Exhibit 10.26
VALEANT PHARMACEUTICALS INTERNATIONAL
$200,000,000 3.0% CONVERTIBLE SUBORDINATED NOTES DUE 2010
$200,000,000 4.0% CONVERTIBLE SUBORDINATED NOTES DUE 2013
REGISTRATION RIGHTS AGREEMENT
November 19, 2003
Banc of America Securities LLC,
Xxxxxxx, Xxxxx & Co.
As representatives of the several Purchasers
named in Schedule I to the Purchase Agreement
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Valeant Pharmaceuticals International, a Delaware corporation (the
"Company"), proposes to issue and sell to the Purchasers (as defined herein)
upon the terms set forth in the Purchase Agreement (as defined herein)
$200,000,000 principal amount of its 3.0% Convertible Subordinated Notes due
2010 (the "3.0% Notes due 2010") and $200,000,000 principal amount of its 4.0%
Convertible Subordinated Notes due 2013 (the "4.0% Notes due 2013" and, together
with the 3.0% Notes due 2010, the "Firm Securities"). In addition, the Company
has granted to the Purchasers an option, exercisable from time to time by the
Purchasers, to purchase an aggregate of up to an additional $40,000,000
principal amount of its 3.0% Notes due 2010 and an aggregate of up to an
additional $40,000,000 principal amount of its 4.0% Notes due 2013 (the
"Optional Securities" and, together with the Firm Securities, the "Securities").
The Securities are convertible into Common Stock, par value $.01 per share, of
the Company. The Securities will be issued under an Indenture (as defined
herein).
Ribapharm Inc. ("Ribapharm"), a wholly owned subsidiary of the Company, is
an obligor with respect to the Securities and shall be subject to the provisions
of this Agreement, jointly and severally with the Company, but only for so long
as Ribapharm shall have outstanding obligations under the 6-1/2% Convertible
Subordinated Notes due 2008, originally issued under an Indenture, dated as of
July 18, 2001, among Valeant Pharmaceuticals International, Ribapharm and The
Bank of New York, as Trustee.
As an inducement to the Purchasers to enter into the Purchase Agreement
and in satisfaction of a condition to the obligations of the Purchasers
thereunder, the Company and Ribapharm, jointly and severally, agree with the
Purchasers for the benefit of Holders (as defined herein) from time to time of
the Registrable Securities (as defined herein) as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Purchase Agreement. As used in this Agreement,
the following defined terms shall have the following meanings:
"Affiliate" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with such specified person. For purposes of this definition, control of a person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such person whether by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Closing Date" means the First Time of Delivery as defined in the Purchase
Agreement.
"Commission" means the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
"Common Stock" means the Company's common stock, par value $.01 per share,
including associated preferred stock purchase rights.
"DTC" means The Depository Trust Company.
"Effective Date" has the meaning assigned thereto in Section 2(b)(i)
hereof.
"Effective Failure" has the meaning assigned thereto in Section 7(b)
hereof.
"Effectiveness Period" has the meaning assigned thereto in Section 2(b)(i)
hereof.
"Effective Time" means the time at which the Commission declares the Shelf
Registration Statement effective or at which the Shelf Registration Statement
otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Holder" means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" means the Indenture, dated as of November 19, 2003, among the
Company, Ribapharm and The Bank of New York, as amended and supplemented from
time to time in accordance with its terms.
"Liquidated Damages" has the meaning assigned thereto in Section 7(a)
hereof.
"Managing Underwriters" means the investment banker or investment bankers
and manager or managers that shall administer an underwritten offering, if any,
conducted pursuant to Section 6 hereof.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
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"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Appendix A
hereto.
The term "person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company and Ribapharm under the Exchange Act and
incorporated by reference therein.
"Purchase Agreement" means the purchase agreement, dated as of November
13, 2003, among the Purchasers, the Company and Ribapharm relating to the
Securities.
"Purchasers" means the Purchasers named in Schedule I to the Purchase
Agreement.
"Registrable Securities" means all or any portion of the Securities issued
from time to time under the Indenture in registered form and the shares of
Common Stock issuable upon conversion, repurchase or redemption of such
Securities; provided, however, that a security ceases to be a Registrable
Security when it is no longer a Restricted Security.
"Registration Default" has the meaning assigned thereto in Section 7(a)
hereof.
"Restricted Security" means any Security or share of Common Stock issuable
upon conversion thereof except any such Security or share of Common Stock that
(i) has been effectively registered under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
such Rule 144 (or any successor provision thereto) or (iii) has otherwise been
transferred and a new Security or share of Common Stock not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company in accordance with Section 2.6 of the Indenture.
"Rules and Regulations" means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Shelf Registration" means a registration effected pursuant to Section 2
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company and Ribapharm
pursuant to the provisions of Section 2 of this Agreement, including the
Prospectus contained therein, any amendments and supplements to such
registration statement, including
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post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.
The term "underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to a percentage of
the "principal amount" of Registrable Securities or to a percentage of
Registrable Securities, Common Stock shall be treated as representing the
principal amount of Securities that was surrendered for conversion or exchange
in order to receive such number of shares of Common Stock.
2. Shelf Registration.
(a) The Company and Ribapharm shall, no later than 90 calendar days
following the Closing Date, file with the Commission a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities by the
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement and,
thereafter, shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act no
later than 270 calendar days following the Closing Date; provided, however, that
the Company and Ribapharm may, upon written notice to all Holders, postpone
having the Shelf Registration Statement declared effective for a reasonable
period not to exceed 30 days if the Company possesses material non-public
information, the disclosure of which would have a material adverse effect on the
Company, Ribapharm and its subsidiaries taken as a whole; provided, further,
however, that no Holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the Prospectus
forming a part thereof for resales of Registrable Securities unless such Holder
is an Electing Holder.
