Exhibit 10.1
Execution Version
$125,000,000
ISIS PHARMACEUTICALS,
INC.
2 5 ¤
8 % Convertible Subordinated Notes due
2027
PURCHASE
AGREEMENT
January 17, 2007
LEHMAN BROTHERS INC.,
As Representative of the several
Initial Purchasers named in Schedule I attached
hereto,
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Ladies and Gentlemen:
Isis Pharmaceuticals, Inc., a
Delaware corporation (the “ Company ”),
proposes, upon the terms and conditions set forth in this agreement
(this “ Agreement ”), to issue and sell to you,
as the initial purchasers (the “ Initial Purchasers
”), $125,000,000 in aggregate principal amount of its
2 5 ¤ 8 %
Convertible Subordinated Notes due 2027 (the “ Firm
Securities ”). The Firm Securities will (i) have
terms and provisions that are summarized in the Pricing Disclosure
Package (as defined below) and Offering Memorandum (as defined
below) and (ii) are to be issued pursuant to an Indenture (the
“ Indenture ”) to be entered into between the
Company and Wells Fargo Bank, NA, as trustee (the “
Trustee ”). The Company also proposes to issue
and sell to the Initial Purchasers not more than an additional
$37,500,000 principal amount of its 2 5 ¤ 8 %
Convertible Subordinated Notes due 2027 (the “ Additional
Securities ”) if and to the extent that you, as
Representative of the Initial Purchasers, shall have determined to
exercise, on behalf of the Initial Purchasers, the right to
purchase such 2 5
¤
8 % Convertible Subordinated Notes due 2027
granted to the Initial Purchasers in Section 3(a) hereof. The
Firm Securities and the Additional Securities are hereinafter
collectively referred to as the “ Securities.
” The Securities will be convertible into shares of the
Company’s common stock (par value $0.001 per share) (the
“ Underlying Securities ”). This is to
confirm the agreement concerning the purchase of the Securities
from the Company by the Initial Purchasers.
1.
Purchase and Resale of the Securities . The Securities
will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the
“ Securities
Act ”), in reliance on an
exemption pursuant to Section 4(2) under the Securities Act.
The Company has prepared a preliminary offering memorandum, dated
January 16, 2007 (together with the documents incorporated by
reference therein, the “ Preliminary Offering Memorandum
”), a
pricing term sheet substantially in the form attached hereto as
Schedule II (the “ Pricing Term Sheet ”) setting forth the
terms of the Securities omitted from the Preliminary Offering
Memorandum and an offering memorandum, dated January 17, 2007
(together with the documents incorporated by reference therein, the
“ Offering
Memorandum ”),
setting forth
information regarding the Company and the Securities (as defined
herein). The Preliminary Offering Memorandum, as supplemented
and amended as of the Applicable Time (as defined below), together
with the Pricing Term Sheet and any of the documents listed on
Schedule III hereto are collectively referred to as the
“ Pricing Disclosure
Package .” The Company hereby
confirms that it has authorized the use of the Preliminary Offering
Memorandum, the Pricing Disclosure Package and the Offering
Memorandum in connection with the offering and resale of the
Securities by the Initial Purchasers. “ Applicable Time ” means 7:00 p.m. (New
York City time) on the date of this Agreement.
Any reference to the Preliminary
Offering Memorandum, the Pricing Disclosure Package or theOffering
Memorandum shall be deemed to refer to and include the
Company’s most recent Annual Report on Form 10-K, the
Company’s most recent Quarterly Report on Form 10-Q and
all subsequent documents filed with the United States Securities
and Exchange Commission (the “ Commission ”)
pursuant to Section 13(a) or 15(d) of the United States Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”), on or prior to the date of the Preliminary Offering
Memorandum, the Pricing Disclosure Package or the Offering
Memorandum, as the case may be. Any reference to the
Preliminary Offering Memorandum, Pricing Disclosure Package or
theOffering Memorandum, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include
(i) any documents filed with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act after the date of the
Preliminary Offering Memorandum, Pricing Disclosure Package or the
Offering Memorandum, as the case may be, and prior to such
specified date. All documents referenced above that are filed
under the Exchange Act and so deemed to be included in the
Preliminary Offering Memorandum, Pricing Disclosure Package or the
Offering Memorandum, as the case may be, or any amendment or
supplement thereto are hereinafter called the “ Exchange
Act Reports .”
