outstanding principal amount of Notes that are properly tendered and not
subsequently withdrawn by the Holders thereof in connection with such exchange
and issuance.
"Exchange Offer Registration Statement" means the Registration Statement
relating to the Exchange Offer, including the related Prospectus.
"Exempt Resales" means the transactions in which the Purchasers propose to
sell the Notes to certain "qualified institutional buyers," as such term is
defined in Rule 144A under the Securities Act and pursuant to Regulation S under
the Securities Act.
"Filing Deadline" has the meaning set forth in Sections 3(a) and 4(a)
hereof.
"Holder" has the meaning set forth in Section 2 hereof.
"Indenture" means the Indenture, dated as of December 12, 2003, among the
Company, Ribapharm and The Bank of New York, as amended and supplemented from
time to time in accordance with its terms.
"indemnified party" has the meaning set forth in Section 8(c) hereof.
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"indemnifying party" has the meaning set forth in Section 8(c) hereof.
"liquidated damages" has the meaning assigned thereto in Section 5(a)
hereof.
"Notes" has the meaning set forth in the preamble of this Agreement.
person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
"Purchase Agreement" means the purchase agreement, dated December 9, 2003,
among the Purchasers, the Company and Ribapharm relating to the Notes.
"Purchasers" means the Purchasers named in Schedule I to the Purchase
Agreement.
"Recommencement Date" has the meaning set forth in Section 6(d) hereof.
"Registration Default" has the meaning set forth in Section 5 hereof.
"Registration Statement" means any registration statement of the Company
and Ribapharm (if Ribapharm is, at the time of the filing of such registration
statement, a co-obligor on the Notes) relating to (a) an offering of Exchange
Notes pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration Statement, in
each case, (i) that is filed pursuant to the provisions of this Agreement and
(ii) including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Requesting Holders" has the meaning set forth in Section 6(c)(xi)(A).
Rule 144" means Rule 144 promulgated under the Securities Act.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Shelf Registration Statement" has the meaning set forth in Section 4(a)
hereof.
"Suspension Notice" has the meaning set forth in Section 6(d) hereof.
"TIA" means The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
"Transfer Restricted Securities" means each Note, until the earliest to
occur of (i) the date on which such Note is exchanged by a Person other than a
Broker-Dealer for an Exchange Note in the Exchange Offer, (ii) following the
exchange by a Broker-Dealer in the Exchange Offer of a Note for an Exchange
Note, the date on which such Exchange Note is sold to a purchaser who receives
from such Broker-Dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Note has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement; or (iv) the
date on which such Note is distributed to the public pursuant to Rule 144.
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"underwriter" means any underwriter of Transfer Restricted Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. Holders.
A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.
3. Registered Exchange Offer.
(a) Unless the Exchange Offer shall not be permitted by applicable law
or Commission policy (after the procedures set forth in Section 6(a)(i) below
have been complied with), the Company and Ribapharm shall (i) use reasonable
best efforts to file the Exchange Offer Registration Statement with the
Commission on or prior to 90 days (unless such date is not a business day, then
the next succeeding business day) after the Closing Date (such 90th day being
the "Filing Deadline"), (ii) use reasonable best efforts to cause such Exchange
Offer Registration Statement to be declared effective by the Commission on or
prior to 270 days (unless such date is not a business day, then the next
succeeding business day) after the Closing Date (such 270th day being the
"Effectiveness Deadline"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to be declared effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Securities Act and (C) cause all
necessary filings, if any, in connection with the registration and qualification
of the Exchange Notes to be made under the Blue Sky laws of such jurisdictions
as are necessary to permit Consummation of the Exchange Offer, provided that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general service of process or taxation in any jurisdiction where
it is not then so subject and (iv) (A) the Company and Ribapharm will commence
the Exchange Offer; and (B) use reasonable best efforts to issue on or prior to
30 business days, or longer, if required by the federal securities laws (such
30th or later day being the "Consummation Deadline"), after the date on which
the Exchange Offer Registration Statement was declared effective by the
Commission, Exchange Notes in exchange for all Notes properly tendered and not
subsequently withdrawn prior thereto in the Exchange Offer. The Exchange Offer
shall be on the appropriate form permitting (i) registration of the Exchange
Notes to be offered in exchange for the Notes that are Transfer Restricted
Securities and (ii) resales of Exchange Notes by Broker-Dealers that tendered
into the Exchange Offer Notes that such Broker-Dealer acquired for its own
account as a result of market making activities or other trading activities
(other than Notes acquired directly from the Company or any of its Affiliates)
as contemplated by Section 3(c) below.
