Purchase Agreement - ICN Pharmaceuticals Inc. and Schroder & Co. Inc.
ICN PHARMACEUTICALS, INC.
$275,000,000 Aggregate Principal Amount of
9 1/4% Senior Notes due 2005
------------------------------------
PURCHASE AGREEMENT
New York, New York
August 7, 1997
SCHRODER & CO. INC.
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
Ladies and Gentlemen:
ICN Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you (the "Initial Purchaser") $275,000,000 aggregate principal amount of 9
1/4% Senior Notes due 2005 (the "Notes"), to be issued pursuant to the
provisions of an Indenture (the "Indenture") to be entered into between the
Company and United States Trust Company of New York, as trustee (the "Trustee").
The Notes will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom provided by Section 4(2) of the Securities Act and Rule
144A promulgated thereunder.
In connection with the offering and sale of the Notes (the
"Offering"), the Company has prepared a preliminary offering memorandum
(including the documents incorporated by reference therein, the "Preliminary
Offering Memorandum") and will prepare a final offering memorandum (including
the documents incorporated by reference therein, the "Final Offering Memorandum"
and, together with the Preliminary Offering Memorandum, each a "Memorandum")
setting forth or including a description of the terms of the Notes, the terms of
the Offering, a description of the Company and any material developments
relating to the Company occurring after the date of the most recent financial
statements included therein.
You and your direct and indirect transferees will be entitled to the
benefits of a registration rights agreement to be entered into between the
Company and the Initial Purchaser substantially in the form attached hereto as
Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company
will agree to use its best efforts to file and have declared effective a
registration statement (an "Exchange Offer Registration Statement") with the
Securities and Exchange Commission (the "Commission") registering the offer and
sale of the Notes, the Private Exchange Notes or the Exchange Notes (each as
defined in the Registration Rights Agreement) under the Securities Act. This
Agreement, the Notes, the Indenture and the Registration Rights Agreement are
referred to herein as the "Offering Documents."
This is to confirm the agreement concerning the purchase by you of the
Notes from the Company.
<PAGE>
1. The Company represents and warrants to and agrees with you that:
(a) The Preliminary Offering Memorandum, as of its date, did not
contain any untrue statement of a material fact or omit to state a
material fact (except for pricing terms and other financial terms
intentionally left blank) necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and the Final Offering Memorandum, as of its date did not,
and as of the Delivery Date (as defined below) will not, contain any
untrue statement of a material fact or omit to state a material fact
necessary, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
set forth in this Section 1(a) do not apply to statements or omissions
contained in any Memorandum made in reliance upon and in conformity
with information relating to the Initial Purchaser furnished by the
Initial Purchaser to the Company in writing expressly for use in
either Memorandum or any amendment or supplement thereto.
(b) Neither the Company nor any of the Subsidiaries (as defined
below) has sustained, since the date of the most recent financial
statements included in the Final Offering Memorandum, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which loss
or interference is material to the Company and the Subsidiaries, taken
as a whole. Since the respective dates as of which information is
given in the Final Offering Memorandum there has not been any change
in the capital stock or short-term debt (other than in the ordinary
course of business) or long-term debt of the Company or any of the
Subsidiaries, or any change or development which could reasonably be
expected to have a material adverse effect upon the business,
operations, assets, condition (financial or otherwise) or prospects of
the Company and the Subsidiaries, taken as a whole, or an adverse
effect on the ability of the Company to perform its obligations under
the Offering Documents (a "Material Adverse Effect"), otherwise than
as set forth or contemplated in the Final Offering Memorandum.
(c) 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, adverse claims, encumbrances, security interests
(collectively, "Liens") and defects except those that are described or
contemplated by the Final Offering Memorandum or those that do not
materially affect the value of such property and do not materially
interfere with the use made or proposed to be made (as described in
the Final Offering Memorandum) of such property by the Company and the
Subsidiaries. Any real property and buildings held under lease by the
Company and the Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do
not materially interfere with the use made or proposed to be made (as
described in the Final Offering Memorandum) of such real property and
buildings by the Company and the Subsidiaries.
<PAGE>
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with all necessary corporate power and authority to own
its properties and to conduct its business as described in the Final
Offering Memorandum. The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
property, or conducts any business, so as to require such
qualification (except where the failure to so qualify, singly or in
the aggregate with all other such failures, would not have a Material
Adverse Effect) and each such jurisdiction is listed on Schedule II
hereto. Each of the Company's subsidiaries (the "Subsidiaries") is
listed on Schedule I hereto. Except as described in the Final Offering
Memorandum and on Schedule I hereto, each of the Subsidiaries is
wholly owned directly or indirectly by the Company. Each of the
Subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with all necessary corporate power and authority to own
its properties and conduct its business as described in the Final
Offering Memorandum.
