Exhibit 10.1
ALLERGAN, INC.
$700,000,000 1.50% Convertible Senior Notes Due 2026*
Purchase Agreement
April 6, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
Citigroup Global Markets Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
As Representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Allergan, Inc., a corporation organized under the laws of Delaware
(the "Company"), proposes to issue and sell to the several parties named in
Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives") are acting as representatives, $700,000,000 aggregate
principal amount of its 1.50% Convertible Senior Notes Due 2026 (the "Firm
Securities"). The Company also proposes to grant to the Initial Purchasers an
option to purchase up to $50,000,000 additional principal amount of such Notes
to cover over-allotments (the "Option Securities" and, together with the Firm
Securities, the "Securities"). The Securities are convertible into shares of
Common Stock, par value $0.01 per share (the "Common Stock"), of the Company at
the conversion price set forth herein. The Securities are to be issued under an
indenture (the "Indenture"), to be dated as of the Closing Date, between the
Company and ▇▇▇▇▇ Fargo Bank, National Association, as trustee (the "Trustee").
The Securities will have the benefit of a registration rights agreement (the
"Registration Rights Agreement"), to be dated as of the Closing Date, between
the Company and the Initial Purchasers, pursuant to which the Company will agree
to register the resale of the Securities under the Act subject to the terms and
conditions therein specified. To the extent there are no additional parties
listed on Schedule I other than you, the term Representatives as used herein
shall mean you as the Initial Purchasers, and the terms Representatives and
Initial Purchasers shall mean either the singular or plural as the context
requires. The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
20 hereof.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities or the Common Stock issuable upon
conversion thereof under the Act in reliance upon exemptions from the
registration requirements of the Act.
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* Plus an option to purchase up to $50,000,000 additional principal amount of
Notes from the Company to cover over-allotments.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated April 5, 2006 (including any
and all exhibits thereto and any information incorporated by reference therein,
the "Preliminary Memorandum"), and will prepare and deliver to each Initial
Purchaser on the date hereof or the next succeeding day, copies of a final
offering memorandum, dated April 6, 2006 (as amended or supplemented at the
Execution Time, including any and all exhibits thereto and any information
incorporated by reference therein, the "Final Memorandum"). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Company, the Securities and the Common Stock issuable upon
conversion thereof. The Company hereby confirms that it has authorized the use
of the Disclosure Package, the Preliminary Memorandum and Final Memorandum, and
any amendment or supplement thereto, in connection with the offer and sale of
the Securities by the Initial Purchasers. Unless stated to the contrary, any
references herein to the terms "amend," "amendment" or "supplement" with respect
to the Disclosure Package, the Preliminary Memorandum and the Final Memorandum
shall be deemed to refer to and include any information filed under the Exchange
Act subsequent to the Execution Time that is incorporated by reference therein.
1. Representations and Warranties. The Company represents and warrants
to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Disclosure Package as of the Execution
Time, does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. At the
date thereof, on the Closing Date and on any settlement date for Option
Securities, the Final Memorandum will not (and any amendment or supplement
thereto, at the date thereof, at the Closing Date and on any such settlement
date, will not) contain any 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; provided, however,
that the Company makes no representation or warranty as to the information
contained in or omitted from the Preliminary Memorandum or the Final Memorandum,
or any amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the Initial
Purchasers through the Representatives specifically for inclusion therein, it
being understood and agreed that the only such information furnished by or on
behalf of any Initial Purchaser consists of the information described as such in
Section 8(b) hereof.
(b) None of the Company, its Affiliates, or any person acting on its
or their behalf (other than you, as to whom the Company makes no representation)
has directly or indirectly, made offers or sales of any security, or solicited
offers to buy, any security under circumstances that would require the
registration of the Securities or the Common Stock issuable upon conversion
thereof under the Act.
(c) None of the Company, its Affiliates, or any person acting on its
or their behalf (other than you, as to whom the Company makes no representation)
has engaged in any
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form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in the
United States.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(e) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Disclosure Package and the Final Memorandum will not be, an "investment
company" as defined in the Investment Company Act.
(f) The Company is subject to and in compliance with the reporting
requirements of Section 13 of the Exchange Act.
(g) For the six-month period preceding the Execution Time, and except
in respect of its issuance of shares of Common Stock in connection with the
acquisition of Inamed Corporation, the Company has not paid or agreed to pay to
any person any compensation for soliciting another to purchase any securities of
the Company (except as contemplated in this Agreement).
(h) The Company has not taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(i) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation or limited liability
company, as the case may be, in good standing under the laws of its respective
jurisdiction of incorporation or organization with full corporate power and
authority to own or lease, as the case may be, and to operate its respective
properties and conduct its respective business as described in the Disclosure
Package and Final Memorandum, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction that
requires such qualification, except to the extent that such failure to be so
qualified or be in good standing would reasonably be expected to have a material
adverse effect on the assets, properties, business, results of operations or
financial condition of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business (a
"Material Adverse Effect").