(b) The Company and Ribapharm shall use their reasonable best efforts to
cause the Exchange Offer Registration Statement to be effective continuously,
and shall keep the Exchange Offer open, for a period of not less than the
minimum period required under applicable federal and state securities laws to
Consummate the Exchange Offer; provided, however, that in no event shall such
period be less than 20 business days. The Company and Ribapharm shall cause the
Exchange Offer to comply with all applicable federal and state securities laws.
No securities other than the Exchange Notes shall be included in the Exchange
Offer Registration Statement.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (an "Exchange Dealer") (other than Notes
acquired directly from the Company or any Affiliate of the Company), may
exchange such Transfer Restricted Securities pursuant to the Exchange Offer.
Such "Plan of Distribution" section shall also contain all other information
with respect to such sales by such Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
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Distribution" shall not name any such Broker-Dealer or disclose the amount of
Transfer Restricted Securities held by any such Broker-Dealer, except to the
extent required by the Commission as a result of a change in policy, rules or
regulations after the date of this Agreement. See the Shearman & Sterling
no-action letter (available July 2, 1993).
Because such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Securities Act and must, therefore, deliver a prospectus meeting
the requirements of the Securities Act in connection with its initial sale of
any Exchange Notes received by such Broker-Dealer in the Exchange Offer, the
Company and Ribapharm shall permit the use of the Prospectus contained in the
Exchange Offer Registration Statement by such Broker-Dealer to satisfy such
prospectus delivery requirement. To the extent necessary to ensure that the
Prospectus contained in the Exchange Offer Registration Statement is available
for sales of Exchange Notes by Broker-Dealers, the Company and Ribapharm agree
to use their reasonable best efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of Section 6(a) and (c) hereof and in
conformity with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of 270 days from the Consummation Deadline or such shorter
period as will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company and
Ribapharm shall provide sufficient copies of the latest version of such
Prospectus to such Broker-Dealers, promptly upon request, and in no event later
than one day after such request, at any time during such period.
4. Shelf Registration.
(a) Shelf Registration. If (i) the Company and Ribapharm are not (A)
required to file the Exchange Offer Registration Statement or (B) permitted to
Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder of Transfer Restricted
Securities shall notify the Company within 20 days following the Consummation
Deadline that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer; (B) such Holder may not resell the Exchange
Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder; or
(C) such Holder is a Broker-Dealer and holds Notes acquired directly from the
Company or any of its Affiliates, then the Company and Ribapharm will file a
Shelf Registration Statement (as defined below) to cover resales of the Notes by
Holders of the Notes who satisfy the conditions set forth in Section 4(b) hereof
relating to the provision of information in connection with the Shelf
Registration Statement. If obligated to file a Shelf Registration Statement, the
Company and Ribapharm shall use commercially reasonable efforts to:
(x) file, on or prior to 30 days after the earlier of (i) the date on
which the Company determines that the Exchange Offer Registration Statement
cannot be filed as a result of clause (a)(i) above and (ii) the date on which
the Company receives the notice specified in clause (a)(ii) above, (such 30th
day, the "Filing Deadline"), a shelf registration statement pursuant to Rule 415
under the Securities Act (which may be an amendment to the Exchange Offer
Registration Statement (the "Shelf Registration Statement")), relating to all
Transfer Restricted Securities, the Holders of which shall have provided the
information required by Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be declared effective by
the Commission on or prior to 90 days after the obligation arises for the Shelf
Registration Statement (such 90th day being the "Effectiveness Deadline").