It is understood and acknowledged
that upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the
Securities Act, the Securities (and all securities issued in
exchange therefor or in substitution thereof) shall bear the
following legend (along with such other legends as the Initial
Purchasers and their counsel deem necessary):
‘‘THE SECURITIES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT),
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(2) AGREES THAT IT WILL NOT
PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER
PERIOD OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT
OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY)
OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED
BY APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION
DATE”), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR
(D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE
THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
You have advised the Company that
you will make offers (the “ Exempt Resales ”) of
the Securities purchased by you hereunder on the terms set forth in
each of the Pricing Disclosure Package and the Offering Memorandum,
as amended or supplemented, solely to persons (the “
Eligible Purchasers ”) whom you reasonably believe to
be “qualified institutional buyers” as defined in Rule
144A under the Securities Act (“ QIBs ”).
You will offer the Securities to Eligible Purchasers initially at a
price equal to 100% of the principal amount thereof plus accrued
interest, if any. Such price may be changed at any time
without notice.
Holders (including subsequent
transferees) of the Securities will have the registration rights
set forth in the registration rights agreement attached hereto as
Exhibit A (the “ Registration Rights Agreement
”) between the Company and the Initial Purchasers to be dated
January 23, 2007 (the “ Closing Date ”),
for so long as such Securities constitute “ Transfer
Restricted Securities ” (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights
Agreement, the Company will agree to file with the Commission under
the circumstances set forth therein, a shelf registration statement
under the Securities Act (the
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“ Resale Registration
Statement ”) relating to resales by holders of the
Securities and the Underlying Securities.
2.
Representations, Warranties and Agreements of the Company
. The Company represents, warrants and agrees as
follows:
(a)
When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the
Company that are listed on a United States national securities
exchange registered or that are quoted in a United States automated
inter-dealer quotation system.
(b)
Neither the Company nor any subsidiary is, and after giving effect
to the offer and sale of the Securities and the application of the
proceeds therefrom as described under “Use of Proceeds”
in each of the Pricing Disclosure Package and the Offering
Memorandum will be, (i) an “investment company” or a
company “controlled” by an “investment
company” within the meaning of the Investment Company Act of
1940 (the “Investment
Company Act” ), as amended, and the rules
and regulations of the Commission thereunder or (ii) a
“business development company” (as defined in Section
2(a)(48) of the Investment Company Act).
(c)
Assuming that your representations and warranties in Section 3(b)
are true, the purchase and resale of the Securities pursuant hereto
(including pursuant to the Exempt Resales) is exempt from the
registration requirements of the Securities Act. No form of
general solicitation or general advertising within the meaning of
Regulation D (including, but not limited to, advertisements,
articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising) was
used by the Company or any of its representatives (other than you,
as to whom the Company makes no representation) in connection with
the offer and sale of the Securities.
(d)
Each of the Preliminary Offering Memorandum, the Pricing Disclosure
Package and the Offering Memorandum, each as of its respective
date, contains all the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Securities
Act.
(e)
The Preliminary Offering Memorandum, the Pricing Disclosure Package
and the Offering Memorandum have been prepared by the Company for
use by the Initial Purchasers in connection with the Exempt
Resales. No order or decree preventing the use of the
Preliminary Offering Memorandum, the Pricing Disclosure Package or
the Offering Memorandum, or any order asserting that the
transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act has been issued,
and no proceeding for that purpose has commenced or is pending or,
to the knowledge of the Company is contemplated.