(e) The Company had at the date indicated in the Final Offering
Memorandum the capitalization set forth in the column entitled
"Actual" under the caption "Capitalization" as set forth in the Final
Offering Memorandum and, based on the assumptions stated in the Final
Offering Memorandum, the Company would have had on the date indicated
the adjusted capitalization as set forth in the column entitled "Pro
Forma" under the caption "Capitalization" as set forth in the Final
Offering Memorandum. Except as described in the Final Offering
Memorandum, all of the issued and outstanding shares of capital stock
of each Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned by the Company free
and clear of all Liens. There are no outstanding options, warrants or
other rights to acquire, or instruments convertible into or options to
acquire, or instruments convertible into or exchangeable for, any
shares of capital stock of any Subsidiary.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The Indenture has been duly authorized by the Company and,
when executed and delivered by the Company on the Delivery Date
(assuming due authorization, execution and delivery by the Trustee),
will be a legally valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
that (i) the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting creditors'
rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability
(regardless of whether in a proceeding in equity or at law). The
Indenture will conform in all material respects to the description
thereof in the Final Offering Memorandum.
<PAGE>
(h) The Notes have been duly and validly authorized by the
Company, and, when executed and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, will be
legally valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in
accordance with their terms, except that (i) the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
relating to or affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether considered
in a proceeding in equity or at law). The Notes will conform in all
material respects to the description thereof contained in the Final
Offering Memorandum.
(i) The Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by the Company, and, when executed,
authenticated and delivered in accordance with the terms of the
Indenture and the Registration Rights Agreement, will be legally valid
and binding obligations of the Company, entitled to the benefits of
the Indenture and enforceable against the Company in accordance with
their terms, except that (i) the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws relating to or affecting
creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general
applicability (regardless of whether considered in a proceeding in
equity or at law).
(j) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the
Company on the Delivery Date (assuming due authorization, execution
and delivery by, and enforceability against, the Initial Purchaser),
will be a legally valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
that (i) the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting creditors'
rights generally, (ii) the availability of equitable remedies may be
limited by equitable principles of general applicability (regardless
of whether considered in a proceeding in equity or at law) and (iii)
rights to indemnity may be limited by state or federal laws relating
to securities or by policies underlying such laws. The Registration
Rights Agreement will conform in all material respects to the
description thereof contained in the Final Offering Memorandum.
<PAGE>
(k) The execution, delivery and performance by the Company of the
Offering Documents and the consummation of the transactions
contemplated thereby will not (i) conflict with, or result in a breach
or violation of, any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, license,
permit, loan agreement, lease or other material agreement or
instrument to which the Company or any of the Subsidiaries is a party
or by which any of them or any of their respective properties or
assets is bound or is subject, (ii) violate any provision of the
certificate of incorporation or the by-laws or similar organizational
documents of the Company or any of the Subsidiaries or any material
statute or any material order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
any of the Subsidiaries or any of their properties or assets, or (iii)
result in or require the creation or imposition of any Lien, upon or
with respect to any of the properties of the Company or any of the
Subsidiaries, except as permitted by the terms of the Indenture. No
consent, approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is required for
the issue and sale of the Notes, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the offer
and sale of the Notes.
(l) Except as described in the Final Offering Memorandum, there
are no legal or governmental proceedings pending to which the Company
or any of the Subsidiaries is a party or of which any of their
respective properties or assets is the subject which, if determined
adversely, would singly or in the aggregate have a Material Adverse
Effect. To the Company's best knowledge, except as described in the
Final Offering Memorandum, no such proceedings are threatened or
contemplated by any governmental agency or body or any other person.
(m) The Company and the Subsidiaries have all material licenses,
permits and other approvals or authorizations of and from governmental
agencies and bodies ("Permits") as are necessary under applicable law
to own their respective properties and to conduct their respective
businesses in the manner now being conducted as described in the Final
Offering Memorandum. The Company and the Subsidiaries have fulfilled
and performed in all material respects all of their respective
obligations with respect to such material Permits, and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such material Permits.
(n) Coopers & Lybrand L.L.P., who have certified certain
financial statements of the Company, are independent public
accountants under rule 101 of AICPA's Code of Professional Conduct and
its interpretation and rulings.
<PAGE>
(o) The consolidated financial statements of the Company and the
Subsidiaries included or incorporated by reference in the Final
Offering Memorandum present fairly the financial condition, the
results of operations and the cash flows of the Company and the
Subsidiaries as of the dates and for the periods therein specified in
conformity with generally accepted accounting principles consistently
applied throughout the periods involved, except as otherwise stated
therein. The unaudited pro forma financial statements included in the
Final Offering Memorandum have been prepared in accordance with the
rules and guidelines of the Commission with respect to pro forma
financial statements and in the Company's opinion, the assumptions
used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(p) There is no presently existing dispute or controversy between
the Company or any of the Subsidiaries and any of their respective
employees which has had or is likely to have, and the Company has no
reason to believe that the relationship of the Company and the
Subsidiaries with their unions or employees is likely to have, a
Material Adverse Effect.
(q) The Company and the Subsidiaries own or possess adequate
patents, patent rights, inventions, trademarks, service marks, trade
names and copyrights necessary to conduct their business as presently
conducted as described in the Final Offering Memorandum. Neither the
Company nor any of the Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with
respect to any material patent, patent rights, inventions, trademarks,
service marks, trade names or copyrights which could reasonably be
expected to have a Material Adverse Effect.