(j) All the issued capital stock or membership interests, as
applicable, of each "significant subsidiary" (as such term is defined in Rule
1-02 of Regulation S-X) of the Company (each, a "Significant Subsidiary") have
been duly authorized and validly issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Disclosure Package and the Final
Memorandum, and, in the case of Allergan Productos Farmaceutico S.A., except for
a minimal number of shares held by persons under the control of the Company for
the purposes of complying with local laws and regulations in such company's
jurisdiction of organization, all outstanding shares of capital stock of each
Significant Subsidiary is owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security interest, claim, lien or
encumbrance.
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(k) The Company's authorized equity capitalization is as set forth in
the Disclosure Package and the Final Memorandum and the capital stock of the
Company conforms in all material respects to the description thereof contained
in the Disclosure Package and the Final Memorandum; the outstanding shares of
Common Stock have been duly authorized and validly issued and are fully paid and
nonassessable; the shares of Common Stock initially issuable upon conversion of
the Securities have been duly authorized and, when issued upon conversion of the
Securities against payment of the conversion price in accordance with the terms
of the Securities and the Indenture, will be validly issued, fully paid and
nonassessable; the Board of Directors of the Company has duly and validly
adopted resolutions reserving such shares of Common Stock for issuance upon
conversion of the Securities; the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights to subscribe for
the Securities or the shares of Common Stock issuable upon conversion thereof;
and, except as set forth in the Disclosure Package and the Final Memorandum, no
options, warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are
outstanding.
(l) The statements in the Preliminary Memorandum and the Final
Memorandum under the headings "Description of Notes" and "Description of Capital
Stock" insofar as such statements purport to summarize certain provisions of the
Securities or the Common Stock, are accurate descriptions or summaries in all
material respects.
(m) The statements in the Preliminary Memorandum and the Final
Memorandum under the heading "Certain United States Federal Income Tax
Consequences" insofar as they purport to summarize certain provisions of the
statutes or regulations referred to therein, are accurate summaries in all
material respects.
(n) This Agreement has been duly authorized, executed and delivered by
the Company; the Indenture has been duly authorized and, assuming due
authorization, execution and delivery thereof by the Trustee, when executed and
delivered by the Company, will constitute a legal, valid and binding instrument,
enforceable against the Company in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, fraudulent conveyance,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity); the
Securities have been duly authorized, and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by
the Initial Purchasers, will have been duly executed and delivered by the
Company and (assuming the due authorization, execution and delivery of the
Indenture by the Trustee) will constitute the legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, fraudulent conveyance,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity) and
will be convertible into Common Stock in accordance with their terms; and the
Registration Rights Agreement has been duly authorized by the Company.
(o) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated
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herein, in the Indenture or in the Registration Rights Agreement, except such as
have already been obtained or as may be required under the Act or state
securities laws, the securities laws of foreign jurisdictions or, with respect
to the Registration Rights Agreement, the by-laws and rules of the NASD and the
qualification of the Indenture under the Trust Indenture Act, except for
consents, approvals, authorizations, registrations or qualifications the lack of
which would not, singly or in the aggregate, have a material adverse effect upon
the consummation of the transactions contemplated herein.
(p) Subject to compliance by the Initial Purchasers with the
representations, warranties and agreements set forth in Section 4 hereof, no
registration under the Act of the Securities or the Common Stock issuable upon
conversion thereof is required for the offer and sale of the Securities to or by
the Initial Purchasers in the manner contemplated herein and in the Disclosure
Package and the Final Memorandum.
(q) Neither the execution and delivery of the Indenture, this
Agreement or the Registration Rights Agreement, the issuance and sale of the
Securities or the issuance of the Common Stock upon conversion thereof, nor the
fulfillment of the terms hereof or thereof will conflict with, result in a
breach or violation of or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to, (i)
the charter or by-laws of the Company or any of its subsidiaries; (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or any of its subsidiaries is a party or bound or to which its
or their property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its subsidiaries
of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties, which violation or default
would, in the case of clauses (ii) and (iii) above, either individually or in
the aggregate with all other violations and defaults referred to in this
paragraph (q) (if any), have (x) a Material Adverse Effect or (y) a material
adverse effect upon the consummation of the transactions contemplated herein.
(r) The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries included or incorporated by
reference in the Disclosure Package and the Final Memorandum present fairly the
financial condition, results of operations and cash flows of the Company as of
the dates and for the periods indicated, comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X and have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein); the pro forma financial statements included or
incorporated by reference in the Disclosure Package and the Final Memorandum
include assumptions that provided a reasonable basis for presenting the
significant effects directly attributable to the transactions and events
described therein at the time such pro forma financial statements were prepared,
the related pro forma adjustments give appropriate effect to those assumptions,
and the pro forma adjustments reflect the proper application of those
adjustments to the historical financial statement amounts in the pro forma
financial statements included or incorporated by reference in the Disclosure
Package and the Final Memorandum; the pro forma financial statements included or
incorporated by reference in the Disclosure Package and the Final Memorandum
comply as to form in all material respects
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with the applicable accounting requirements of Regulation S-X, except that the
Company would be required to provide pro forma financial statements as of
December 31, 2005 prior to the effectiveness of a Registration Statement, and
the pro forma adjustments have been properly applied to the historical amounts
in the compilation of those statements; and except for changes that are
identified or otherwise contemplated in the Disclosure Package and the Final
Memorandum including changes in the Company's or Inamed Corporation's operating
results or financial position since September 30, 2005 reflected in the
historical financial statements included or incorporated by reference in the
Disclosure Package and the Final Memorandum, at such time as the pro forma
financials are updated to reflect the pro forma financial statements as of
December 31 2005, such updated pro forma financial statements will not, when
considered as a whole, present a financial condition of the Company that is
materially less favorable than the pro forma financial statements included or
incorporated by reference in the Disclosure Package and the Final Memorandum.