(b) The Company and Ribapharm, jointly and severally, shall use their
reasonable best efforts:
(i) to keep the Shelf Registration Statement continuously
effective under the Securities Act in order to permit the Prospectus
forming a part thereof to be usable by Holders until the earliest of (1)
the sale of all Registrable Securities registered under the Shelf
Registration Statement; (2) the expiration of the period referred to in
Rule 144(k) of the Securities with respect to all Registrable Securities
held by Persons that are not Affiliates of the Company; and (3) two years
from the date (the "Effective Date") such Shelf Registration Statement is
declared effective (such period being referred to herein as the
"Effectiveness Period");
(ii) after the Effective Time of the Shelf Registration Statement,
promptly upon the request of any Holder of Registrable Securities that is
not then an Electing Holder, to take any action reasonably necessary to
enable such Holder to use the Prospectus forming a part thereof for
resales of Registrable Securities, including, without limitation, any
action necessary to identify such Holder as a selling securityholder in
the Shelf Registration Statement; provided, however, that nothing in this
subparagraph shall
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relieve such Holder of the obligation to return a completed and signed
Notice and Questionnaire to the Company in accordance with Section
3(a)(ii) hereof; and
(iii) if at any time the Securities, pursuant to Article IV of the
Indenture, are convertible into securities other than Common Stock, to
cause, or to cause any successor under the Indenture to cause, such
securities to be included in the Shelf Registration Statement no later
than the date on which the Securities may then be convertible into such
securities.
The Company and Ribapharm shall be deemed not to have used their reasonable best
efforts to keep the Shelf Registration Statement effective during the requisite
period if the Company and Ribapharm voluntarily take any action that would
result in Holders of Registrable Securities covered thereby not being able to
offer and sell any of such Registrable Securities during that period, unless
such action is (A) required by applicable law and the Company and Ribapharm
thereafter promptly comply with the requirements of paragraph 3(j) below or (B)
permitted pursuant to Section 2(c) below.
(c) The Company and Ribapharm may suspend the use of the Prospectus for
a period not to exceed 30 days in any 90-day period or an aggregate of 90 days
in any 12-month period without being required to pay Liquidated Damages if the
Board of Directors of the Company shall have determined in good faith that
because of valid business reasons (not including avoidance of the Company's and
Ribapharm's obligations hereunder), including the acquisition or divestiture of
assets, pending corporate developments and similar events, it is in the best
interests of the Company and Ribapharm to suspend such use, and prior to
suspending such use the Company and Ribapharm provide the Holders with written
notice of such suspension, which notice need not specify the nature of the event
giving rise to such suspension.
3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) (i) Not less than 30 calendar days prior to the Effective Time of
the Shelf Registration Statement, the Company and Ribapharm shall mail the
Notice and Questionnaire to the Holders of Registrable Securities. No Holder
shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement as of the Effective Time, and no Holder shall be entitled
to use the Prospectus forming a part thereof for resales of Registrable
Securities at any time, unless such Xxxxxx has returned a completed and signed
Notice and Questionnaire to the Company and Ribapharm by the deadline for
response set forth therein; provided, however, Holders of Registrable Securities
shall have at least 28 calendar days from the date on which the Notice and
Questionnaire is first mailed to such Holders to return a completed and signed
Notice and Questionnaire to the Company and Ribapharm.
(ii) After the Effective Time of the Shelf Registration Statement,
the Company and Ribapharm shall, upon the request of any Holder of
Registrable Securities that is not then an Electing Holder, promptly send
a Notice and Questionnaire to such Holder. The Company and Ribapharm shall
not be required to take any action to name such Holder as a selling
securityholder in the Shelf Registration Statement or to enable such
Holder to use the Prospectus forming a part thereof for resales of
Registrable Securities until such Xxxxxx has returned a completed and
signed Notice and Questionnaire to the Company and Ribapharm.
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(iii) The term "Electing Holder" shall mean any Holder of
Registrable Securities that has returned a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(i) or
3(a)(ii) hereof.
(b) The Company and Ribapharm shall furnish to each Electing Holder,
prior to the Effective Time, upon their request, a copy of the Shelf
Registration Statement initially filed with the Commission, and shall furnish to
such Holders, prior to the filing thereof with the Commission, upon their
request, copies of each amendment thereto and each amendment or supplement, if
any, to the Prospectus included therein, and shall use their reasonable best
efforts to reflect in each such document, at the Effective Time or when so filed
with the Commission, as the case may be, such comments as such Holders and their
respective counsel reasonably may propose not later than 9:00 a.m., New York
City time, on the second business day prior to the Effective Time or the date of
filing, as applicable.