(f)
The Pricing Disclosure Package did not, as of the Applicable Time,
and will not, as of the Closing Date, contain an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements made therein, in the light of
the
4
circumstances
under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in
or omitted from the Pricing Disclosure Package in reliance upon and
in conformity with written information furnished to the Company
through the Representative by or on behalf of any Initial Purchaser
specifically for inclusion therein, which information is specified
in Section 8(e).
(g)
The Offering Memorandum will not, as of its date and as of the
Closing Date, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under
which they were made, not misleading; provided that no
representation or warranty is made as to information contained in
or omitted from the Offering Memorandum in reliance upon and in
conformity with written information furnished to the Company
through the Representative by or on behalf of any Initial Purchaser
specifically for inclusion therein, which information is specified
in Section 8(e).
(h)
The Company has not made any offer to sell or solicitation of an
offer to buy the Securities that would constitute a “free
writing prospectus” (if the offering of the Securities was
made pursuant to a registered offering under the Securities Act),
as defined in Rule 405 under the Securities Act (a “
Free Writing Offering
Document ”) without the prior
consent of the Representative; any such Free Writing Offering
Document the use of which has been previously consented to by the
Initial Purchasers is set forth substantially in form and substance
as attached hereto on Schedule III.
(i)
The Exchange Act Reports, when they were or are filed with the
Commission, conformed or will conform in all material respects to
the applicable requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder. The
Exchange Act Reports did not, when filed with the Commission,
contain an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were
made, not misleading.
(j)
The statistical and market-related data included under the captions
“Business” in the Company’s annual report on Form
10-K for the year ended December 31, 2005 and in
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the Company’s
quarterly report on Form 10-Q for the nine months ended September
30, 2006 incorporated by reference in the Pricing Disclosure
Package and the consolidated financial statements of the Company
and its subsidiaries included in the Pricing Disclosure Package are
based on or derived from sources that the Company believes do not
contain an untrue statement of material fact or omit to state a
material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made,
not misleading.
(k)
Each of the Company and its subsidiaries (as defined in Section 15)
has been duly organized and is validly existing and in good
standing as a corporation or other business entity under the laws
of its jurisdiction of organization and is duly qualified to do
business and in good standing as a foreign corporation or other
business entity in each jurisdiction in which its ownership or
lease of property or the conduct of its businesses requires such
qualification, except where the failure to be so qualified or in
good standing would not, in
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the aggregate,
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), results of operations,
stockholders’ equity, properties, business or prospects of
the Company and its subsidiaries taken as a whole or a material
adverse effect on the performance by the Company of the performance
of this Agreement, the Indenture, the Securities or the
Registration Rights Agreement or the consummation of any of the
transactions contemplated hereby or thereby (a “
Material Adverse Effect
”); each of
the Company and its subsidiaries has all power and authority
necessary to own or hold its properties and to conduct the
businesses in which it is engaged. The Company does not own or
control, directly or indirectly, any corporation, association or
other entity other than (i) the subsidiaries listed in the
Company’s Annual Report on Form 10-K for the most recent
fiscal year and (ii) the Company’s Ibis Biosciences, Inc.
subsidiary. None of the subsidiaries of the Company is a
“significant subsidiary” (as defined in Rule 405 under
the Securities Act).
(l)
The Company has an authorized capitalization as set forth in each
of the Pricing Disclosure Package and the Offering Memorandum on
the dates indicated therein, and all of the issued shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable, conform to the
description thereof contained in each of the Pricing Disclosure
Package and the Offering Memorandum and were issued in compliance
with federal and state securities laws and not in violation of any
preemptive right, resale right, right of first refusal or similar
right. All of the Company’s options, warrants and other
rights to purchase or exchange any securities for shares of the
Company’s capital stock have been duly authorized and validly
issued, conform to the description thereof contained in each of the
Pricing Disclosure Package and the Offering Memorandum and were
issued in compliance with federal and state securities laws.