(s) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries or its or their property is pending or, to the best
knowledge of the Company, threatened that (i) could reasonably be expected to
have a material adverse effect on the Company's performance of its obligations
under this Agreement, the Indenture or the Registration Rights Agreement, or the
consummation of any of the transactions contemplated hereby or thereby or (ii)
could reasonably be expected to have a Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto).
(t) Except as disclosed in the Disclosure Package and the Final
Memorandum, the Company and its subsidiaries have good and marketable title to
all properties and assets owned by each of them, free and clear of all
mortgages, pledges, liens, charges, security interests, claims, encumbrances or
restrictions of any kind, except such as are neither material in amount nor
materially significant in relation to the business of the Company and its
subsidiaries, considered as one enterprise; all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Disclosure Package and the Final Memorandum are in
full force and effect, and neither the Company nor any of its subsidiaries has
any written notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any of its subsidiaries under any
of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any subsidiary thereof to the continued possession of
the leased or subleased premises under any such lease or sublease.
(u) Except as disclosed in the Disclosure Package and the Final
Memorandum and except as would not have a Material Adverse Effect, neither the
Company nor any of its subsidiaries is in violation of its charter, by-laws or
other organizational documents or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it may be bound or to which any of the property or assets of
the Company or any of its subsidiaries may be subject.
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(v) Ernst & Young LLP ("E&Y"), who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules as of December 31, 2005 included or incorporated by reference in the
Disclosure Package and the Final Memorandum, are, to the best knowledge of the
Company, after due inquiry, an independent registered public accounting firm
with respect to the Company.
(w) KPMG LLP ("KPMG"), who have certified (i) certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules as of December 31, 2004 and (ii) certain financial statements of
Inamed Corporation and its consolidated subsidiaries and delivered their report
with respect to the audited consolidated financial statements and schedules as
of December 31, 2005, included or incorporated by reference in the Disclosure
Package and the Final Memorandum, are, to the best knowledge of the Company,
after due inquiry, an independent registered public accounting firm with respect
to the Company.
(x) There are no stamp or other issuance or transfer taxes or duties
or other similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the Company
of the Securities or, if issued on the date hereof, upon the issuance of Common
Stock upon the conversion thereof.
(y) The Company and each of its subsidiaries have filed all applicable
tax returns required to have been filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by them (except
where the requirement for payment of such taxes is being contested in good faith
in appropriate proceedings), except where the failure so to file or pay would
not result in a Material Adverse Effect.
(z) Except for disputes that could not reasonably be expected to have
a Material Adverse Effect, no labor dispute exists with the employees of the
Company or with employees of any of its subsidiaries nor, to the best knowledge
of the Company, is any such labor dispute imminent.
(aa) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any of its subsidiaries has been refused any
material insurance coverage sought or applied for; and neither the Company nor
any of its subsidiaries has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(bb) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated in
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the Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto).
(cc) Except as disclosed in the Disclosure Package and the Final
Memorandum, the Company and its subsidiaries possess such licenses, approvals,
consents and other authorizations (collectively, the "Governmental Licenses")
issued by all applicable regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to possess such
Governmental Licenses would not, singly or in the aggregate, have a Material
Adverse Effect; the Company and its subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a Material
Adverse Effect; and neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(dd) The Company and its subsidiaries maintain a system of effective
internal control over financial reporting as defined in Rule 13a-15(f) under the
Exchange Act 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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ee) Except as disclosed in the Preliminary Offering Memorandum and
the Final Offering Memorandum, since the end of the Company's most recent
audited fiscal year, there has been (i) no material weakness in the Company's
internal control over financial reporting (whether or not remediated) and (ii)
no change in the Company's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
(ff) The Company and its subsidiaries maintain "disclosure controls
and procedures" (as such term is defined in Rule 13a-15(e) under the Exchange
Act); such disclosure controls and procedures are effective.
(gg) Except as disclosed in the Disclosure Package and the Final
Memorandum and except as such matters would not, singularly or in the aggregate,
have a Material Adverse Effect, (i) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to
8
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"); (ii) the Company and
its subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements; and (iii) there are no pending or, to the best knowledge of the
Company, threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries.
(hh) Except as disclosed in the Disclosure Package and the Final
Memorandum, the Company and its subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, the "Intellectual Property") necessary to carry on the business
as now operated, or as proposed in the Disclosure Package and the Final
Memorandum to be operated, by them (the "Company Business"), except where the
failure to own such Intellectual Property would not be expected to have a
Material Adverse Effect. Except as set forth otherwise in the Disclosure Package
and the Final Memorandum: (a) neither the Company nor any of its Significant
Subsidiaries has received any written or oral notice by or on behalf of a
claimant of any infringement or misappropriation of, or conflict with, any
intellectual or proprietary rights of the claimant by the conduct of the Company
Business by the Company and its Significant Subsidiaries, and which
infringement, misappropriation or conflict (if the subject of any unfavorable
decision, ruling or finding), singularly or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect, and the Company is not aware
of any facts which would form a reasonable basis for any such claim; (b) there
is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to any such
material Intellectual Property or the validity or scope of any such material
Intellectual Property, and the Company is not aware of any facts which would
form a reasonable basis for any such claim; and (c) to the Company's knowledge,
there is no material infringement or misappropriation by third parties of any of
the Company's Intellectual Property.