(c) The Company and Ribapharm shall promptly use their reasonable best
efforts to take such action as may be necessary so that (i) each of the Shelf
Registration Statement and any amendment thereto and the Prospectus forming a
part thereof and any amendment or supplement thereto (and each report or other
document incorporated therein by reference in each case) complies in all
material respects with the Securities Act and the Exchange Act and the
respective rules and regulations thereunder, (ii) each of the Shelf Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and, (iii) subject to Section 2(c), each of the Prospectus forming a part of the
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time during the Effectiveness Period include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Company and Ribapharm, jointly and severally, shall promptly
advise each Electing Holder, and shall confirm such advice in writing if so
requested by any such Electing Holder:
(i) when a Shelf Registration Statement and any amendment thereto
has been filed with the Commission and when a Shelf Registration Statement
or any post-effective amendment thereto has become effective, in each case
making a public announcement thereof by release made to Reuters Economic
Services and Bloomberg Business News;
(ii) of any request by the Commission for amendments or supplements
to the Shelf Registration Statement or the Prospectus included therein or
for additional information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Shelf Registration Statement or the initiation of
any proceedings for such purpose;
(iv) of the receipt by the Company or Ribapharm of any notification
with respect to the suspension of the qualification of the securities
included in the Shelf Registration Statement for sale in any jurisdiction
or the initiation of any proceeding for such purpose; and
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(v) of the occurrence of any event or the existence of any state
of facts (but not as to the substance of any such event or facts) that
requires the making of any changes in the Shelf Registration Statement or
the Prospectus included therein so that, as of such date, such Shelf
Registration Statement and Prospectus do not contain an untrue statement
of a material fact and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were made)
not misleading (which advice shall be accompanied by an instruction to
such Holders to suspend the use of the Prospectus until the requisite
changes have been made).
(e) The Company and Ribapharm shall use their reasonable best efforts to
prevent the issuance, and if issued to obtain the withdrawal at the earliest
possible time, of any order suspending the effectiveness of the Shelf
Registration Statement.
(f) The Company and Ribapharm shall furnish to each Electing Holder,
without charge, at least one copy of the Shelf Registration Statement and all
post-effective amendments thereto, including financial statements and schedules,
and, if such Electing Holder so requests in writing, all reports, other
documents and exhibits that are filed with or incorporated by reference in the
Shelf Registration Statement.
(g) The Company and Ribapharm shall, during the Effectiveness Period,
deliver to each Electing Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as such Electing
Holder may reasonably request; and the Company consents (except during the
periods specified in Section 2(c) above or during the continuance of any event
or the existence of any state of facts described in Section 3(d)(v) above) to
the use of the Prospectus and any amendment or supplement thereto by each of the
Electing Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus and any amendment or supplement thereto
during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, the Company and Ribapharm shall use their
reasonable best efforts to (i) register or qualify, to the extent required by
law, or cooperate with the Electing Holders and their respective counsel in
connection with the registration or qualification of such Registrable Securities
for offer and sale under the securities or "blue sky" laws of such jurisdictions
within the United States as any Electing Holder may reasonably request, (ii)
keep such registrations or qualifications in effect and comply with such laws so
as to permit the continuance of offers and sales in such jurisdictions for so
long as may be necessary to enable any Electing Holder or underwriter, if any,
to complete its distribution of Registrable Securities pursuant to the Shelf
Registration Statement, and (iii) take any and all other actions necessary or
advisable to enable the disposition in such jurisdictions of such Registrable
Securities; provided, however, that in no event shall the Company or Ribapharm
be obligated to (A) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 3(h) or (B) file any general consent to service of
process in any jurisdiction where it is not as of the date hereof so subject.
(i) Unless any Registrable Securities shall be in book-entry only form,
the Company and Ribapharm shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to the Shelf Registration Statement,
which certificates, if so required by any securities exchange upon which any
Registrable Securities are listed, shall be penned, lithographed or engraved, or
produced by
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any combination of such methods, on steel engraved borders, and which
certificates shall be free of any restrictive legends and in such permitted
denominations and registered in such names as Electing Holders may request in
connection with the sale of Registrable Securities pursuant to the Shelf
Registration Statement.
(j) Upon the occurrence of any event or the existence of any state of
facts contemplated by paragraph 3(d)(v) above, the Company shall promptly
prepare a post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Company and Ribapharm notify the Electing Holders
of the occurrence of any event or the existence of any state of facts
contemplated by paragraph 3(d)(v) above, the Electing Holder shall suspend the
use of the Prospectus until the requisite changes to the Prospectus have been
made.
(k) Not later than the Effective Time of the Shelf Registration
Statement, the Company and Ribapharm shall provide a CUSIP number for the
Registrable Securities that are debt securities.
(l) The Company and Ribapharm shall use their reasonable best efforts to
comply with all applicable Rules and Regulations, and to make generally
available (unless otherwise publicly available through the Commission's Xxxxx
system) to its securityholders as soon as practicable, but in any event not
later than eighteen months after (i) the effective date (as defined in Rule
158(c) under the Securities Act) of the Shelf Registration Statement, (ii) the
effective date of each post-effective amendment to the Shelf Registration
Statement, and (iii) the date of each filing by the Company and Ribapharm with
the Commission of an Annual Report on Form 10-K that is incorporated by
reference in the Shelf Registration Statement, an earnings statement of the
Company, Ribapharm and their respective subsidiaries complying with Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company and Ribapharm, Rule 158).
(m) Not later than the Effective Time of the Shelf Registration
Statement, the Company and Ribapharm shall cause the Indenture to be qualified
under the Trust Indenture Act; in connection with such qualification, the
Company and Ribapharm shall cooperate with the Trustee under the Indenture and
the Holders (as defined in the Indenture) to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and the Company and Ribapharm shall
execute, and shall use their reasonable best efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner. In the event that any such
amendment or modification referred to in this Section 3(m) involves the
appointment of a new trustee under the Indenture, the Company and Ribapharm
shall appoint a new trustee thereunder pursuant to the applicable provisions of
the Indenture.