There is no and has been no policy or practice of the Company to
intentionally coordinate the grant of options to employees with the
release or other public announcement of material information
regarding the Company or its results of operations or prospects to
minimize the exercise price of such options. All of the issued
shares of capital stock of each subsidiary of the Company have been
duly authorized and validly issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims,
except for such liens, encumbrances, equities or claims as would
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(m)
The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the
Indenture. The Indenture has been duly and validly authorized
by the Company, and upon its execution and delivery and, assuming
due authorization, execution and delivery by the Trustee, will
constitute the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights
generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law); no qualification of the Indenture under the Trust
Indenture Act of 1939 (the “ 1939 Act ”) is required in
connection with the offer and sale of the Securities contemplated
hereby or in connection with the Exempt Resales. The
Indenture will conform in all material respects to the description
thereof in each of the Pricing Disclosure Package and the Offering
Memorandum.
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(n)
The Company has all requisite corporate power and authority to
execute, issue, sell and perform its obligations under the
Securities. The Securities have been duly authorized by the
Company and, when duly executed by the Company in accordance with
the terms of the Indenture, assuming due authentication of the
Securities by the Trustee, upon delivery to the Initial Purchasers
against payment therefor in accordance with the terms hereof, will
be validly issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their
terms, except as such enforceability may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights
generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law). The Securities will conform in all material
respects to the description thereof in each of the Pricing
Disclosure Package and the Offering Memorandum.
(o)
The Company has all the requisite corporate power and authority to
issue the Underlying Securities issuable upon conversion of the
Securities. The Underlying Securities have been duly and
validly authorized by the Company and, and when issued upon
conversion of the Securities in accordance with the terms of the
Securities, will be validly issued, fully paid and non-assessable,
and the issuance of the Underlying Securities will not be subject
to any preemptive or similar rights.
(p)
The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been
duly authorized by the Company and, when executed and delivered by
the Company in accordance with the terms hereof and thereof, will
be validly executed and delivered and (assuming the due
authorization, execution and delivery thereof by you) will be the
legally valid and binding obligation of the Company in accordance
with the terms thereof, enforceable against the Company in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditor’s rights
generally, by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at
law) and, as to rights of indemnification and contribution, by
principles of public policy. The Registration Rights
Agreement will conform in all material respects to the description
thereof in each of the Pricing Disclosure Package and the Offering
Memorandum.
(q)
The Company has all requisite corporate power to execute, deliver
and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized, executed and
delivered by the Company.
(r)
The issue and sale of the Securities, the execution, delivery and
performance by the Company of the Securities, the Indenture, the
Registration Rights Agreement and this Agreement, the application
of the proceeds from the sale of the Securities as described under
“Use of Proceeds” in each of the Pricing Disclosure
Package and the Offering Memorandum and the consummation of the
transactions contemplated hereby and thereby, will not (i) conflict
with or result in a breach or violation of any of the terms or
provisions of, impose any lien, charge or encumbrance upon any
property or assets of the Company or its subsidiaries, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, license,
7
lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, (ii) result in
any violation of the provisions of the charter or by-laws or
similar organizational document of the Company or any of its
subsidiaries or (iii) result in any violation of any statute or any
judgment, order, decree, rule or regulation of any court or
arbitrator or federal, state, local or foreign governmental agency
or regulatory authority having jurisdiction over the properties or
assets of the Company or any of its subsidiaries or any of their
properties or assets (“ Governmental Authority ”), except, with
respect to clauses (i) and (iii), conflicts, breaches or violations
that would not reasonably be expected to have a Material Adverse
Effect, and with respect to clause (i) those that have been waived
or consented to prior to the execution of this
Agreement.
(s)
No consent, approval, authorization or order of, or filing,
registration or qualification with any Governmental Authority is
required for the issue and sale of the Securities, the execution,
delivery and performance by the Company of the Securities, the
Indenture, the Registration Rights Agreement and this Agreement,
the application of the proceeds from the sale of the Securities as
described under “Use of Proceeds” in each of the
Pricing Disclosure Package and the Offering Memorandum and the
consummation of the transactions contemplated hereby and thereby,
except for the filing of a registration statement by the Company
with the Commission pursuant to the Securities Act as required by
the Registration Rights Agreement and such consents, approvals,
authorizations, orders, filings, registrations or qualifications as
may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by
the Initial Purchasers and listing of the Underlying Securities on
the NASDAQ Global Market.