(ii) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such, to
comply in all material respects with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002 and the rules and regulations promulgated in connection therewith (the
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"), including Section 402 relating to loans and Sections 302
and 906 relating to certifications.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale.
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(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
each Initial Purchaser, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 98.25% of the
principal amount thereof, the principal amount of Firm Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Initial Purchasers to purchase, severally and not jointly,
the Option Securities at the same purchase price as the Initial Purchasers paid
for the Firm Securities. The option may be exercised only to cover
over-allotments (i.e. sales by the Initial Purchasers on the date hereof at the
Issue Price listed on Schedule II hereto in excess of the allotted Firm
Securities listed in Schedule II hereof) in the sale of the Firm Securities by
the Initial Purchasers. The option may be exercised in whole or in part at any
time and from time to time on or before the 30th day after the date of the Final
Memorandum upon written or telegraphic notice by the Representatives to the
Company setting forth the principal amount of Option Securities as to which the
several Initial Purchasers are exercising the option and the settlement date.
Delivery of the Option Securities, and payment therefor, shall be made as
provided in Section 3 hereof. The principal amount of Option Securities to be
purchased by each Initial Purchaser shall be the same percentage of the total
principal amount of Option Securities to be purchased by the several Initial
Purchasers as such Initial Purchaser is purchasing of the Firm Securities,
subject to such adjustments as you in your absolute discretion shall make to
eliminate any fractional Securities.
3. Delivery and Payment.
(a) Delivery of and payment for the Firm Securities and the Option
Securities (if the option provided for in Section 2(b) hereof shall have been
exercised on or before the first Business Day immediately preceding the Closing
Date) shall be made at 10:00 A.M., New York City time, on April 12, 2006, which
date and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the respective accounts
of the several Initial Purchasers against payment by the several Initial
Purchasers through the Representatives of the purchase price thereof to or upon
the order of the Company by wire transfer payable in same-day funds to the
account specified by the Company. Delivery of the Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
(b) If the option provided for in Section 2(b) hereof is exercised
after the first Business Day immediately following the Closing Date, the Company
will deliver the Option Securities (at the expense of the Company) to the
Representatives on the date specified by the Representatives (which shall be
within three Business Days after exercise of said option) for the respective
accounts of the several Initial Purchasers, against payment by the several
Initial Purchasers through the Representatives of the purchase price thereof to
or upon the order of the Company by wire transfer payable in same-day funds to
the account specified by the Company. If settlement for the Option Securities
occurs after the Closing Date, the Company will deliver to the Representatives
on the settlement date for the Option Securities, and the obligation of the
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Initial Purchasers to purchase the Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
4. Offering by Initial Purchasers.
(a) Each Initial Purchaser acknowledges that the Securities and the
Common Stock issuable upon conversion thereof have not been and will not be
registered under the Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons, except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Act.
(b) Each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Company that:
(i) it has not offered or sold, and will not offer or sell, any
Securities to, or for the account or benefit of, any person (x) as part of
their distribution at any time or (y) otherwise until one year after the
later of the commencement of the offering and the date of closing of the
offering except to those it reasonably believes to be "qualified
institutional buyers" (as defined in Rule 144A under the Act) and except in
accordance with Rule 144A;
(ii) neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by means
of any form of general solicitation or general advertising (within the
meaning of Regulation D) in the United States;
(iii) in connection with each sale pursuant to Section 4(b)(i),
it has taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale is being made in reliance on Rule
144A;
(iv) any information provided by the Initial Purchasers to
publishers of publicly available databases about the terms of the
Securities shall include a statement that the Securities have not been
registered under the Act and are subject to restrictions under Rule 144A
under the Act;
(v) it acknowledges that additional restrictions on the offer and
sale of the Securities and the Common Stock issuable upon conversion
thereof are described in the Disclosure Package and the Final Memorandum;
(vi) it is an "accredited investor" (as defined in Rule 501(a) of
Regulation D);
(vii) it is a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act);
(viii) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage
11
in investment activity (within the meaning of Section 21 of the FSMA)
received by it in connection with the issue or sale of any Securities, in
circumstances in which Section 21(1) of the Financial Services and Markets
Act 2000 (the "FSMA") does not apply to the Company; and
(ix) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to
the Securities in, from or otherwise involving the United Kingdom.
5. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to counsel
for the Initial Purchasers, without charge, during the period referred to in
Section 5(d) below, as many copies of the materials contained in the Disclosure
Package and the Final Memorandum and any amendments and supplements thereto as
they may reasonably request.