(n) In the event of an underwritten offering conducted pursuant to
Section 6 hereof, the Company and Ribapharm shall, if requested, promptly
include or incorporate in a Prospectus supplement or post-effective amendment to
the Shelf Registration Statement such information as the Managing Underwriters
reasonably agree should be included therein and to which the Company and
Ribapharm do not reasonably object and shall make all required filings of such
Prospectus supplement or post-effective amendment as soon as practicable after
it is notified of
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the matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.
(o) The Company and Ribapharm shall enter into such customary agreements
(including an underwriting agreement in customary form in the event of an
underwritten offering conducted pursuant to Section 6 hereof) and take all other
appropriate action in order to expedite and facilitate the registration and
disposition of the Registrable Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 hereof with respect to all parties to be indemnified pursuant
to Section 5 hereof.
(p) The Company and Ribapharm, jointly and severally, shall:
(i) (A) make reasonably available for inspection by the Electing
Holders, any underwriter participating in any disposition pursuant to the
Shelf Registration Statement, and any attorney, accountant or other agent
retained by such Electing Holders or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties
of the Company, Ribapharm and their respective subsidiaries, and (B) cause
the Company's and Ribapharm's officers, directors and employees to supply
all information reasonably requested by such Electing Holders or any such
underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as is customary for similar due
diligence examinations; provided, however, that all records, information
and documents that are designated in writing by the Company and Ribapharm,
in good faith, as confidential shall be kept confidential by such Electing
Holders and any such underwriter, attorney, accountant or agent, unless
such disclosure is made in connection with a court proceeding or required
by law, or such records, information or documents become available to the
public generally or through a third party without an accompanying
obligation of confidentiality; and provided further that, if the foregoing
inspection and information gathering would otherwise disrupt the Company's
and Ribapharm's conduct of their business, such inspection and information
gathering shall, to the greatest extent possible, be coordinated on behalf
of the Electing Holders and the other parties entitled thereto by one
counsel designated by and on behalf of the Electing Holders and other
parties;
(ii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, make such representations and warranties to
the Electing Holders participating in such underwritten offering and to
the Managing Underwriters, in form, substance and scope as are customarily
made by the Company and Ribapharm to underwriters in primary underwritten
offerings of equity and convertible debt securities and covering matters
including, but not limited to, those set forth in the Purchase Agreement;
(iii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain opinions of counsel to the Company
and Ribapharm (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters) addressed
to each Electing Holder participating in such underwritten offering and
the underwriters, covering such matters as are customarily covered in
opinions requested in primary underwritten offerings of equity and
convertible debt securities and such other matters as may be reasonably
requested by such Electing Holders and underwriters (it being agreed that
the matters to be covered by such opinions shall include, without
limitation, as of the date of the opinion and as of the Effective
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Time of the Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, the absence from the Shelf
Registration Statement and the Prospectus, including the documents
incorporated by reference therein, of an untrue statement of a material
fact or the omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading);
(iv) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain "cold comfort" letters and updates
thereof from the independent public accountants of the Company and
Ribapharm (and, if necessary, from the independent public accountants of
any subsidiary of the Company or Ribapharm or of any business acquired by
the Company or Ribapharm for which financial statements and financial data
are, or are required to be, included in the Shelf Registration Statement),
addressed to each Electing Holder participating in such underwritten
offering (if such Electing Holder has provided such letter,
representations or documentation, if any, required for such cold comfort
letter to be so addressed) and the underwriters, in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with primary underwritten offerings;
(v) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, deliver such documents and certificates as
may be reasonably requested by any Electing Holders participating in such
underwritten offering and the Managing Underwriters, if any, including,
without limitation, certificates to evidence compliance with Section 3(j)
hereof and with any conditions contained in the underwriting agreement or
other agreements entered into by the Company and Ribapharm.
(q) The Company and Ribapharm will use their best efforts to cause the
Common Stock issuable upon conversion of the Securities to be listed on the New
York Stock Exchange or other stock exchange or trading system on which the
Common Stock primarily trades on or prior to the Effective Time of the Shelf
Registration Statement hereunder.
(r) In the event that any broker dealer registered under the Exchange
Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or
any successor provision thereto)) of the Company or Ribapharm or has a "conflict
of interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor
provision thereto)) and such broker dealer shall underwrite, participate as a
member of an underwriting syndicate or selling group or assist in the
distribution of any Registrable Securities covered by the Shelf Registration
Statement, whether as a Holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company and Ribapharm shall assist such broker dealer
in complying with the requirements of the NASD Rules, including, without
limitation, by (A) engaging a "qualified independent underwriter" (as defined in
Rule 2720(b)(15) of the NASD Rules (or any successor provision thereto)) to
participate in the preparation of the registration statement relating to such
Registrable Securities, to exercise usual standards of due diligence in respect
thereto and to recommend the public offering price of such Registrable
Securities, (B) indemnifying such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof, and
(C) providing such information to such broker dealer as may be required in order
for such broker-dealer to comply with the requirements of the NASD Rules.
(s) The Company and Ribapharm shall use their reasonable best efforts to
take all other steps necessary to effect the registration, offering and sale of
the Registrable Securities covered by the Shelf Registration Statement
contemplated hereby.
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4. Registration Expenses. Except as otherwise provided in Section 3,
the Company and Ribapharm shall bear all fees and expenses incurred in
connection with the performance of its obligations under Sections 2, 3 and 6
hereof. Each Electing Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Electing Holder's Registrable Securities pursuant to the Shelf Registration
Statement and the fees and disbursements of counsel and other advisors or
experts retained by such Electing Holder.