If, after the Company and Ribapharm have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Company and Ribapharm are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable federal law (i.e., clause (a)(i) above), then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy the
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requirements of clause (x) above; provided that, in such event, the Company and
Ribapharm shall remain obligated to meet the Effectiveness Deadline set forth in
clause (y).
To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the Exchange Notes required to
be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
Ribapharm shall use their reasonable best efforts to keep any Shelf Registration
Statement required by this Section 4(a) continuously effective, supplemented,
amended and current as required by and subject to the provisions of Sections
6(b) and (c) hereof and in conformity with the requirements of this Agreement,
the Securities Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(d) hereof) following the Closing Date, or such shorter
period as will terminate when all Transfer Restricted Securities covered by such
Shelf Registration Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or Item 508 of Regulation S-K, as applicable,
under the Securities Act for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. No Holder of
Transfer Restricted Securities shall be entitled to liquidated damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
information by the applicable deadline. Each selling Holder agrees to promptly
furnish additional information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
5. Liquidated Damages.
(a) If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Company and Ribapharm fail to Consummate the Exchange Offer within 30 business
days following the Effectiveness Target Date with respect to the Exchange Offer
Registration Statement, unless extended as required by the Commission or (iv)
any Registration Statement required by this Agreement is filed and declared
effective but thereafter ceases to be effective or usable in connection with
resales of Transfer Restricted Securities during the period specified herein
(each such event referred to in clauses (i) through (iv), a "Registration
Default"), then the Company and Ribapharm hereby jointly and severally agree to
pay to each Holder of Transfer Restricted Securities affected thereby liquidated
damages in an amount equal to $.05 per week per $1,000 principal amount of Notes
constituting Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues for the first 90-day
period immediately following the occurrence of such Registration Default
("liquidated damages"). The amount of the liquidated damages shall increase by
an additional $.05 per week per $1,000 principal amount of Notes constituting
Transfer Restricted Securities with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
liquidated damages of $.50 per week per $1,000 principal amount of Notes
constituting Transfer Restricted Securities; provided that the Company and
Ribapharm shall in no event be required to pay liquidated damages for more than
one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or
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made usable in the case of (iv) above, the liquidated damages payable with
respect to the Transfer Restricted Securities as a result of such clause (i),
(ii), (iii) or (iv), as applicable, shall cease.
(b) All accrued liquidated damages shall be paid to the Holders of
Transfer Restricted Securities, in the manner provided for the payment of
interest in the Indenture, on each Interest Payment Date, as more fully set
forth in the Indenture and the Notes. Notwithstanding the fact that any
securities for which liquidated damages are due cease to be Transfer Restricted
Securities, all obligations of the Company and Ribapharm to pay liquidated
damages with respect to securities with respect to the period prior to the time
the securities ceased to be Transfer Restricted Securities shall survive until
such time as such obligations with respect to such securities shall have been
satisfied in full.
(c) A Registration Default referred to in Section 5(a) hereof shall be
deemed not to have occurred and be continuing in relation to a Registration
Statement or the related Prospectus if such Registration Default has occurred
solely as a result of material events, with respect to the Company that would
need to be described in such Registration Statement or the related Prospectus
and the Company has provided written notice to the Purchasers that such an event
has occurred, which notice need not specify the nature of the event that has
occurred, and that a Registration Default would have occurred but for the
provisions of this section; provided, however, that in any case if such
Registration Default occurs for a continuous period in excess of 60 days,
liquidated damages shall be payable in accordance with Section 5(a) from the day
such Registration Default originally occurred.
(d) Except as provided in Section 10(a) hereof, the liquidated damages
as set forth in this Section 5 shall be the exclusive monetary remedy available
to the Holders of Registrable Securities for such Registration Default. In no
event shall the Company be required to pay liquidated damages in excess of the
applicable maximum amount of $.50 per week per $1,000 principal amount of Notes
constituting Transfer Restricted Securities set forth above, regardless of
whether one or multiple Registration Defaults exist.