(b) The Company will not amend or supplement the Disclosure Package or
the Final Memorandum, other than by filing documents under the Exchange Act that
are incorporated by reference therein, without the prior written consent of the
Representatives, which consent will not be unreasonably withheld; provided,
however, that, prior to the completion of the distribution of the Securities by
the Initial Purchasers (as determined by the Initial Purchasers), the Company
will not file any document under the Exchange Act that is incorporated by
reference in the Disclosure Package or the Final Memorandum unless, prior to
such proposed filing, the Company has furnished the Representatives with a copy
of such document for their review and the Representatives have not reasonably
objected to the filing of such document. The Company will promptly advise the
Representatives when any document filed under the Exchange Act that is
incorporated by reference in the Disclosure Package or the Final Memorandum
shall have been filed with the Commission.
(c) The Company will prepare a final term sheet, containing solely a
description of final terms of the Securities and the offering thereof, in the
form approved by you and attached as Schedule II hereto.
(d) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the Representatives), any
event occurs as a result of which the Disclosure Package and the Final
Memorandum, as then amended or supplemented, would include any 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
or in light of the circumstances then prevailing, not misleading, or if it
should be necessary to amend or supplement the Disclosure Package and the Final
Memorandum to comply with applicable law, the Company will promptly (i) notify
the Representatives of any such event; (ii) subject to the requirements of
Section 5(b), prepare an amendment or supplement that will correct such
statement or omission or effect such compliance; and (iii) supply any
supplemented or amended Disclosure Package and the Final Memorandum to the
several Initial Purchasers and counsel for the Initial Purchasers, without
charge, in such quantities as they may reasonably request.
12
(e) Without the prior written consent of the Representatives, the
Company has not given and will not give to any prospective purchaser of the
Securities any written information concerning the offering of the Securities
other than materials contained in the Disclosure Package, the Final Memorandum
or any other offering materials prepared by or with the prior written consent of
the Representatives.
(f) The Company will arrange, if necessary, for the qualification of
the Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Representatives may designate and will maintain such
qualifications in effect so long as required for the sale of the Securities;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject. The Company will promptly advise the Representatives
of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(g) The Company will not, and will not permit any of its Affiliates
to, resell any Securities or shares of Common Stock issued upon conversion
thereof that have been acquired by any of them.
(h) None of the Company, its Affiliates, or any person acting on its
or their behalf (other than the Initial Purchasers) will, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of the
Securities or Common Stock issuable upon conversion thereof under the Act.
(i) None of the Company, its Affiliates, or any person acting on its
or their behalf (other than the Initial Purchasers) will engage in any form of
general solicitation or general advertising (within the meaning of Regulation D)
in connection with any offer or sale of the Securities in the United States.
(j) So long as any of the Securities or the Common Stock issuable upon
the conversion thereof are "restricted securities" within the meaning of Rule
144(a)(3) under the Act the Company will, during any period in which it is not
subject to and in compliance with Section 13 or 15(d) of the Exchange Act,
provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information required to be
provided by Rule 144A(d)(4) under the Act. This covenant is intended to be for
the benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities.
(k) Any information provided by the Company to publishers of publicly
available databases about the terms of the Securities shall include a statement
that the Securities have not been registered under the Act and are subject to
restrictions under Rule 144A under the Act.
13
(l) The Company will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(m) The Company will reserve and keep available at all times, for so
long as any Securities are outstanding and convertible, free of pre-emptive
rights, the full number of shares of Common Stock issuable upon conversion of
the Securities.
(n) The Company will not for a period of 90 days following the
Execution Time, without the prior written consent Banc of America Securities and
Citigroup, directly or indirectly, offer, sell or contract to sell, or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any Affiliate of the Company or any person in
privity with the Company or any Affiliate of the Company), or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act in respect of, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for, shares of capital stock of the Company (other
than the Securities), or publicly announce an intention to effect any such
transaction; provided, however, that (i) the Company may issue and sell Common
Stock or securities convertible into or exchangeable for Common Stock pursuant
to any employee stock option plan, stock ownership plan, deferred compensation
plan, stock bonus plan, dividend reinvestment plan or other arrangement
described in the Disclosure Package and the Final Memorandum of the Company and
in effect at the Execution Time, (ii) the Company may issue Common Stock
issuable upon the conversion of securities or the exercise of options or
warrants outstanding at the Execution Time, and (iii) the Company may issue and
sell Common Stock or securities convertible into or exchangable for Common Stock
in connection with acquisition or business combination transactions.
(o) The Company will not take, directly or indirectly, any action
designed to or that has constituted or that might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(p) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation of the Registration Rights Agreement and
the preparation, printing or reproduction of the materials contained in the
Disclosure Package and the Final Memorandum and each amendment or supplement to
either of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the materials contained in the Disclosure Package and the Final
Memorandum, and all amendments or supplements to either of them, as may, in each
case, be reasonably requested for use in connection with the offering and sale
of the Securities; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities; (iv) any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (v) the
printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (vi) any
registration or qualification of the Securities for offer and sale
14
under the securities or blue sky laws of the several states, and any other
jurisdictions specified pursuant to Section 5(f) (including filing fees and the
reasonable fees and expenses of counsel for the Initial Purchasers relating to
such registration and qualification); (vii) the transportation and other
expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (viii) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (ix) all other costs
and expenses incident to the performance by the Company of their obligations
hereunder. Except as provided in this Section 5(p) and Section 7, the Initial
Purchasers shall pay their own expenses, including the fees and disbursements of
their counsel.