5. Indemnification and Contribution.
(a) Indemnification by the Company and Ribapharm. Upon the registration
of the Registrable Securities pursuant to Section 2 hereof, the Company and
Ribapharm shall indemnify and hold harmless each Electing Holder and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities, and each of their
respective officers and directors and each person who controls such Electing
Holder, underwriter, selling agent or other securities professional within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each such person being sometimes referred to as an "Indemnified Person")
against any losses, claims, damages or liabilities, joint or several, to which
such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (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 Shelf Registration
Statement under which such Registrable Securities are to be registered under the
Securities Act, or any Prospectus contained therein or furnished by the Company
and Ribapharm to any Indemnified Person, or 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 not misleading, and the Company and Ribapharm hereby agree to
reimburse such Indemnified Person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company and
Ribapharm shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Shelf Registration Statement or Prospectus, or
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company and Ribapharm by such Indemnified Person
expressly for use therein; and provided, further, that the Company and Ribapharm
will not be liable to any Indemnified Person with respect to any preliminary
Prospectus to the extent that the Company and Ribapharm shall sustain the burden
of proving that any such loss, liability, claim, damage or expense resulted from
the fact that such Indemnified Person, in contravention of applicable law, sold
Securities to a person to whom such Indemnified Person failed to send or give,
at or prior to the written confirmation of such sale, a copy of the final
Prospectus (excluding documents incorporated by reference) as then amended or
supplemented if (I) the Company and Ribapharm have previously furnished copies
thereof (sufficiently in advance of the written confirmation of such sale to
allow for distribution by the written confirmation of such sale) to the
Indemnified Person and the loss, liability, claim, damage or expense of such
Indemnified Person resulted from an untrue statement or omission or alleged
untrue statement or omission of a material fact contained in or omitted from the
preliminary Prospectus which was corrected in the final Prospectus (excluding
documents incorporated by reference) or the final Prospectus as then amended or
supplemented (excluding documents incorporated by reference) prior to written
confirmation of such sale and such Prospectus (excluding documents incorporated
by reference) was required by law to be delivered at or prior to the written
confirmation of sale of Securities to such person and (ii) such failure to give
or send such final Prospectus (excluding documents incorporated by reference) by
the
11
written confirmation of the sale to the party or parties asserting such loss,
liability, claim, damage or expense would have constituted the sole defense to
the claim asserted by such person.
(b) Indemnification by the Electing Holders and any Agents and
Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of
any of such Electing Holder's Registrable Securities in such Shelf Registration
Statement, and each underwriter, selling agent or other securities professional,
if any, which facilitates the disposition of Registrable Securities shall agree,
as a consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company,
Ribapharm and their respective directors, officers who sign any Shelf
Registration Statement and each person, if any, who controls the Company and
Ribapharm within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, Ribapharm or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (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 such Shelf Registration Statement or Prospectus, or any amendment
or supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company and Ribapharm by
such Electing Holder, underwriter, selling agent or other securities
professional expressly for use therein, and (ii) reimburse the Company and
Ribapharm for any legal or other expenses reasonably incurred by the Company and
Ribapharm in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under this Section 5, notify such
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 otherwise than under the indemnification
provisions of or contemplated by subsection (a) or (b) above. In case any such
action shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, such 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 satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, such indemnifying party shall
not be liable to such indemnified party under this Section 5 for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
12
(d) Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Electing Holders and any underwriters,
selling agents or other securities professionals in this Section 5(d) to
contribute shall be several in proportion to the percentage of principal amount
of Registrable Securities registered or underwritten, as the case may be, by
them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be required to undertake liability to any person
under this Section 5 for any amounts in excess of the dollar amount of the
proceeds to be received by such Holder from the sale of such Holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement under which
such Registrable Securities are to be registered under the Securities Act and
(ii) underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.
(f) The obligations of the Company and Ribapharm under this Section 5
shall be in addition to any liability which the Company and Ribapharm may
otherwise have to any Indemnified Person and the obligations of any Indemnified
Person under this Section 5 shall be in addition to any liability which such
Indemnified Person may otherwise have to the Company and Ribapharm or any other
Person entitled to the benefits of Section 5(b) above. The remedies provided in
this Section 5 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to an indemnified party at law or in equity.
6. Underwritten Offering. Any Holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that (i) the Electing Holders of at least 50% in
aggregate principal amount of the Registrable Securities then covered by the
Shelf Registration Statement shall request such an offering and (ii) at least
13
such aggregate principal amount of such Registrable Securities shall be included
in such offering; and provided further that the Company and Ribapharm shall not
be obligated to cooperate with more than one underwritten offering during the
Effectiveness Period. Upon receipt of such a request, the Company and Ribapharm
shall provide all Holders of Registrable Securities written notice of the
request, which notice shall inform such Holders that they have the opportunity
to participate in the offering. In any such underwritten offering, the
investment banker or bankers and manager or managers that will administer the
offering will be selected by, and the underwriting arrangements with respect
thereto (including the size of the offering) will be approved by, the holders of
a majority of the Registrable Securities to be included in such offering;
provided, however, that such investment bankers and managers and underwriting
arrangements must be reasonably satisfactory to the Company and Ribapharm. No
Holder may participate in any underwritten offering contemplated hereby unless
(a) such Holder agrees to sell such Xxxxxx's Registrable Securities to be
included in the underwritten offering in accordance with any approved
underwriting arrangements, (b) such Holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements, and (c) if such Holder is not then an Electing
Holder, such Xxxxxx returns a completed and signed Notice and Questionnaire to
the Company and Ribapharm in accordance with Section 3(a)(ii) hereof within a
reasonable amount of time before such underwritten offering. The Holders
participating in any underwritten offering shall be responsible for any
underwriting discounts and commissions and fees and expenses of their own
counsel. The Company and Ribapharm shall pay all expenses customarily borne by
issuers in an underwritten offering, including but not limited to filing fees,
the fees and disbursements of its counsel and independent public accountants and
any printing expenses incurred in connection with such underwritten offering.