6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and Ribapharm shall, subject to the provisions
Section 5(c) above, (x) comply with all applicable provisions of Section 6(c)
below, (y) use their respective reasonable best efforts to effect such exchange
and to permit the resale of Exchange Notes by Broker-Dealers that tendered in
the Exchange Offer Notes that such Broker-Dealer acquired for its own account as
a result of its market making activities or other trading activities (other than
Notes acquired directly from the Company or any of its Affiliates) being sold in
accordance with the intended method or methods of distribution thereof, and (z)
comply with all of the following provisions:
(i) If, following the date hereof, there has been announced a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the Company
raises a substantial question as to whether the Exchange Offer is
permitted by applicable federal law, or the Company and Ribapharm are not
(A) required to file the Exchange Offer Registration Statement, (B)
permitted to Consummate the Exchange Offer because the Exchange Offer is
not permitted by applicable law or Commission policy or (C) obligated to
file the Shelf Registration Statement, the Company and Ribapharm hereby
agree to seek a no-action letter or other favorable decision from the
Commission allowing the Company and Ribapharm to Consummate an Exchange
Offer for such Transfer Restricted Securities. The Company and Ribapharm
hereby agree to pursue the issuance of such a decision to the Commission
staff level. In connection with the foregoing, the Company and Ribapharm
hereby agree to take all such other actions as may be requested by the
Commission or are otherwise required in connection with the issuance of
such decision, including without limitation (A) participating in
telephonic conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any,
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upon which such counsel has concluded that such an Exchange Offer should
be permitted and (C) diligently pursuing a resolution (which need not be
favorable) by the Commission staff;
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange Offer, a
written representation to the Company and Ribapharm (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an Affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate in,
a distribution of the Exchange Notes to be issued in the Exchange Offer
and (C) it is acquiring the Exchange Notes in its ordinary course of
business. As a condition to its participation in the Exchange Offer each
Holder using the Exchange Offer to participate in a distribution of the
Exchange Notes shall acknowledge and agree that, if the resales are of
Exchange Notes obtained by such Holder in exchange for Notes acquired
directly from the Company or an Affiliate thereof, it (1) could not, under
Commission policy as in effect on the date of this Agreement, rely on the
position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988) and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co., Inc.
(available June 5, 1991), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with
a secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or
Item 508, as applicable, of Regulation S-K; and
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and Ribapharm shall provide a supplemental letter
to the Commission (A) stating that the Company and Ribapharm are
registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available May
13, 1988) and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co., Inc. (available June 5, 1991) as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and, if applicable, any no-action letter obtained pursuant to
clause (i) above, (B) including a representation that neither the Company
nor Ribapharm has entered into any arrangement or understanding with any
Person to distribute the Exchange Notes to be received in the Exchange
Offer and that, to the best of the Company's and Ribapharm's information
and belief, each Holder participating in the Exchange Offer is acquiring
the Exchange Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes received in the Exchange Offer and (C)
any other undertaking or representation required by the Commission as set
forth in any no-action letter obtained pursuant to clause (i) above, if
applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and Ribapharm shall:
(i) comply with all the provisions of Section 6(c) below and use
their reasonable best efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof (as indicated in
the information furnished to the Company pursuant to Section 4(b) hereof),
and pursuant thereto the Company and Ribapharm will prepare and file with
the Commission a Registration Statement relating to the registration on
any appropriate form under the Securities Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance
with the intended method or methods of distribution thereof within the
time periods and otherwise in accordance with the provisions hereof; and
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(ii) issue, upon the request of any Holder or purchaser of the
Notes covered by any Shelf Registration Statement contemplated by this
Agreement, Exchange Notes having an aggregate principal amount equal to
the aggregate principal amount of Notes sold pursuant to the Shelf
Registration Statement and surrendered to the Company for cancellation;
the Company shall register Exchange Notes on the Shelf Registration
Statement for this purpose and issue the Exchange Notes to the purchasers
of securities subject to the Shelf Registration Statement in the names as
such purchasers shall designate.