(q) Between the date hereof and the Closing Date, the Company will not
do or authorize any act or thing that would result in an adjustment of the
conversion price.
(r) The Company will, for a period of twelve months following the
Execution Time, furnish to the Representatives upon request (i) all reports or
other communications (financial or other) generally made available to
stockholders, and deliver to the Representatives as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any securities exchange on which any class of securities of the
Company is listed and (ii) such additional information concerning the business
and financial condition of the Company as the Representatives may from time to
time reasonably request (such statements to be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to stockholders).
(s) The Company will not take any action or omit to take any action
(such as issuing any press release relating to any Securities without an
appropriate legend) which may result in the loss by any of the Initial Purchases
of the ability to rely on any stabilization safe harbor provided by the
Financial Services Authority under the FSMA.
(t) The Company will comply in all material respects with all
applicable securities and other laws, rules, and regulations, including, without
limitation, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and use its best efforts to cause the
Company's directors and officers, in their capacities as such, to comply in all
material respects with such laws, rules and regulations, including, without
limitation, the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Firm Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties of the Company contained herein at the Execution
Time, the Closing Date and any settlement date pursuant to Section 3 hereof, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Company shall have requested and caused ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Company, to furnish the Representatives its opinion, dated the
Closing Date and substantially in the form attached hereto as Exhibit A.
15
(b) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration Rights
Agreement, the Disclosure Package, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(c) The Company shall have furnished to the Representatives a
certificate of the Company, signed by (i) the President or the Chief Executive
Officer and (ii) the principal financial officer or the principal accounting
officer of the Company, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Disclosure Package and the Final
Memorandum, any amendments or supplements thereto, and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included or incorporated by reference in the Disclosure Package and the
Final Memorandum (exclusive of any amendment or supplement thereto), there
has been no material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Disclosure Package and the Final Memorandum (exclusive
of any amendment or supplement thereto).
(d) At the Execution Time, the Company shall have requested and caused
E&Y to furnish to the Representatives a "comfort" letter, dated as of the
Execution Time and substantially in the form attached hereto as Exhibit B, and
at the Closing Time, the Company shall have requested and caused E&Y to furnish
to the Representatives a "bring-down comfort" letter, dated as of the Closing
Date, reaffirming the statements made in the "comfort" letter, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Date.
(e) At the Execution Time, the Company shall have requested and caused
KPMG to furnish to the Representatives a "comfort" letter, dated as of the
Execution Time and substantially in the form attached hereto as Exhibit C, and
at the Closing Time, the Company shall have requested and caused KPMG to furnish
to the Representatives a "bring-down comfort" letter, dated as of the Closing
Date, reaffirming the statements made in the "comfort" letter, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Date.
16
(f) At the Execution Time, the Company shall have requested and caused
KPMG to furnish to the Representatives a "comfort" letter relating to Inamed
Corporation, dated as of the Execution Time and substantially in the form
attached hereto as Exhibit D, and at the Closing Time, the Company shall have
requested and caused KPMG to furnish to the Representatives a "bring-down
comfort" letter, dated as of the Closing Date, reaffirming the statements made
in the "comfort" letter, except that the specified date referred to shall be a
date not more than three business days prior to the Closing Date.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Disclosure Package (exclusive of any amendment
or supplement thereto) and the Final Memorandum (exclusive of any amendment or
supplement thereto), there shall not have been any change in the condition
(financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Disclosure Package and the Final Memorandum (exclusive of
any amendment or supplement thereto), the effect of which is, in the judgment of
the Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated in the Disclosure Package and the Final Memorandum (exclusive of
any amendment or supplement thereto).
(h) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD and the
Securities shall be eligible for clearance and settlement through The Depository
Trust Company.
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(j) The Company shall have caused the shares of Common Stock initially
issuable upon conversion of the Securities to be approved for listing, subject
to issuance, on the New York Stock Exchange.
(k) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Initial Purchasers, this Agreement and all obligations of the Initial
Purchasers hereunder may be cancelled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
17
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Initial Purchasers, at ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on
the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally through Citigroup Global Markets Inc. on demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser, the directors and officers of each Initial Purchaser and each person
who controls any Initial Purchaser within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other U.S. federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Disclosure Package, the Final Memorandum, any Issuer Written Information or any
other written information used by or on behalf of the Company in connection with
the offer or sale of the Securities, or in any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Preliminary Memorandum or
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Initial Purchaser through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability that the Company may otherwise have.