(r) Neither the Company nor any of the Subsidiaries is in
violation of any provision of their respective certificate of
incorporation or by-laws. The Company and each of the Subsidiaries is
in compliance with all laws, rules, regulations, orders, judgments,
writs and decrees applicable to them other than those which, singly or
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(s) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default in the
due performance and observance of any term, covenant or condition of
any indenture, mortgage, deed of trust, license, permit, loan
agreement, lease or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any
of their respective properties or assets is bound or is subject, which
default, singly or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
<PAGE>
(t) The Company and the Subsidiaries have timely filed all
federal income and other material tax returns and notices. The Company
has no knowledge of any tax deficiencies which would have a Material
Adverse Effect. The Company and its Subsidiaries have paid all
federal, state, local and foreign taxes of any nature which are shown
on its returns to be due, in each case except as may be set forth or
adequately reserved for in the financial statements included in the
Final Offering Memorandum in accordance with GAAP. The amounts
currently set up as provisions for taxes or otherwise by the Company
and the Subsidiaries on their books and records are sufficient for the
payment of all their unpaid federal, foreign, state, county and local
taxes accrued through the dates as of which they relate, and for which
the Company and the Subsidiaries may be liable in their own right, or
as a transferee of the assets of, or as successor to any other
corporation, association, partnership, joint venture or other entity.
(u) Since the date as of which information is given in the
Preliminary Offering Memorandum through the date hereof, and except as
may otherwise be disclosed in the Final Offering Memorandum, neither
the Company nor any of the Subsidiaries has sold or otherwise disposed
of any capital stock of the Company or the Subsidiaries, directly or
indirectly.
(v) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) The Company, immediately before and after the consummation of
the Offering and the other transactions contemplated in the Final
Offering Memorandum, will be Solvent. As used herein, the term
"Solvent" means, with respect to any such entity on a particular date
(i) the fair market value of the assets of such entity is greater than
the total amount of liabilities (including contingent liabilities) of
such entity, (ii) the present fair saleable value of the assets of
such entity is greater than the amount that will be required to pay
the probable liabilities of such entity on its debts as they become
absolute and matured, (iii) such entity is able to realize upon its
assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (iv) such entity does not have an
unreasonably small capital.
<PAGE>
(x) Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act, an "Affiliate")
has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be
integrated with the sale of the Notes in a manner that would require
the registration under the Securities Act of the Notes or (ii) engaged
in any form of general solicitation or general advertising in
connection with the offering of the Notes (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act.
(y) Neither the Company nor any of the Subsidiaries is, or will
be after giving effect to the Offering and the application of the
proceeds therefrom and the other transactions contemplated by the
Offering Documents, an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company
Act").
(z) Assuming the representations and warranties of the Initial
Purchaser are true and correct, it is not necessary in connection with
the offer, sale and delivery of the Notes to the Initial Purchaser in
the manner contemplated by this Agreement to register the Notes under
the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.
(aa) The Company and the Subsidiaries (i) are in compliance with
all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not individually or in the aggregate result in a
Material Adverse Effect.
<PAGE>
(bb) When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of the Company
which are listed on a national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder
(collectively, the "Exchange Act"), or quoted in a U.S. automated
interdealer quotation system.
(cc) The Company and each of the Subsidiaries maintains insurance
covering their properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and
the Subsidiaries and their businesses. All such insurance is
outstanding and in force on the date hereof and will be outstanding
and in force on the Delivery Date.
2. On the basis of the representations and warranties contained in
this Agreement, and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Initial Purchaser, and the Initial
Purchaser agrees to purchase from the Company, $275,000,000 aggregate principal
amount of the Notes at a purchase price of 97% of the principal amount thereof.
3. Certificates in definitive form for the Notes to be purchased by
you hereunder shall be delivered by or on behalf of the Company to you for your
account against payment by you of the purchase price therefor by wire transfer
of immediately available funds to an account specified by the Company by written
notice to the Initial Purchaser (given at least two business days prior to the
Delivery Date), for the purchase price of the Notes being sold by the Company in
New York, New York, at 9:30 A.M., New York City time, on August 14, 1997, or at
such other time, date and place as you and the Company may agree upon in
writing, such time and date being herein called the "Delivery Date."
Certificates for the Notes so to be delivered will be in good delivery
form, and in such denominations and registered in such names as you may request
not less than 48 hours prior to the Delivery Date. Such certificates will be
made available for checking and packaging in New York, New York, at least 24
hours prior to the Delivery Date.
4. The Initial Purchaser proposes to offer the Notes for resale only
to certain investors (as further described in subparagraph (a) of this Paragraph
4) upon the terms and conditions set forth in this Agreement and the Final
Offering Memorandum initially at the purchase price set forth on the cover page
of the Final Offering Memorandum. The Initial Purchaser hereby represents and
warrants to, and agrees with, the Company that:
<PAGE>
(a) It is an institutional "accredited investor" (as defined in
501(a)(1), (2), (3) or (7) under the Securities Act) and will offer or
sell the Notes only (i) inside the United States, to persons who it
reasonably believes are "qualified institutional buyers" within the
meaning of Rule 144A in transactions meeting the requirements of Rule
144A and (ii) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities
Act; and
(b) It has not and will not offer or sell the Notes by any form
of general solicitation or general advertising, including but not
limited to, the methods described in Rule 502(c) under the Securities
Act.