(t)
Except as identified in the Pricing Disclosure Package and the
Offering Memorandum, there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities
of the Company (other than the Registration Rights Agreement) owned
or to be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the
Registration Rights Agreement or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Securities Act.
(u)
Neither the Company nor any other person acting on behalf of the
Company has sold or issued any securities that would be integrated
with the offering of the Securities contemplated by this Agreement
pursuant to the Securities Act, the rules and regulations
thereunder or the interpretations thereof by the Commission. The
Company will take reasonable precautions designed to insure that
any offer or sale, direct or indirect, in the United States or to
any U.S. person (as defined in Rule 902 under the Securities Act),
of any Securities or any substantially similar security issued by
the Company, within six months subsequent to the date on which the
distribution of the Securities has been completed (as notified to
the Company by the Initial Purchasers), is made under restrictions
and other circumstances reasonably designed not to affect the
status of the offer and sale of the Securities in the United States
and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Securities Act,
including any sales pursuant to Rule 144A under the Securities
Act.
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(v)
Except as described in the each of the Pricing Disclosure Package
and the Offering Memorandum, neither the Company nor any of its
subsidiaries has sustained, since the date of the latest audited
financial statements included in the Pricing Disclosure Package,
any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or
decree, and, since such date, there has not been any change in the
total current assets, capital stock or long-term debt of the
Company or any of its subsidiaries or any adverse change, or any
development involving a prospective adverse change, in or affecting
the condition (financial or otherwise), results of operations,
stockholders’ equity, properties, management, business or
prospects of the Company and its subsidiaries, taken as a whole, in
each case except as would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(w)
The historical financial statements (including the related notes
and supporting schedules) included or incorporated by reference in
the Pricing Disclosure Package and the Offering Memorandum present
fairly in all material respects the financial condition, results of
operations and cash flows of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been
prepared in conformity with accounting principles generally
accepted in the United States applied on a consistent basis
throughout the periods involved. The other financial
information and data included in the Offering Memorandum are, in
all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records
of the Company.
(x)
Ernst & Young LLP, who have certified certain financial
statements of the Company, whose report appears in the Pricing
Disclosure Package and who have delivered the initial letter
referred to in Section 8(e) hereof, are independent public
accountants as required by the Securities Act and the rules and
regulations thereunder.
(y)
(i) The Company and each of its subsidiaries has good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects, except
such as are described in the Pricing Disclosure Package and the
Offering Memorandum and such as do not affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any of its subsidiaries;
and (ii) all assets held under lease by the Company or any of its
subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as do not interfere with
the use made and proposed to be made of such assets by the Company
or any of its subsidiaries; except, in the case of (i) and (ii), as
would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(z)
Except such as are described in the Pricing Disclosure Package and
the Offering Memorandum, the Company and each of its subsidiaries
carry, or are covered by, insurance from insurers of recognized
financial responsibility in such amounts and covering such risks
as, based on the Company’s internal assessments, is adequate
for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies
engaged in similar businesses in similar industries. All
policies of insurance of the Company and its subsidiaries are in
full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies in all material
respects; and neither the Company nor any of its subsidiaries has
received notice from any insurer or agent of such insurer that
capital
9
improvements or
other expenditures are required or necessary to be made in order to
continue such insurance; there are no claims by the Company or any
of its subsidiaries under any such policy or instrument as to which
any insurance company is denying liability or defending under a
reservation of rights clause; and neither the Company nor any such
subsidiary 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
reasonably be expected to have a Material Adverse
Effect.