(b) Each Initial Purchaser severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representatives specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum or in any
amendment or supplement thereto. This indemnity agreement will be in addition to
any liability that any Initial Purchaser
18
may otherwise have. The Company acknowledges that (i) the statements set forth
in the last paragraph of the cover page regarding delivery of the Securities and
(ii), under the heading "Plan of Distribution," the fifth and eighth paragraphs
and the fifth and sixth sentences of the seventh paragraph related to compliance
by the Initial Purchasers with applicable laws, stabilization and syndicate
covering transactions and market-making transactions in the Preliminary
Memorandum and the Final Memorandum constitute the only information furnished in
writing by or on behalf of the Initial Purchasers for inclusion in the
Preliminary Memorandum or the Final Memorandum or in any amendment or supplement
thereto.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel (including
local counsel) of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be satisfactory to the indemnified party. It is
understood, however, that the Company shall, in connection with any one such
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 reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such Initial
Purchasers and controlling persons, which firm shall be designated in writing by
the Representatives. Notwithstanding the indemnifying party's election to
appoint counsel (including local counsel) to represent the indemnified party in
an action, the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party; (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action; or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
19
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers
severally agree, in lieu of or supplemental to, respectively, indemnifying such
indemnified party thereunder, to contribute to the amount paid or payable by
such indemnified party as a result of the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending any loss, claim, damage, liability or action)
(collectively "Losses") to which the Company and one or more of the Initial
Purchasers may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and by the Initial
Purchasers on the other from the offering of the Securities; provided, however,
that in no case shall any Initial Purchaser be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Initial Purchasers severally shall contribute to the aggregate Losses in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the Initial
Purchasers on the other in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses, but after deducting total
discounts and commissions received by the Initial Purchasers) received by it,
and benefits received by the Initial Purchasers shall be deemed to be equal to
the total purchase discounts and commissions. Relative fault shall be determined
by reference to, among other things, whether any untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Initial Purchasers on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Initial Purchasers agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls an Initial Purchaser within the
meaning of either the Act or the Exchange Act and each director and officer of
an Initial Purchaser shall have the same rights to contribution as such Initial
Purchaser, and each person who controls the Company within the meaning of either
the Act or the Exchange Act and each officer and director of the Company shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal
20
amount of Securities set forth opposite the names of all the remaining Initial
Purchasers) the Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10%
of the aggregate principal amount of Securities set forth in Schedule I hereto,
the remaining Initial Purchasers shall have the right to purchase all, but shall
not be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Company. In the event of a default by any Initial Purchaser as
set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the Representatives shall determine
in order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser of its liability, if any, to the
Company or any nondefaulting Initial Purchaser for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination by the
Representatives by notice to the Company prior to delivery of, and payment for,
the Securities, if at any time prior to such delivery and payment (i) trading in
the Company's Common Stock shall have been suspended by the Commission or the
New York Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such exchange; (ii) a banking moratorium shall have been declared
either by U.S. federal or New York State authorities; or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated in the Disclosure Package and the
Final Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the indemnified persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections
5(p), 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to (i) the Citigroup General Counsel (fax no.: (212)
▇▇▇-▇▇▇▇) and confirmed to Citigroup at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: General Counsel, (ii) Banc of America Securities (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to it at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: High Grade Transaction Management/Legal, and
(iii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ Attention: Investment Banking Department, or, if sent to the Company, will
be mailed, delivered or telefaxed to (▇▇▇) ▇▇▇-▇▇▇▇ and confirmed to it at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel.
21
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
indemnified persons referred to in Section 8 hereof, and, except as expressly
set forth in Section 5(j) hereof, no other person will have any right or
obligation hereunder.
14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Initial
Purchasers, or any of them, with respect to the subject matter hereof.
15. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
16. Waiver of Jury Trial. The parties hereto hereby irrevocably waive,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
17. No Fiduciary Duty. The Company hereby acknowledges that (a) the
purchase and sale of the Securities pursuant to this Agreement is an
arm's-length commercial transaction between the Company, on the one hand, and
the Initial Purchasers and any affiliate through which they may be acting, on
the other, (b) the Initial Purchasers are acting as principal and not as an
agent or fiduciary of the Company and (c) the Company's engagement of the
Initial Purchasers in connection with the offering and the process leading up to
the offering is as independent contractors and not in any other capacity.
Furthermore, the Company agrees that it is solely responsible for making its own
judgments in connection with the offering (irrespective of whether any of the
Initial Purchasers has advised or is currently advising the Company on related
or other matters). The Company agrees that it will not claim that the Initial
Purchasers have rendered advisory services of any nature or respect, or owe an
agency, fiduciary or similar duty to the Company, in connection with such
transaction or the process leading thereto.
18. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
19. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
20. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Banc of America Securities" shall mean Banc of America Securities
LLC.
22
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Citigroup" shall mean Citigroup Global Markets Inc.
"Commission" shall mean the Securities and Exchange Commission.
"Disclosure Package" shall mean (i) the Preliminary Memorandum, as
amended or supplemented at the Execution Time, (ii) the final term sheet
prepared pursuant to Section 5(c) hereto and in the form attached as Schedule II
hereto and (iii) any Issuer Written Information.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Issuer Written Information" shall mean any writings in addition to
the Preliminary Memorandum that the parties expressly agree in writing to treat
as part of the Disclosure Package.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"PORTAL" shall mean the Private Offerings, Resales and Trading through
Automated Linkages system of the NASD.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S-X" shall mean Regulation S-X under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.
Very truly yours,
Allergan, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Senior Vice President, Treasury,
---------------------------------
Risks and Investor Relations
---------------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
Banc of America Securities LLC
Citigroup Global Markets Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By: Banc of America Securities LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Title: Managing Director
------------------------------
By: Citigroup Global Markets Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: Director, Investment Banking
------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Title: Managing Director
------------------------------
24
For themselves and the other several
Initial Purchasers named in Schedule
I to the foregoing Agreement.