5. In consideration of the agreements of the Initial Purchaser
contained in this Agreement, the Company covenants and agrees as follows:
(a) The Company will furnish to you, without charge, as many
copies of the Final Offering Memorandum and any supplements and
amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Final Offering
Memorandum subsequent to the execution of this Agreement, the Company
will furnish to you a copy of each such proposed amendment or
supplement and will not use any such proposed amendment or supplement
to which you reasonably object.
(c) If, at any time prior to the completion of the distribution
of the Notes to persons that are not your affiliates (as determined by
you), any event occurs as a result of which the Final Offering
Memorandum as then amended or supplemented would include any untrue
statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement
the Final Offering Memorandum to comply with applicable law, the
Company will notify you thereof and will prepare, at the expense of
the Company, an amendment or supplement to the Final Offering
Memorandum that corrects such statement or omission or effects such
compliance.
<PAGE>
(d) The Company will endeavor to qualify the Notes for offer and
sale under the securities or Blue Sky laws of such jurisdictions in
the United States as you shall reasonably request; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
The Company will file such statements and reports as may be required
by the laws of each jurisdiction in which the Notes have been
qualified as above provided. The Company will also supply you with
such information as is necessary for the determination of the legality
of the Notes in such jurisdictions as you may request.
(e) The Company will not, and will not permit any of its
Affiliates to, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the
Securities Act) which could be integrated with the sale of the Notes
in a manner which would require the registration under the Securities
Act of the Notes.
(f) Except following the effectiveness of the Exchange Offer
Registration Statement, the Company will not solicit any offer to buy
or offer to sell the Notes by means of any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act.
(g) While any of the Notes remain outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, the Company will make available, upon request, to any holder or
beneficial owner of outstanding Notes the information specified in
Rule 144A(d)(4) under the Securities Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(h) The Company will use its best efforts to permit the Notes to
be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market and to permit the Notes
to be eligible for clearance and settlement through the Depository
Trust Company.
<PAGE>
(i) For a period of five years following the Delivery Date, the
Company will furnish to the Initial Purchaser copies of any annual
reports, quarterly reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Company to the Trustee or
to the holders of the Notes pursuant to the Indenture.
(j) The Company will not, and will not permit any of its
Affiliates to, resell any Notes that have been acquired by any of
them.
(k) The Company will use the proceeds from the sale of the Notes
in the manner set forth in the Final Offering Memorandum and in a
manner that will not result in the Company becoming an investment
company within the meaning of the Investment Company Act, and the
rules and regulations of the Commission thereunder.
(l) The Company will not, and will cause each of the Subsidiaries
incorporated in or principally conducting its business within the
United States of America not to, offer, sell, contract to sell or
grant any option to purchase or otherwise transfer or dispose of any
debt security, or any security convertible into or in exchange for,
any such debt security of the Company or any such Subsidiary (other
than (x) any private loan, credit or financing agreement with a bank
or similar institution and (y) the Notes, the Exchange Notes and the
Private Exchange Notes), for a period of 180 days after the date of
this Agreement, without your prior written consent.
6. The Company covenants and agrees that the Company will pay or cause
to be paid: (i) the fees, disbursements and expenses of counsel and accountants
for the Company and the Trustee and its counsel, and all other expenses, in
connection with the preparation and printing of each Memorandum and amendments
and supplements thereto and the furnishing of copies thereof, including charges
for mailing, air freight and delivery and counting and packaging thereof to the
Initial Purchaser and dealers; (ii) all expenses in connection with the
qualification of the Notes for offering and sale under state securities laws as
provided in Section 5(d) hereof, including disbursements and expenses for
counsel for the Initial Purchaser in connection with such qualification and in
connection with Blue Sky surveys; (iii) any fees charged by rating agencies for
the rating of the Notes; (iv) the costs and expenses in connection with the
preparation and delivery of the Notes; and (v) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 6, including the fees, if any,
incurred in connection with the admission of the Notes for trading in any
appropriate market systems, the cost of the Company's personnel and other
internal costs, the cost of printing and engraving the certificates representing
the Notes and all expenses and property, excise and similar taxes incident to
the sale and delivery of the Notes to be sold by the Company to the Initial
Purchaser hereunder.
<PAGE>
7. Your obligations hereunder shall be subject, in your discretion, to
the following additional conditions:
(a) The representations and warranties of the Company contained
in this Agreement shall be true and correct as of the date hereof and
as of the Delivery Date. The Company shall have performed in all
material respects all covenants and agreements and satisfied in all
material respects all conditions on its part to be performed or
satisfied hereunder at or prior to the Delivery Date.
(b) The sale of the Notes by the Company hereunder shall not be
enjoined (temporarily or permanently) on the Delivery Date.