(aa)
The Company and each of its subsidiaries have such permits,
licenses, patents, franchises, certificates of need and other
approvals or authorizations of such Governmental Authorities
(“ Permits
”) as are
necessary under applicable law to own their properties and conduct
their businesses in the manner described in the Pricing Disclosure
Package and the Offering Memorandum, except for any of the
foregoing that would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect or except as described in the
Pricing Disclosure Package and the Offering Memorandum; each of the
Company and its subsidiaries has fulfilled and performed all of its
obligations with respect to the Permits, and no event has occurred
that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other
impairment of the rights of the holder or any such Permits, except
for any of the foregoing that would not reasonably be expected to
have a Material Adverse Effect or except as described in the
Pricing Disclosure Package.
(bb)
The Company and each of its subsidiaries own or possess adequate
rights to use all patents, patent applications, inventions,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses, know-how,
software, systems and technology (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) or other intellectual property,
including, without limitation, all of the intellectual property
described in the Pricing Disclosure Package and the Offering
Memorandum as being owned or licensed by the Company and its
subsidiaries (collectively, “ Intellectual Property ”), necessary for the
conduct of their respective businesses, except where the failure to
own or possess such Intellectual Property would not, individually
or in the aggregate, have a Material Adverse Effect. The
Company and its subsidiaries have no reason to believe that the
conduct of their respective businesses will conflict with, and have
not received any notice of any claim of conflict with, any such
rights of others, except where such conflict or claims of conflict
would not, individually or in the aggregate, have a Material
Adverse Effect. Except as disclosed in the Pricing Disclosure
Package and the Offering Memorandum, (A) there is no infringement,
misappropriation or violation by third parties of any such
Intellectual Property, except as such infringement,
misappropriation or violation would not result in a Material
Adverse Effect; (B) there is no pending or, to the knowledge of the
Company and its subsidiaries, threatened action, suit, proceeding
or claim by others challenging the rights of the Company and its
subsidiaries in or to any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim which would have a Material Adverse Effect; (C)
the Intellectual Property owned by the Company and its subsidiaries
and, to the knowledge of the Company, the Intellectual Property
licensed to the Company and its subsidiaries has not been adjudged
invalid or unenforceable, in whole or in part, and there is no
pending or threatened in writing action, suit, proceeding or claim
by others challenging the validity or scope of any such
Intellectual Property,
10
and the Company
is unaware of any facts which would form a reasonable basis for any
such claim which would have a Material Adverse Effect;
(D) there is no pending or threatened action, suit, proceeding
or claim by others that the Company or its subsidiaries infringe,
misappropriate or otherwise violate any Intellectual Property or
other proprietary rights of others, the Company and its
subsidiaries have not received any written notice of such claim and
the Company is unaware of any other facts which would form a
reasonable basis for any such claim which would have a Material
Adverse Effect; and (E) to the Company’s knowledge, no
employee of the Company or a subsidiary of the Company is in or has
ever been in violation of any term of any employment contract,
patent disclosure agreement, invention assignment agreement,
non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such
employee’s employment with the Company or a subsidiary of the
Company, or actions undertaken by the employee while employed with
the Company or a subsidiary of the Company, except for such
violations as would not have a Material Adverse Effect. To
the Company’s knowledge, all material technical information
developed by and belonging to the Company and its subsidiaries
which has not been patented has been kept confidential, except as
would not have a Material Adverse Effect. The Company is not
a party to or bound by any options, licenses or agreements with
respect to the Intellectual Property that would be required to be
described in a registration statement filed under the Securities
Act or would be required to be filed as exhibits to a registration
statement of the Company pursuant to Item 601(10) of Regulation S-K
that have not been described or incorporated by reference in the
Pricing Disclosure Package and the Offering Memorandum.