(c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and Ribapharm
shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or Section 4 of
this Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein not misleading or
(B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company and
Ribapharm shall file promptly, subject to Section 5(c), an appropriate
amendment to such Registration Statement curing such defect, and, if
Commission review is required, use their reasonable best efforts to cause
such amendment to be declared effective as soon as practicable;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or Section 4 hereof, as the case
may be; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Securities Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the disposition of
all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise each Holder promptly and, if requested by such Holder,
confirm such advice in writing:
(A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed with the Commission
and, with respect to any applicable Registration Statement or
any post-effective amendment thereto, when the same has become
effective, in each case making a public announcement thereof
by release made to Reuters Economic Services and Bloomberg
Business News;
(B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the
Prospectus included therein or for additional information
relating thereto;
(C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the
initiation of any proceedings for such purposes; and
(D) of the occurrence of any event or the existence of any state
of facts (but not as to the substance of any such event or
facts) that requires the making of any changes in the
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Registration Statement or the Prospectus included therein so
that, as of such date, such Registration Statement and
Prospectus do not contain an untrue statement of a material
fact and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances
under which they were made) not misleading.
(iv) subject to Section 5(c), if any fact or event contemplated by
Section 6(c)(iii)(D) above shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(v) furnish to each Purchaser and each Holder named in the Shelf
Registration Statement in connection with such exchange or sale, if any,
before filing with the Commission, copies of any Registration Statement or
any Prospectus included therein or any amendments or supplements to any
such Registration Statement or Prospectus, which documents will be subject
to the review and comment of such Persons in connection with such sale, if
any, for a period of at least three business days, and the Company will
not file any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus to which such
Persons shall reasonably object within three business days after the
receipt thereof. A Holder shall be deemed to have reasonably objected to
such filing only if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains an untrue
statement of a material fact or omits to state any material fact necessary
to make the statements therein not misleading or fails to comply with the
applicable requirements of the Securities Act;
(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to each Holder in connection with such
exchange or sale, if any, make the Company's and Ribapharm's
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such Holders may reasonably
request;
(vii) make available, at reasonable times, for inspection by each
Holder and any attorney or accountant retained by such Holders, all
financial and other records, pertinent corporate documents of the Company
and Ribapharm and cause the Company's and Ribapharm's officers, directors
and employees to supply all information reasonably requested by any such
Holder, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness;
(viii) if requested by any Holders in connection with such exchange
or sale, promptly include in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such Holders may reasonably request to have included
therein, including, without limitation, information relating to the "Plan
of Distribution" of the Transfer Restricted Securities; and make all
required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after the Company is notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(ix) furnish to each Holder, upon such Holder's request, in
connection with such exchange or sale, without charge, at least one copy
of the Registration Statement, as first filed with the Commission,
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and of each amendment thereto, including, if such Holder so requests, all
documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(x) deliver to each Holder, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company and
Ribapharm hereby consent to the use (in accordance with law) of the
Prospectus and any amendment or supplement thereto by each selling Holder
in connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(xi) upon the request of (1) a Purchaser, but only in such firm's
capacity as an Exchanging Dealer or(2) Holders who collectively hold an
aggregate principal amount of the Transfer Restricted Securities in excess
of 20% of the outstanding principal amount of the Transfer Restricted
Securities (the "Requesting Holders"), enter into such agreements
(including underwriting agreements) and make such representations and
warranties and take all such other actions in connection therewith in
order to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any applicable Registration Statement contemplated
by this Agreement as may be reasonably requested by any Holder in
connection with any sale or resale pursuant to any applicable Registration
Statement. In such connection, the Company and Ribapharm shall:
(A) upon request of the Purchaser or the Requesting Holders,
as applicable, furnish (or in the case of paragraphs (2) and (3),
use its reasonable best efforts to cause to be furnished) to each