Notwithstanding the foregoing or the provisions of Section 3(n) hereof, upon
receipt of a request from the Managing Underwriter or a representative of
holders of a majority of the Registrable Securities to be included in an
underwritten offering to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company and Ribapharm may delay the filing of any such amendment
or supplement for up to 90 days if the Board of Directors of the Company shall
have determined in good faith that the Company has a bona fide business reason
for such delay.
7. Liquidated Damages.
(a) If, except as permitted by Section 2(a) hereof, (i) on or prior to
the 90th day following the Closing Date, a Shelf Registration Statement has not
been filed with the Commission or (ii) on or prior to the 270th day following
the Closing Date, such Shelf Registration Statement is not declared effective by
the Commission (each, a "Registration Default"), the Company and Ribapharm,
jointly and severally, shall be required to pay liquidated damages ("Liquidated
Damages"), from and including the day following such Registration Default until
such Shelf Registration Statement is either so filed or so filed and
subsequently declared effective, as applicable, at a rate per annum equal to an
additional one-quarter of one percent (0.25%) of the principal amount of
Registrable Securities, to and including the 90th day following such
Registration Default and one-half of one percent (0.50%) thereof from and after
the 91st day following such Registration Default.
(b) In the event that, except as permitted by Section 2(c) hereof, (i)
the Shelf Registration Statement ceases to be effective, (ii) the Company or
Ribapharm suspend the use of the Prospectus otherwise than as permitted by
Section 2(c) hereof, (iii) the Holders are not authorized to use the Prospectus
pursuant to Section 3(g) hereto or (iv) the Holders are otherwise prevented or
restricted by the Company or Ribapharm from effecting sales pursuant to the
Shelf
14
Registration Statement (an "Effective Failure") for more than 30 days, whether
or not consecutive, in any 90-day period, or for more than 90 days, whether or
not consecutive, during any 12-month period, then the Company and Ribapharm,
jointly and severally, shall pay Liquidated Damages at a rate per annum equal to
an additional one-half of one percent (0.50%) of the principal amount of
Registrable Securities from the 31st day of the applicable 90-day period or the
91st day of the applicable 12-month period, as the case may be, that any such
Effective Failure has existed until the earlier of (1) the time the Holders of
Registrable Securities are again able to make sales under the Shelf Registration
Statement or (2) the expiration of the Effectiveness Period.
(c) Any amounts to be paid as Liquidated Damages pursuant to paragraphs
(a) or (b) of this Section 7 shall be paid in cash semi-annually in arrears,
with the first semi-annual payment due on the first Interest Payment Date (as
defined in the Indenture), as applicable, following the date of such
Registration Default or Effective Failure, as applicable. Such Liquidated
Damages will accrue in respect of the Securities at the rates set forth in
paragraphs (a) or (b) of this Section 7, as applicable, on the principal amount
of the Securities; provided, however, notwithstanding anything in this Agreement
to the contrary, no Liquidated Damages shall accrue or be payable with respect
to the Securities solely as a result of a Registration Default or Effective
Failure with respect to the Common Stock.
(d) In respect of Securities submitted for conversion into Common Stock
during a Registration Default, the Company and Ribapharm, jointly and severally,
agree to pay accrued and unpaid Liquidated Damages calculated in accordance with
this Section 7 up to and including the date of settlement of the Company's and
Ribapharm's conversion obligation in accordance with the Indenture and to issue
additional shares of Common Stock to each Holder that has submitted for
conversion some or all of its Securities into Common Stock equal to 3% of the
Applicable Conversion Rate (as defined in the Indenture) for each $1,000
principal amount of Securities (except to the extent the Company and Ribapharm
elect to deliver cash upon conversion in accordance with the terms of the
Indenture).
(e) Except as provided in Section 8(b) hereof, the Liquidated Damages as
set forth in this Section 7 shall be the exclusive monetary remedy available to
the Holders of Registrable Securities for such Registration Default or Effective
Failure. In no event shall the Company and Ribapharm be required to pay
Liquidated Damages in excess of the applicable maximum amount of one-half of one
percent (0.50%) set forth above, regardless of whether one or multiple
Registration Defaults or Effective Failures exist.
(f) Notwithstanding anything in this Agreement to the contrary, no
Holder shall be entitled to Liquidated Damages pursuant to this Section 7 unless
such Holder is an Electing Holder.
8. Miscellaneous.
(a) Other Registration Rights. The Company and Ribapharm may grant
registration rights that would permit any person that is a third party the right
to piggy back on any Shelf Registration Statement, provided that if the Managing
Underwriter of any underwritten offering conducted pursuant to Section 6 hereof
notifies the Company, Ribapharm and the Electing Holders that the total amount
of securities which the Electing Holders and the holders of such piggy back
rights intend to include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggy back rights will be reduced
to the extent necessary to reduce the total amount of securities
15
to be included in such offering to the amount, number and kind recommended by
the Managing Underwriter prior to any reduction in the amount of Registrable
Securities to be included in such Shelf Registration Statement.