(c) Subsequent to the date as of which information is given in
the Final Offering Memorandum, except in each case as described in or
as contemplated by the Final Offering Memorandum, the Company and the
Subsidiaries shall not have incurred any liabilities or obligations,
direct or contingent that are material to the Company and the
Subsidiaries taken as a whole or entered into any transactions that
are material to the business, condition (financial or other), results
of operations or prospects of the Company and the Subsidiaries taken
as a whole.
(d) Subsequent to the date of this Agreement and prior to the
Delivery Date, there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any of the Company's securities, including the Notes, by any
"nationally recognized statistical rating organization" as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act.
(e) You shall have received on the Delivery Date a certificate of
the Company dated the Delivery Date and signed by its Chief Executive
Officer, President or any Vice President and by the Chief Financial
Officer, to the effect set forth in clauses (a), (b), (c) and (d)
above.
(f) (i) Proskauer Rose LLP, special counsel to the Company, shall
have furnished to you their written opinion, dated the Delivery Date,
in substantially the form attached hereto as Exhibit B, and (ii) David
C. Watt, Esq., General Counsel of the Company, shall have furnished to
you his written opinion, dated the Delivery Date, in substantially the
form attached hereto as Exhibit C.
(g) Cahill Gordon & Reindel, counsel to the Initial Purchaser,
shall have furnished to the Initial Purchaser a written opinion, dated
the Delivery Date, in form and substance satisfactory to you, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon the matters covered by
such opinion.
<PAGE>
(h) You shall have received on each of the date hereof and the
Delivery Date a letter, dated the date hereof or the Delivery Date, as
the case may be, in form and substance reasonably satisfactory to you,
from Coopers & Lybrand L.L.P., the Company's independent public
accountants.
(i) (i) Since the date of this Agreement, neither the Company nor
any of the Subsidiaries shall have sustained any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree which could reasonably
be expected to have a Material Adverse Effect; and (ii) since the
respective dates as of which information is given in the Final
Offering Memorandum, there shall not have been any change in the
capital stock or short-term debt (other than in the ordinary course of
business) or long-term debt of the Company or any of the Subsidiaries
nor any change which could reasonably be expected to have a Material
Adverse Effect otherwise than as set forth or contemplated in the
Final Offering Memorandum, the effect of which, in any such case
described in clause (i) or (ii), is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the
Offering or the delivery of the Notes on the terms and in the manner
contemplated in the Final Offering Memorandum.
(j) Subsequent to the execution and delivery of this Agreement,
(i) there shall have been no declaration of war by the Government of
the United States, (ii) there shall not have occurred any material
adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United
States or any outbreak or material escalation of hostilities or other
calamity or crisis, the effect of which is such as to make it, in the
judgment of the Initial Purchaser, impracticable to market the Notes
or to enforce contracts for the resale of Notes and (iii) no event
shall have occurred resulting in (A) trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market being suspended or limited or minimum or
maximum prices being generally established on such exchange or market,
or (B) additional material governmental restrictions, not in force on
the date of this Agreement, being imposed upon trading in securities
generally by such exchange or by order of the Commission or any court
or other governmental authority or (C) a general banking moratorium
being declared by either Federal or New York authorities.
(k) The Company shall have furnished or caused to be furnished to
you at the Delivery Date any additional certificates signed by
officers of the Company, satisfactory to you as to such matters as you
may reasonably request.
<PAGE>
(l) The Company and the Initial Purchaser shall have entered into
the Registration Rights Agreement.
8. (a) The Company agrees to indemnify and hold harmless the Initial
Purchaser against any losses, claims, damages or liabilities ("Losses"), to
which the Initial Purchaser may become subject, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such Losses (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 any Memorandum, or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and will reimburse the Initial
Purchaser for any legal or other expenses reasonably incurred by the Initial
Purchaser in connection with investigating, preparing to defend, defending or
appearing as a third-party witness in connection with any such action or claim;
provided, however, that the Company shall not be liable to the Initial Purchaser
in any such case to the extent that any such Loss arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
relating to the Initial Purchaser made in any Memorandum, or such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Initial Purchaser expressly for use
therein; provided, however, that the foregoing indemnity with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of the Initial
Purchaser if the person asserting such losses, claims, damages or liabilities
purchased Notes if (x) it is established in the related proceeding that such
Initial Purchaser failed to send or give a copy of the Final Offering Memorandum
to such person with or prior to the written confirmation of such sale (provided
that the Company has complied with its obligations uner Section 5(a) hereof) and
(y) the untrue statement or omission or alleged untrue statement or omission was
completely corrected in the Final Offering Memorandum and the Final Offering
Memorandum does not contain any other untrue statement or omission or alleged
untrue statement or omission that was the subject matter of the related
proceeding.
(b) In addition to any obligations of the Company under Section 8(a),
the Company agrees that it shall perform its indemnification obligations under
Section 8(a) (as modified by the last paragraph of this Section 8(b)), with
respect to counsel fees and expenses and other expenses reasonably incurred by
making payments within 60 days to the Initial Purchaser in the amount of the
statements of the Initial Purchaser's counsel or other statements which shall be
forwarded by the Initial Purchaser, and that it shall make such payments
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligation to reimburse the Initial Purchaser for such
expenses and the possibility that such payments might later be held to have been
improper by a court and a court orders return of such payments.