Holder, upon Consummation of the Exchange Offer or upon the
effectiveness of the Shelf Registration Statement, as the case may
be:
(1) a certificate, dated such date, signed on behalf
of the Company and Ribapharm by (x) the President or any Vice
President and (y) a principal financial or accounting officer
of the Company and Ribapharm, confirming, as of the date
thereof, the matters set forth in Sections 8(a), 8(b), 8(c)
and 8(d) of the Purchase Agreement and such other similar
matters as such Holders may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and Ribapharm covering matters similar to those set
forth in paragraph (h) of Section 8 of the Purchase Agreement
and such other matters as such the Purchaser or the Requesting
Holders may reasonably request, and in any event including a
statement to the effect that such counsel has participated in
conferences with officers and other representatives of the
Company and Ribapharm, representatives of the independent
public accountants for the Company and Ribapharm and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness
of such statements; and that such counsel advises that, on the
basis of the foregoing (relying as to materiality to the
extent such counsel deems appropriate upon the statements of
officers and other representatives of the Company and
Ribapharm and without independent check or verification), no
facts came to such counsel's attention that caused such
counsel to believe that the applicable Registration Statement,
at the time such Registration Statement or any post-effective
amendment thereto became effective and, in the case of the
Exchange Offer Registration Statement, as of the date of
Consummation of the Exchange Offer, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date
-11-
and, in the case of the opinion dated the date of Consummation
of the Exchange Offer, as of the date of Consummation,
contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such counsel
assumes no responsibility for, and has not independently
verified, the accuracy, completeness or fairness of the
financial statements, notes and schedules and other financial
data included in any Registration Statement contemplated by
this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters and agreed upon procedures letters, as
applicable, delivered pursuant to Section 7(e) of the Purchase
Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any customary
conditions contained in the any agreement entered into by the
Company and Ribapharm pursuant to this clause (xi);
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in connection
with the registration and qualification of the Transfer Restricted Securities
under the securities or Blue Sky laws of such jurisdictions as the selling
Holders may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that neither the Company nor Ribapharm shall be required to
register or qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to be sold
and not bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the selling
Holders may request at least two business days prior to such sale of Transfer
Restricted Securities;
(xiv) use their reasonable best efforts to cause the disposition of
the Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of a Registration Statement covering such
Transfer Restricted Securities and provide the Trustee under the Indenture with
printed certificates for the Transfer Restricted Securities which are in a form
eligible for deposit with the Depository Trust Company;
-12-
(xvi) otherwise use their respective reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 under the Securities Act (which
need not be audited) covering a twelve-month period beginning after the
effective date of the Registration Statement (as such term is defined in
paragraph (c) of Rule 158 under the Securities Act);
(xvii) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by this
Agreement and, in connection therewith, cooperate with the Trustee and the
Holders to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its best efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner; and
(xviii) provide promptly to each Holder, upon request, each document
filed with the Commission pursuant to the requirements of Section 13 or Section
15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"Suspension Notice"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "Recommencement
Date"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or Section 4 hereof, as applicable, shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the date of delivery of the Recommencement
Date.
7. Registration Expenses.
(a) All expenses incident to the Company's and Ribapharm's performance
of or compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Company and Ribapharm; (v) all application and filing fees in
connection with listing the Exchange Notes on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company and Ribapharm (including the expenses of any special audit and comfort
letters required by or incident to such performance).
The Company will, in any event, bear its and Ribapharm's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the
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expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company or Ribapharm.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), regardless of whether a
Registration Statement becomes effective, the Company and Ribapharm will
reimburse the Purchasers and the Holders of Transfer Restricted Securities who
are tendering Notes into in the Exchange Offer and/or selling or reselling Notes
or Exchange Notes pursuant to the "Plan of Distribution" contained in the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements of not more than one
counsel, who shall be Skadden, Arps, Slate, ▇▇▇▇▇▇▇ and ▇▇▇▇ LLP, unless another
firm shall be chosen by the Holders of a majority in principal amount of the
Transfer Restricted Securities for whose benefit such Registration Statement is
being prepared.