(b) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company and Ribapharm fail to perform
any of their obligations hereunder and that the Purchasers and the Holders from
time to time may be irreparably harmed by any such failure, and accordingly
agree that the Purchasers and such Holders, in addition to any other remedy to
which they may be entitled at law or in equity and without limiting the remedies
available to the Electing Holders under Section 7 hereof, shall be entitled to
compel specific performance of the obligations of the Company and Ribapharm
under this Registration Rights Agreement in accordance with the terms and
conditions of this Registration Rights Agreement, in any court of the United
States or any State thereof having jurisdiction.
(c) Amendments and Waivers. This Agreement, including this Section 8(c),
may be amended, and waivers or consents to departures from the provisions hereof
may be given, only by a written instrument duly executed by the Company,
Ribapharm and the holders of a majority in aggregate principal amount of
Registrable Securities then outstanding. Each Holder of Registrable Securities
outstanding at the time of any such amendment, waiver or consent or thereafter
shall be bound by any amendment, waiver or consent effected pursuant to this
Section 8(c), whether or not any notice, writing or marking indicating such
amendment, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Indenture.
(e) Parties in Interest. The parties to this Agreement intend that all
Holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
Holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(j) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto 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 any
Electing Holder, any director, officer or partner of such Holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such Holder.
17
Please confirm that the foregoing correctly sets forth the agreement among
the Company, Ribapharm and you.
Very truly yours,
VALEANT PHARMACEUTICALS INTERNATIONAL
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
RIBAPHARM INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Treasurer
Accepted as of the date hereof:
BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
XXXXXXX, XXXXX & CO.
/s/ Xxxxxxx Xxxxx & Co.
----------------------------------
(Xxxxxxx, Xxxxx & Co.)
(Signature Page to Registration Rights Agreement)
18
APPENDIX A
VALEANT PHARMACEUTICALS INTERNATIONAL
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the Valeant Pharmaceuticals
International (the "Company") __% Convertible Subordinated Notes due__ (the
"Securities") are held.
The Company is in the process of registering the Securities under
the Securities Act of 1933 for resale by the beneficial owners thereof. In order
to have their Securities included in the registration statement, beneficial
owners must complete and return the enclosed Notice of Registration Statement
and Selling Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a
copy of the enclosed materials as soon as possible as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy
of the enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact [NAME, ADDRESS AND
TELEPHONE NUMBER OF CONTACT AT THE COMPANY].
19
VALEANT PHARMACEUTICALS INTERNATIONAL
Notice of Registration Statement
and
Selling Securityholder Questionnaire
[DATE]
Valeant Pharmaceuticals International (the "Company") [HAS FILED](1)
with the United States Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (the "Shelf Registration Statement") for the
registration and resale under Rule 415 of the United States Securities Act of
1933, as amended (the "Securities Act"), of the Company's __% Convertible
Subordinated Notes due __ (the "Securities") and the shares of common stock, par
value $.01 per share, including associated preferred stock purchase rights (the
"Common Stock"), issuable upon conversion thereof, in accordance with the
Registration Rights Agreement, dated as of November 19, 2003 (the "Registration
Rights Agreement"), between the Company and the purchasers named therein.
Ribapharm Inc. ("Ribapharm"), a wholly owned subsidiary of the
Company, is an obligor with respect to the Securities and shall be subject to
the provisions of the Registration Rights Agreement, jointly and severally with
the Company, but only for so long as Ribapharm shall have outstanding
obligations under the 6-1/2% Convertible Subordinated Notes due 2008, originally
issued under an Indenture, dated as of July 18, 2001, among Valeant
Pharmaceuticals International, Ribapharm and The Bank of New York, as Trustee.
A copy of the Registration Rights Agreement is attached hereto. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.
In order to have Registrable Securities included in the Shelf
Registration Statement (or a supplement or amendment thereto), this Notice of
Registration Statement and Selling Securityholder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company at the
address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE].
Beneficial owners of Registrable Securities who do not complete, execute and
return this Notice and Questionnaire by such date (i) will not be named as
selling securityholders in the Shelf Registration Statement and (ii) may not use
the Prospectus forming a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding
--------
(1) The bracketed language assumes that the Company will file the Shelf
Registration Statement before mailing the Notice and Questionnaire to
holders of Registrable Securities, rather than mailing the Notice and
Questionnaire, waiting 30 days for responses, and then filing the Shelf
Registration Statement.
20
the consequences of being named or not being named as a selling securityholder
in the Shelf Registration Statement and related Prospectus.
The term "Registrable Securities" is defined in the Registration
Rights Agreement to mean all or any portion of the Securities issued from time
to time under the Indenture in registered form and the shares of Common Stock
issuable upon conversion of such Securities; provided, however, that a security
ceases to be a Registrable Security when it is no longer a Restricted Security.
The term "Restricted Security" is defined in the Registration Rights
Agreement to mean any Security or share of Common Stock issuable upon conversion
thereof except any such Security or share of Common Stock which (i) has been
effectively registered under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement, (ii) has been transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto), or (iii) has otherwise been transferred and a new
Security or share of Common Stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company in accordance
with Section ___ of the Indenture.
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire, agrees
to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement, including, without limitation, Section 5 of the Registration Rights
Agreement, as if the undersigned Selling Securityholder were an original party
thereto.(2)
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and the Trustee the Notice of Transfer (completed and signed) set
forth in Exhibit 1 to this Notice and Questionnaire.