<PAGE>
The indemnity agreement in Section 8(a) shall be in addition to any
liability which the Company may otherwise have and shall extend upon the same
terms and conditions to each person, if any, who controls the Initial Purchaser
within the meaning of the Securities Act or the Exchange Act, and to the
officers, directors, partners, employees, representatives and agents of the
Initial Purchaser or any such control person.
(c) The Initial Purchaser will indemnify and hold harmless the Company
against any Losses to which the Company may become subject, under the Securities
Act, the Exchange Act, any federal or state statutory law or regulation, at
common law or otherwise, insofar as such Losses (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Memorandum, or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Memorandum or such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Initial Purchaser relating to the Initial
Purchaser expressly for use therein, and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating, preparing to defend, defending or appearing as a third-party
witness in connection with any such action or claim.
The indemnity agreement in this Section 8(c) shall be in addition to
any liability which the Initial Purchaser may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, and to the
officers, directors, partners, employees, representatives and agents of the
Company or any such control person.
(d) Promptly after receipt by an indemnified party under Section 8(a)
or 8(c) of notice of the commencement of any action (including any governmental
investigation), such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party under Section 8(a) or 8(c) except to the
extent it was unaware of such action and has been prejudiced in any material
respect by such failure or from any liability which it may have to any
indemnified party otherwise than under such Section 8(a) or 8(c). In case any
<PAGE>
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. If, however, (i)
the indemnifying party has not authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party or (ii) an
indemnified party shall have reasonably concluded that representation of such
indemnified party and the indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct due to actual
or potential differing interests between them and the indemnified party so
notifies the indemnifying party, then the indemnified party shall be entitled to
employ counsel different from counsel for the indemnifying party at the expense
of the indemnifying party and the indemnifying party shall not have the right to
assume the defense of such indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses or more than one counsel (in addition to
local counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same set of allegations or circumstances. The counsel with respect to which
fees and expenses shall be so reimbursed shall be designated in writing by the
Initial Purchaser in the case of parties indemnified pursuant to Section 8(a)
and by the Company in the case of parties indemnified pursuant to Section 8(c).
The Company shall not be liable for any settlement of any such action
or proceeding effected without its prior written consent (not to be unreasonably
withheld) and if settled with its written consent or if there is a final
judgment for the plaintiff, the Company agrees to indemnify and hold harmless
the Initial Purchaser and each other person referred to in Section 8(b) to the
extent provided herein. Without limiting the generality of the foregoing, no
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any such indemnified party is or has been threatened to be made a party
and to which the indemnity herein is applicable; provided, however, that an
indemnifying party may effect such a settlement without the consent of the
indemnified party if such settlement includes an unconditional release of such
indemnified party from all liability for claims that are the subject matter of
such proceeding or the indemnifying party indemnifies the indemnified party in
writing and posts a bond for an amount equal to the maximum liability for all
such claims as contemplated above.
(e) In the event that the indemnity provided by Section 8(a) or 8(c)
is unavailable or insufficient to hold harmless an indemnified party for any
reason, the Company and the Initial Purchaser shall contribute to the aggregate
Losses to which they may be subject as an indemnifying party hereunder (after
contribution from others) in such proportion so that the Initial Purchaser is
responsible for the portion represented by the percentage that the total
discounts and commissions paid to the Initial Purchaser appearing on the cover
page of the Final Offering Memorandum bears to the total proceeds to the Company
(net of discounts and commissions of the Initial Purchaser) appearing thereon
and the Company is responsible for the remaining portion; provided, however,
that, in any such case, (x) the Initial Purchaser shall not be required to
contribute any amount in excess of the Initial Purchaser's discount and
commission applicable to the Notes and (y) no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to a contribution from any person who was not guilty of such
fraudulent misrepresentation. The amount paid or payable by the Initial
Purchaser as result of this Section 8(e) shall be deemed to include any legal or
other expenses reasonably incurred by the Initial Purchaser in connection with
investigating, preparing to defend or defending any such claim.
<PAGE>
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Initial Purchaser, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Initial Purchaser or any controlling person of the Initial Purchaser, the
Company or an officer or director or controlling person of the Company and shall
survive delivery of and payment for the Notes.
10. The obligations of the Initial Purchaser hereunder may be
terminated by the Initial Purchaser by notice given to and received by the
Company prior to delivery of and payment for the Notes, if, prior to that time,
any of the events described in Section 7(d), 7(i), or 7(j) shall have occurred
or if the Initial Purchaser shall decline to purchase the Notes for any other
reason permitted under this Agreement.
11. If (a) the Company shall fail to tender the Notes for delivery to
the Initial Purchaser (other than by reason of a default by the Initial
Purchaser) or (b) the Initial Purchaser shall decline to purchase the Notes for
any reason permitted under this Agreement (except the termination of this
Agreement pursuant to Section 10 due solely to the occurrence of an event
enumerated in Section 7(j)), the Company shall reimburse the Initial Purchaser
for the reasonable fees and expenses of their counsel and for such other
reasonable out-of-pocket expenses as shall have been incurred by it in
connection with this Agreement and the proposed purchase of the Notes, and upon
demand the Company shall pay the full amount thereof to the Initial Purchaser.