8. Indemnification
(a) The Company and Ribapharm agree, jointly and severally, to indemnify
and hold harmless each Holder, its directors, officers and each Person, if any,
who controls such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act), from and against any and all losses, claims,
damages, liabilities, judgments and expenses whatsoever (including without
limitation, any legal or other expenses reasonably incurred in connection with
investigating, preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement, preliminary prospectus or Prospectus (or any amendment or supplement
thereto) provided by the Company to any Holder or any prospective purchaser of
Exchange Notes or registered Notes, 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, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
and Ribapharm shall not be liable to any such Holder in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement or Prospectus, or amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company and Ribapharm by such Holder expressly for use therein.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and Ribapharm, and their
respective directors, officers, partners, employees, representatives and agents,
and each person, if any, who controls (within the meaning of Section 15 of the
Section Act or Section 20 of the Exchange Act) the Company, or Ribapharm to the
same extent as the foregoing indemnity from the Company and Ribapharm set forth
in section (a) above, but only with reference to information relating to such
Holder furnished in writing to the Company by or on behalf of such Holder
expressly for use in any Registration Statement, preliminary prospectus or
Prospectus (or any amendment or supplement thereto.) In no event shall any
Holder, its directors, officers or any Person who controls such Holder be liable
or responsible for any amount in excess of the amount by which the total amount
received by such Holder with respect to its sale of the Transfer Restricted
Securities or Exchange Notes giving rise to such indemnification obligation
pursuant to a Registration Statement exceeds (i) the amount paid by such Holder
for such Transfer Restricted Securities and (ii) the amount of any damages that
such Holder, its directors, officers or any Person who controls such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or Section
8(b) (the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying person") in
writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability
-14-
which it may have under this Section 8 except to the extent that it has been
prejudiced in any material respect by such failure or from any liability which
it may otherwise have). In case any such action is brought against any
indemnified party, and such indemnified party notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent such indemnified party 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
reasonably satisfactory to such 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 the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) 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 party or 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 of counsel shall be
borne by the indemnifying parties. In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 8(a), and by
the Company and Ribapharm, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with the indemnified party's written consent or (ii) effected without the
indemnified party's written consent if the settlement is entered into more than
twenty business days after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
Ribapharm, on the one hand, and the Holders, on the other hand, from their sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and Ribapharm, on the
one hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and Ribapharm, on the one
hand, and of the Holder, on the other hand, 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 Ribapharm, on the one hand, or by the
Holder, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
-15-
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and judgments referred to above shall be deemed to
include, subject to the limitations set forth in the second paragraph of Section
8(a), any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company, Ribapharm and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter relating to such
losses, claims, damages, liabilities or judgments. Notwithstanding the
provisions of this Section 8, no Holder, its directors, its officers or any
Person, if any, who controls such Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of Transfer Restricted Securities pursuant
to a Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective principal amount
of Transfer Restricted Securities held by each Holder hereunder and not joint.
9. Rule 144A AND Rule 144
Each of the Company and Ribapharm agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or Ribapharm (i) is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A, and (ii) is subject to Section 13
or 15 (d) of the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144.
10. Miscellaneous.
(a) Specific Performance. The Company and Ribapharm acknowledge and
agree that any failure by the Company and/or Ribapharm to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Purchasers or the Holders for which there is no
adequate remedy at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of any such failure, the Purchasers or
any Holder may obtain such relief as may be required to specifically enforce the
Company's and Ribapharm's obligations under Sections 3 and 4 hereof. The Company
and Ribapharm further agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor Ribapharm will,
on or after the date of this Agreement, enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. Neither the
Company nor Ribapharm has previously entered into any agreement granting any
registration rights with respect to its securities to any Person. The rights
granted to the Holders hereunder do not in any way conflict with and are not
-16-
inconsistent with the rights granted to the holders of the Company's and
Ribapharm's securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and
Ribapharm, on the one hand, and the Purchasers, on the other hand, and shall
have the right to enforce such agreements directly to the extent they may deem
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), facsimile or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or Ribapharm:
Valeant Pharmaceuticals International
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Secretary
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if sent by facsimile; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this
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Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
VALEANT PHARMACEUTICALS INTERNATIONAL
/s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
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By:
Names: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Chairman of the Board, Chief Executive Officer
RIBAPHARM INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Co-Head of Leveraged Finance
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