The Selling Securityholder hereby provides the following information
to the Company and represents and warrants that such information is accurate and
complete:
----------
(2) If the Registration Rights Agreement is not included with the mailing of
the Notice and Questionnaire, the indemnity in Section 5(b) of the
Registration Rights Agreement, as it relates to Selling Stockholders,
should be repeated, in its entirety, in the Notice and Questionnaire.
21
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
____________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as in (a)
above) of Registrable Securities Listed in Item (3) Below:
____________________________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not the
same as (b) above) Through Which Registrable Securities Listed in
Item (3) Below are Held:
____________________________________________________________________
(2) Address for Notices to Selling Securityholder:
______________________
______________________
______________________
Telephone: ______________________
Fax: ______________________
Contact Person: ______________________
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned Selling
Securityholder does not beneficially own any Securities or shares of
Common Stock issued upon conversion, repurchase or redemption of any
Securities.
(a) Principal amount of Registrable Securities (as defined in the
Registration Rights Agreement) beneficially owned:__________________
CUSIP No(s). of such Registrable Securities:________________________
Number of shares of Common Stock (if any) issued upon conversion,
repurchase or redemption of Registrable Securities:_________________
(b) Principal amount of Securities other than Registrable Securities
beneficially owned: CUSIP No(s). of such other Securities:__________
Number of shares of Common Stock (if any) issued upon conversion of
such other Securities:______________________________________________
(c) Principal amount of Registrable Securities which the undersigned
wishes to be included in the Shelf Registration Statement:__________
CUSIP No(s). of such Registrable Securities to be included in the
Shelf Registration Statement:_______________________________________
Number of shares of Common Stock (if any) issued upon conversion of
Registrable Securities which are to be included in the Shelf
Registration Statement:_______________________________
(4) Beneficial Ownership of Other Securities of the Company or
Ribapharm:
22
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any
shares of Common Stock or any other securities of the Company or
Ribapharm, other than the Securities and shares of Common Stock
listed above in Item (3).
State any exceptions here:
(5) Relationships with the Company and Ribapharm:
Except as set forth below, neither the Selling Securityholder nor
any of its affiliates, officers, directors or principal equity
holders (5% or more) has held any position or office or has had any
other material relationship with the Company or Ribapharm (or their
predecessors or affiliates) during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in
Item (3) only as follows (if at all): Such Registrable Securities
may be sold from time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters,
broker-dealers or agents. Such Registrable Securities may be sold in
one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time
of sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve crosses or block transactions) (i)
on any national securities exchange or quotation service on which
the Registrable Securities may be listed or quoted at the time of
sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of options. In
connection with sales of the Registrable Securities or otherwise,
the Selling Securityholder may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the
Registrable Securities in the course of hedging the positions they
assume. The Selling Securityholder may also sell Registrable
Securities short and deliver Registrable Securities to close out
such short positions, or loan or pledge Registrable Securities to
broker-dealers that in turn may sell such securities.
State any exceptions here:
Note: In no event may such method(s) of distribution take the form
of an underwritten offering of the Registrable Securities without the prior
agreement of the Company.
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
prospectus delivery and other provisions of the Securities Act and the Exchange
Act and the rules and regulations thereunder, particularly Regulation M.
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to the Company and Ribapharm, the Selling
Securityholder agrees to notify the
23
transferee(s) at the time of the transfer of its rights and obligations under
this Notice and Questionnaire and the Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the
disclosure of the information contained herein in its answers to Items (1)
through (6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Securityholder
understands that such information will be relied upon by the Company and
Ribapharm in connection with the preparation of the Shelf Registration Statement
and related Prospectus.
In accordance with the Selling Securityholder's obligation under
Section 3(a) of the Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company and Ribapharm of
any inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains in effect. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air
courier guaranteeing overnight delivery as follows:
(i) To the Company:
_________________________
_________________________
_________________________
_________________________
_________________________
(ii) With a copy to:
_________________________
_________________________
_________________________
_________________________
_________________________
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company and Ribapharm, the terms of this
Notice and Questionnaire, and the representations and warranties contained
herein, shall be binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal representatives, and
assigns of the Company, Ribapharm and the Selling Securityholder (with respect
to the Registrable Securities beneficially owned by such Selling Securityholder
and listed in Item (3) above). This Agreement shall be governed in all respects
by the laws of the State of New York.
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IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:_____________________
____________________________________________________________________
Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable
Securities)
By:_________________________________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY AT:
_________________________
_________________________
_________________________
_________________________
_________________________
25
EXHIBIT 1
TO APPENDIX A
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Valeant Pharmaceuticals International
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Attention: General Counsel
The Bank of New York
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Services
Re: Valeant Pharmaceuticals International (the "Company")
__% Convertible Subordinated Notes due __ (the "Notes")
Dear Sirs:
Please be advised that _____________________ has transferred
$___________ aggregate principal amount of the above-referenced Notes or shares
of the Company's common stock, issued upon conversion, repurchase or redemption
of Notes, pursuant to an effective Registration Statement on Form S-3 (File No.
333-____) filed by the Company and Ribapharm Inc.
We hereby certify that the prospectus delivery requirements, if any,
of the Securities Act of 1933, as amended, have been satisfied with respect to
the transfer described above and that the above-named beneficial owner of the
Notes or common stock is named as a selling securityholder in the Prospectus
dated November [ ], 2003, or in amendments or supplements thereto, and that the
aggregate principal amount of the Notes or number of shares of common stock
transferred are [A PORTION OF] the Notes or shares of common stock listed in
such Prospectus as amended or supplemented opposite such owner's name.
Dated:
Very truly yours,
________________________
(Name)
By: ________________________
(Authorized Signature)
26