(cc)
Except as described in the Pricing Disclosure Package and the
Offering Memorandum, the Company and each of its subsidiaries:
(A) are and at all times have been in full compliance with all
statutes, rules, regulations, or guidances applicable to the
ownership, testing, development, manufacture, packaging,
processing, use, distribution, marketing, labeling, promotion,
sale, offer for sale, storage, import, export or disposal of any
product or product candidate manufactured or distributed by the
Company and its subsidiaries (“ Applicable Laws ”); (B) have not
received any U.S. Food and Drug Administration (“
FDA ”) Form 483, notice of
adverse finding, warning letter, untitled letter or other
correspondence or notice from the FDA or any other Governmental
Authority alleging or asserting noncompliance with any Applicable
Laws or any licenses, certificates, approvals, clearances,
authorizations, permits and supplements or amendments thereto
required by any such Applicable Laws (“ Authorizations ”); (C) possess
all Authorizations and such Authorizations are valid and in full
force and effect and are not in violation of any term of any such
Authorizations; (D) have not received written notice of any
claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any Governmental
Authority or third party alleging that any product operation or
activity is in violation of any Applicable Laws or Authorizations
and have no knowledge that any such Governmental Authority or third
party is considering any such claim, litigation, arbitration,
action, suit, investigation or proceeding; (E) have not
received notice that any Governmental Authority has taken, is
taking or intends to take action to limit, suspend, modify or
revoke any Authorizations and have no knowledge that any such
Governmental Authority is considering such action; (F) have
filed, obtained, maintained or submitted all reports, documents,
forms, notices, applications, records, claims, submissions and
supplements or amendments as required by any Applicable Laws or
Authorizations and represent that all such reports, documents,
forms, notices, applications, records, claims, submissions and
supplements or
11
amendments were
complete and correct on the date filed (or were corrected or
supplemented by a subsequent submission), except where the failure
to so file, obtain, maintain or submit would not reasonably be
expected to have a Material Adverse Effect; and (G) have not,
either voluntarily or involuntarily, initiated, conducted, or
issued or caused to be initiated, conducted or issued, any recall,
market withdrawal or replacement, safety alert, post-sale warning,
“dear doctor” letter, or other notice or action
relating to the alleged lack of safety or efficacy of any of its
product or any alleged product defect or violation and, to the
Company’s knowledge, no third party has initiated, conducted
or intends to initiate any such notice or action.
(dd)
The studies, tests and preclinical and clinical trials conducted by
or on behalf of the Company and each of its subsidiaries were and,
if still pending, are being conducted in accordance with
experimental protocols, procedures and controls pursuant to
accepted professional scientific standards and all Applicable Laws
and Authorizations, including, without limitation, the Federal
Food, Drug and Cosmetic Act and the rules and regulations
promulgated thereunder; the descriptions of the results of such
studies, tests and trials contained in the Pricing Disclosure
Package and the Offering Memorandum are accurate and complete in
all material respects and fairly present the data derived from such
studies, tests and trials; except to the extent disclosed in the
Pricing Disclosure Package and the Offering Memorandum, the Company
is not aware of any studies, tests or trials, the results of which
the Company believes reasonably refute the study, test, or trial
results described or referred to in the Pricing Disclosure Package
and the Offering Memorandum when viewed in the context in which
such results are described and the clinical state of development;
and the Company and its subsidiaries have not received any notices
or correspondence from any Governmental Authority requiring the
termination, suspension or material modification of any studies,
tests or preclinical or clinical trials conducted by or on behalf
of the Company or its subsidiaries. All of the descriptions
in the Pricing Disclosure Package and the Offering Memorandum of
the legal and governmental procedures and requirements of the FDA
or any foreign, state or local governmental body exercising
comparable authority are accurate in all material
respects.
(ee)
Except as described in the Pricing Disclosure Package and the
Offering Memorandum, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party
or of which any property or assets of the Company or any of its
subsidiaries is the subject that would, in the aggregate,
reasonably be expected to have a Material Adverse Effect or to have
a material adverse effect on the performance by the Company of the
performance of this Agreement, the Indenture, the Securities or the
Registration Rights Agreement or the consummation of any of the
transactions contemplated hereby; and to the Company’s
knowledge, no such proceedings are threatened in writing or
contemplated by Governmental Authorities or others.