12. All statements, requests, notices and agreements hereunder shall
be in writing or by written telecommunication, and shall be sufficient in all
respects if delivered or sent by registered mail, if to the Initial Purchaser,
to Schroder & Co. Inc. at 787 Seventh Avenue, New York, New York 10019,
Attention: High Yield Department; and if to the Company to 3300 Hyland Avenue,
Costa Mesa, California 92626, Attention: Chief Executive Officer.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, you, the Company and, to the extent provided in Section 8 hereof,
controlling persons, officers, directors, partners, employees, representatives
and agents referred to in Section 8, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Notes from the Initial Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York (without giving effect to principles of
conflicts of law).
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to us a counterpart hereof, and upon the acceptance
hereof by you, this letter and such acceptance hereof shall constitute a binding
agreement between you and the Company.
Very truly yours,
ICN PHARMACEUTICALS, INC.
By: /s/ David C. Watt
------------------------------
Name: David C. Watt
Title: Executive Vice President, General Counsel
and Corporate Secretary
Accepted as of the date hereof:
SCHRODER & CO. INC.
By: /s/ R. Douglas Carleton
----------------------------------
Name: R. Douglas Carleton
Title: Managing Director
<PAGE>
SCHEDULE I
SUBSIDIARIES
Jurisdiction Percentage
Name of Incorporation Ownership
---- ---------------- ---------
ICN Canada, Limited Canada 100%
Alpha Pharmaceutical, Inc. Panama 100%
ICN Farmaceutica, S.A. Mexico 100%
Laboratorios Grossman, S.A. Mexico 100%
ICN Pharmaceuticals, Holland, B.V. Netherlands 100%
ICN Biomedicals, Inc. Delaware 100%
ICN Yugoslavia Yugoslavia 75%
ICN Biomedicals GmbH-Eschwege Germany 100%
ICN Pharmaceuticals Australasia Pty Ltd. Australia 100%
ICN Pharmaceuticals Japan K.K. Japan 100%
ICN Biomedicals B.V. Netherlands 100%
ICN Biomedicals California, Inc. California, U.S.A. 100%
ICN Iberica Spain 100%
Labsystems Benelux B.V. Netherlands 100%
Labsystems Benelux N.V. Belgium 100%
ICN Biomedicals, Ltd. Scotland 100%
ICN Biomedicals, GmbH Germany 100%
ICN France SARL France 100%
ICN Biomedicals S.R.L. Italy 95%
ICN Biomedicals N.V./S.A. Belgium 100%
ICN Oktyabr Russia 90%
ICN Polypharm Russia 89%
ICN Leksredstva Russia 95%
ICN Alkaloida Hungary 60%
Wuxi ICN Pharmaceuticals China 75%
<PAGE>
SCHEDULE II
ICN Pharmaceuticals, Inc.
Delaware (jurisdiction of incorporation)
California
Indiana
Iowa
Massachusetts
Minnesota
Missouri
Nevada
New York
North Carolina
Ohio
Oregon
Pennsylvania
West Virginia
ICN Biomedicals, Inc.
Delaware (jurisdiction of incorporation)
Alabama
<PAGE>
Exhibit B to
Purchase Agreement
Opinion of Proskauer Rose LLP1
1. Assuming that the Indenture has been duly and validly authorized,
executed and delivered by each of the Company and the Trustee, the Indenture is
a legally valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except that (i) the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether in a proceeding in equity or at
law).
2. Assuming that the Notes have been duly and validly authorized and
executed by the Company and assuming due authentication of the Notes by the
Trustee, when the Notes are delivered to and paid for by the Initial Purchaser
in accordance with the terms of the Purchase Agreement, the Notes will be
legally valid and binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms, except that (i) the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general applicability
(regardless of whether considered in a proceeding in equity or at law).
3. Assuming that the Exchange Notes and the Private Exchange Notes
have been duly and validly authorized by the Company, when the Exchange Notes
and the Private Exchange Notes, if applicable, are executed, authenticated and
delivered in accordance with the terms of the Indenture and the Registration
Rights Agreement, the Exchange Notes and the Private Exchange Notes, if
applicable, will be legally valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the Company in
accordance with their terms, except that (i) the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether considered in a proceeding in
equity or at law).
<PAGE>
4. Assuming that the Registration Rights Agreement has been duly and
validly authorized, executed and delivered by the parties thereto, the
Registration Rights Agreement is a legally valid and binding agreement of the
Company, enforceable against it in accordance with its terms, except that (i)
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether considered
in a proceeding in equity or at law) and (iii) rights to indemnity may be
limited by state or federal laws relating to securities or by policies
underlying such laws.
5. The Notes and the Registration Rights Agreement conform in all
material respects to the descriptions thereof in the Final Offering Memorandum
under the captions "Description of the Notes" and "Registration Rights,"
respectively.