25
SCHEDULE I
Principal Amount of Firm
Initial Purchasers Securities to be Purchased
------------------ --------------------------
Banc of America Securities LLC .................... $241,500,000
Citigroup Global Markets Inc. ..................... 241,500,000
▇▇▇▇▇▇▇, Sachs & Co. .............................. 105,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ................. 105,000,000
▇▇▇▇▇ Fargo Securities, LLC ....................... 7,000,000
------------
Total .......................................... $700,000,000
============
S-1
SCHEDULE II
ALLERGAN, INC.
1.50% CONVERTIBLE SENIOR NOTES DUE 2026
Issuer: Allergan, Inc.
Title of securities: 1.50% Convertible Senior Notes Due 2026
Issue price: 100%
Aggregate principal amount offered: $700 million (excluding option to purchase up to $50 million of
additional notes to cover over-allotments)
Net Proceeds: Approximately $685.1 million after deducting the initial purchasers'
discount and Allergan's estimated expenses
Allergan Sources and Use of Proceeds
Information:
Sources:
Cash Approximately $675.8 million
Gross proceeds of Ten Year Notes offered
concurrently Approximately $797.7 million
Uses.
Repurchase of outstanding Allergan
common stock Approximately $257.8 million
Transaction costs (Inamed acquisition and
financing transactions) Approximately $93.1 million
Allergan Cash and Cash Equivalents, pro forma
as adjusted: Approximately $727.2 million
Maturity: April 1, 2026
Annual interest rate: 1.50% per annum, accruing from the settlement date
Interest payment dates: Each April 1 and October 1, beginning October 1, 2006
Call dates: At any time on or after April 5, 2009, until April 4, 2011, we may
redeem the notes, in whole or in part, for cash at a price equal to
100% of the principal amount being redeemed plus accrued and
unpaid interest, to but excluding the redemption date, if the Sale Price
of the common stock is equal to or greater than 130% of the
conversion price then in effect for at least 20 trading days in the
period of 30 consecutive trading days ending on the trading day prior
to the date of mailing of the notice of redemption.
Beginning on April 5, 2011 at our option we may redeem all or part
of the notes for cash at a price equal to 100% of the principal amount
being redeemed plus accrued and unpaid interest, to but excluding the
redemption date.
Put dates: Holders may require the issuer to repurchase all or a portion of their
notes on April 1, 2011, 2016 and 2021
Trade date: April 7, 2006
Registration. 144A with Registration Rights
Conversion rate. 7.8952 shares of common stock per $1,000 aggregate principal
amount of notes
Conversion price: $126.66 (approx.) per share of common stock
Settlement: April 12, 2006
Adjustment to conversion rate upon certain The following table sets forth the stock price, effective date and
S-2
Change of Control events on or prior to number of additional shares, subject to adjustment, to be issuable per
April 1, 2011: $1,000 principal amount of notes. The maximum number of additional
shares issuable per $1,000 of notes is 1.57:
STOCK PRICE
EFFECTIVE DATE $105.55 $110.00 $115.00 $120.00 $126.66 $130.00 $140.00 $160.00 $180.00 $200.00 $225.00 $250.00 $275.00 $300.00
-------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
12-APR-06 1.57 1.57 1.41 1.23 1.05 0.99 0.76 0.49 0.32 0.21 0.13 0.09 0.06 0.04
1-APR-07 1 57 1 57 1.41 1.25 1.03 0.95 0.73 0.43 0.26 0.16 0.09 0.06 0.03 0.02
1-APR-08 1.57 1.57 1.41 1.25 1.01 0.91 0.70 0.37 0.19 0.10 0.05 0.02 0.01 0.01
1-APR-09 1.57 1.57 1.49 1.29 1.08 0.94 0.71 0.28 0.00 0.00 0.00 0.00 0.00 0.00
1-APR-10 1.57 1.57 1.57 1.38 1.18 1.07 0.79 0.35 0.00 0.00 0.00 0.00 0.00 0.00
1-APR-11 1.57 1.57 1.54 1.39 1.22 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
This communication is intended for the sole use of the person to whom it is
provided by the sender.
These securities have not been registered under the Securities Act of 1933, as
amended, and may only be sold to qualified institutional buyers pursuant to Rule
144A or pursuant to another applicable exemption.
The information in this term sheet supplements Allergan's preliminary offering
memorandum, dated April 5, 2006 ("the Preliminary Memorandum") and supercedes
the information in the Preliminary Memorandum to the extent inconsistent with
the information in the Preliminary Memorandum. This term sheet is qualified in
its entirety by reference to the Preliminary Memorandum. Terms used herein but
not defined herein shall have the respective meanings as set forth in the
Preliminary Memorandum.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO
THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES
WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA
BLOOMBERG OR ANOTHER EMAIL SYSTEM.
S-3
EXHIBIT A
[Form of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Opinion]
A-1
EXHIBIT B
[Form of E&Y Comfort Letter]
B-1
EXHIBIT C
[Form of KPMG Comfort Letter]
C-1
EXHIBIT D
[Form of KPMG Comfort Letter]
D-1