(ff)
There are no legal or governmental proceedings or contracts or
other documents that would be required to be described in a
registration statement filed under the Securities Act or, in the
case of documents, would be required to be filed as exhibits to a
registration statement of the Company pursuant to Item 601(10) of
Regulation S-K that have not been described or incorporated by
reference in the Pricing Disclosure Package and the Offering
Memorandum. Neither the Company nor any of its subsidiaries
has knowledge that any other party to any such contract, agreement
or arrangement has any intention not to render full performance as
contemplated by the terms thereof; and that statements made or
incorporated by
12
reference in the
Pricing Disclosure Package and the Offering Memorandum insofar as
they purport to constitute summaries of the terms of statutes,
rules or regulations, legal or governmental proceedings or
contracts and other documents, constitute accurate summaries of the
terms of such statutes, rules and regulations, legal and
governmental proceedings and contracts and other documents in all
material respects.
(gg)
No relationship, direct or indirect, that would be required to be
described in a registration statement of the Company pursuant to
Item 404 of Regulation S-K, exists between or among the Company, on
the one hand, and the directors, officers, stockholders, customers
or suppliers of the Company, on the other hand, that has not been
described in the Pricing Disclosure Package and the Offering
Memorandum.
(hh)
Except as described in the Pricing Disclosure Package and the
Offering Memorandum, no labor disturbance by the employees of the
Company or any of its subsidiaries exists or, to the knowledge of
the Company, is imminent that would reasonably be expected to have
a Material Adverse Effect.
(ii)
(i) Each “employee benefit plan” (within the meaning of
Section 3(3) of the Employee Retirement Security Act of 1974, as
amended (“ ERISA
”)) for
which the Company or any member of its “Controlled
Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of Section 414
of the Internal Revenue Code of 1986, as amended (the
“ Code
”)) would
have any liability (each a “ Plan ”) has been maintained
in material compliance with its terms and with the requirements of
all applicable statutes, rules and regulations including ERISA and
the Code; (ii) with respect to each Plan subject to Title IV of
ERISA (a) no “reportable event” (within the meaning of
Section 4043(c) of ERISA) has occurred or is reasonably expected to
occur, (b) no “accumulated funding deficiency” (within
the meaning of Section 302 of ERISA or Section 412 of the Code),
whether or not waived, has occurred or is reasonably expected to
occur, (c) the fair market value of the assets under each Plan
exceeds the present value of all benefits accrued under such Plan
(determined based on those assumptions used to fund such Plan) and
(d) neither the Company or any member of its Controlled Group has
incurred, or reasonably expects to incur, any liability under Title
IV of ERISA (other than contributions to the Plan or premiums to
the Pension Benefit Guaranty Corporation in the ordinary course and
without default) in respect of a Plan (including a
“multiemployer plan,” within the meaning of Section
4001(c)(3) of ERISA); and (iii) each Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(jj)
The Company and each of its subsidiaries have filed all federal,
state, local and foreign income and franchise tax returns required
to be filed through the date hereof, subject to permitted
extensions, and have paid all taxes due thereon, and no material
tax deficiency has been determined adversely to the Company or any
of its subsidiaries, nor does the Company have any knowledge of any
tax deficiencies that would, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(kk)
There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in
13
connection with
the execution and delivery of this Agreement or the issuance by the
Company or sale by the Company of the Securities.
(ll)
Since the date as of which information is given in the Pricing
Disclosure Package and except as otherwise described in the Pricing
Disclosure Package and the Offering Memorandum, the Company has not
(i) issued or granted any securities, (ii) incurred any liability
or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business,
(iii) entered into any material transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its
capital stock.
(mm)
The Company and each of its subsidiaries (i) make and keep accurate
books and records and (ii) maintain and have maintained effective
internal control over financial reporting as defined in Rule 13a-5
under the Exchange Act and a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions
are executed in accordance with management’s general or
specific authorization, (B) transactions are recorded as necessary
to permit preparation of its financial statements in conformity
with accounting principles generally accepted in the United States
and to maintain accountability for its assets, (C) access to its
assets is permitted only in accord
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