6. No consent, approval, authorization, order, registration or
qualification of or with any Federal or New York court or Federal or New York
governmental agency or body is required for the issue and sale of the Notes,
except such consents, approvals, authorizations, registrations or qualifications
as may be required under New York state securities or Blue Sky laws in
connection with the offer and sale of the Notes.
7. Assuming that the proceeds of the Offering will be applied as
described in the Final Offering Memorandum under the caption "Use of Proceeds,"
consummation of the Offering will not violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
8. Neither the Company nor any of the Subsidiaries is, or will be
after the Offering, an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
9. Assuming the representations and warranties of the Initial
Purchaser and the Company contained in the Purchase Agreement are true and
correct, and assuming compliance by the Initial Purchaser and the Company with
their covenants contained in the Purchase Agreement, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Initial
Purchaser in the manner contemplated by the Purchase Agreement to register the
Notes under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended, it being understood that no opinion is
expressed as to any subsequent resale of any Notes.
<PAGE>
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the Initial Purchaser and representatives of the independent
public accountants of the Company at which the contents of the Memorandum and
related matters were discussed. Such counsel may further state that, although
such counsel made certain inquiries and investigations in connection with the
preparation of the Memorandum such counsel did not independently verify the
accuracy or completeness of the statements made in the Memorandum and, as such,
cannot and does not assume responsibility for or pass on the accuracy or
completeness of such statements. Subject to the foregoing, such counsel shall
state that such counsel's work in connection with the Memorandum and the offer
and sale of Notes pursuant to the Purchase Agreement did not disclose any
information that would cause such counsel to believe that the Final Offering
Memorandum, as of its date or as of the Delivery Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need not make any comment with respect to the financial statements and
the notes thereto and the other financial and statistical information or data
included in the Final Offering Memorandum).
<PAGE>
Exhibit C to
Purchase Agreement
Opinion of David C. Watt, Esq.1
1. The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware, with all necessary corporate power and
authority to own its properties and to conduct its business as described in the
Memorandum. Based solely upon the certificates of public officials the Company
has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each jurisdiction listed in Schedule
II to the Purchase Agreement.
2. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued, are fully paid and
nonassessable and to such counsel's knowledge are owned by the Company free and
clear of all Liens.
3. The Company has the corporate power and authority to enter into,
and perform its obligations under, the Offering Documents.
4. The Purchase Agreement has been duly and validly authorized,
executed and delivered by the Company.
5. The Indenture has been duly and validly authorized, executed and
delivered by the Company.
6. The Notes have been duly and validly authorized and executed by the
Company.
7. The Exchange Notes and the Private Exchange Notes have been duly
and validly authorized by the Company.
8. The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Company.
<PAGE>
9. The execution, delivery and performance by the Company of the
Offering Documents and the consummation of the transactions contemplated thereby
will not (i) violate any provision of the certificate of incorporation or the
by-laws of the Company or any of the Subsidiaries, (ii) conflict with, or result
in a breach or violation of, any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, license, permit, loan
agreement, lease or other agreement or instrument known to such counsel to which
the Company or any of the Subsidiaries is a party or by which any of them or any
of their respective properties or assets is bound or is subject, except to the
extent any such conflict, breach, violation or default, singly or in the
aggregate with all other such conflicts, breaches, violations and defaults,
would not have a Material Adverse Effect, (iii) violate any order known to such
counsel or any statute, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of the Subsidiaries or any
of their properties or assets or (iv) result in or require the creation or
imposition of any Lien, pursuant to any agreement or instrument known to such
counsel or pursuant to any statute, rule or regulation, upon or with respect to
any of the properties of the Company or any of the Subsidiaries, except pursuant
to the terms of the Indenture.
10. Other than as set forth in the Memorandum there are no pending
legal or governmental proceedings known to such counsel to which the Company or
any of the Subsidiaries is a party or of which any of their respective
properties or assets is the subject which, if determined adversely, would singly
or in the aggregate have a Material Adverse Effect. To such counsel's knowledge,
other than as set forth in the Memorandum no such proceedings are threatened or
contemplated by any governmental agency or body or any other person.
11. To such counsel's knowledge, neither the Company nor any of the
Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any material patent, patent rights,
inventions, trademarks, service marks, trade names or copyrights.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the Initial Purchaser and representatives of the independent
public accountants of the Company at which the contents of the Memorandum and
related matters were discussed. Such counsel may further state that, although
such counsel made certain inquiries and investigations in connection with the
preparation of the Memorandum, such counsel did not independently verify the
accuracy or completeness of the statements made in the Memorandum and, as such,
cannot and does not assume responsibility for or pass on the accuracy or
completeness of such statements. Subject to the foregoing, such counsel shall
state that such counsel's work in connection with the Memorandum and the offer
and sale of Notes pursuant to the Purchase Agreement did not disclose any
information that would cause such counsel to believe that the Final Offering
Memorandum, as of its date or as of the Delivery Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need not make any comment with respect to the financial statements and
the notes thereto and the other financial and statistical information or data
included in the Final Offering Memorandum).
1/ Capitalized terms not defined herein have the meanings given to them
in the Purchase Agreement.