<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 17, 1997
REGISTRATION STATEMENT NOS. 333-35833 & 333-35839
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
AMENDMENT NO. 1
TO
FORM F-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------------------
INTELLIGENT POLYMERS LIMITED
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
BERMUDA 2834
(State or other jurisdiction of (Primary Standard Industrial Classification
incorporation Code Number)
or organization)
<CAPTION>
BERMUDA NOT APPLICABLE
incorporation
or organization)
<CAPTION>
(State or other jurisdiction of (I.R.S. Employer Identification No.)
</TABLE>
CONYERS DILL & PEARMAN
CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON HM 11, BERMUDA
ATTENTION: DAVID J. DOYLE, (441) 295-1422
(Address and telephone number of Registrant's principal executive offices)
CT CORPORATION SYSTEM
1633 BROADWAY, NEW YORK, NEW YORK 10015 (212) 664-1666
(Name, address and telephone number of agent for service)
------------------------------------
AMENDMENT NO. 1
TO
FORM F-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------------------
BIOVAIL CORPORATION INTERNATIONAL
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
ONTARIO, CANADA
(State or other jurisdiction of incorporation or organization)
<CAPTION>
ONTARIO, CANADA NOT APPLICABLE
<CAPTION>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
BIOVAIL CORPORATION INTERNATIONAL
2488 DUNWIN DRIVE, MISSISSAUGA, ONTARIO, CANADA L5L 1J9
ATTN: ROBERT A. PODRUZNY (416) 285-6000
(Address and telephone number of Registrant's principal executive offices)
CT CORPORATION SYSTEM
1633 BROADWAY, NEW YORK, NEW YORK 10015 (212) 664-1666
(Name, address and telephone number of agent for service)
------------------------------------
COPIES TO:
<TABLE>
<S> <C>
BRUCE D. BRYDON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BIOVAIL CORPORATION INTERNATIONAL
2488 DUNWIN DRIVE, MISSISSAUGA, ONTARIO, CANADA L5L 1J9
ROGER ANDRUS, ESQ.
CAHILL GORDON & REINDEL
80 PINE STREET, NEW YORK, NEW YORK 10005
(212) 701-3000
<CAPTION>
BRUCE D. BRYDON DAVID J. DOYLE
BIOVAIL CORPORATION INTERNATIONAL INTELLIGENT POLYMERS LIMITED
2488 DUNWIN DRIVE, MISSISSAUGA, ONTARIO, CANADA L5L 1J9 CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON HM 11, BERMUDA
ROGER ANDRUS, ESQ. MARK KESSEL, ESQ.
CAHILL GORDON & REINDEL BRICE T. VORAN, ESQ.
80 PINE STREET, NEW YORK, NEW YORK 10005 SHEARMAN & STERLING
(212) 701-3000 599 LEXINGTON AVENUE, NEW YORK, NEW YORK 10022
(212) 848-4000
<CAPTION>
PRESIDENT AND CHIEF EXECUTIVE OFFICER COMMON DIRECTOR/SECRETARY
</TABLE>
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13 (FORM F-1)/ITEM 14 (FORM F-3).* OTHER EXPENSES OF ISSUANCE AND
DISTRIBUTION
The following table sets forth the costs and expenses payable by
Intelligent Polymers in connection with the sale of Units being registered (all
amounts are estimated except the SEC Registration Fee and the American Stock
Exchange Listing Application Fee):
<TABLE>
<S> <C>
SEC Registration Fee.................................................... $ 66,891
Listing Application Fee................................................. 16,750
Blue Sky Qualification Fees and Expenses................................ 12,500
Accounting Fees......................................................... 100,000
Legal Fees and Expenses................................................. 625,000
NASD Filing Fee......................................................... 22,574
Printing and Engraving.................................................. 160,000
Miscellaneous........................................................... 36,285
----------
Total................................................................... $1,040,000
==========
</TABLE>
- ------------------------------
* Pursuant to the Services Agreement, Biovail and Intelligent Polymers have
agreed that Intelligent Polymers will pay all expenses associated with the
issuance and distribution of the Units.
ITEM 14 (FORM F-1)/ITEM 15 (FORM F-3). INDEMNIFICATION OF DIRECTORS AND
OFFICERS
Except as hereinafter set forth, there is no charter provision, by-law,
contract, arrangement or statute under which any director or officer of either
of the Registrants is insured or indemnified in any manner against any liability
which he may incur in his capacity as such.
With respect to Intelligent Polymers:
Intelligent Polymers' Bye-Laws provide that Intelligent Polymers shall
indemnify out of the funds of Intelligent Polymers, except as set forth below,
every director and officer of Intelligent Polymers and every member of a
committee of the Board of Directors of Intelligent Polymers, against all civil
liabilities, loss, damage or expense (including but not limited to liabilities
under contract, tort and statute or any applicable foreign law or regulation and
all reasonable legal and other costs and expenses properly payable) incurred or
suffered by him as such director, officer or committee member and any person
acting as a director, officer or committee member in the reasonable belief that
he has been so appointed or elected notwithstanding any defect in such
appointment or election provided always that the indemnity contained by the
Bye-Laws shall not extend to any matter in respect of any fraud or dishonesty
which may attach to any of the foregoing persons. To the extent that any
director, officer or member of a committee duly constituted under the Bye-Laws
is entitled to claim an indemnity pursuant to the Bye-Laws in respect of amounts
paid or discharged by him, the relative indemnity shall take effect as an
obligation of Intelligent Polymers to reimburse the person making such payment
or effecting such discharge. No director, secretary or other duly appointed
officer of Intelligent Polymers shall be personally liable to Intelligent
Polymers or its shareholders for monetary damages in respect of the exercise or
non-exercise of any power or duty vested in such director, secretary or officer,
provided, however, the foregoing shall not extend to any matter in respect of
any fraud or dishonesty which may attach to any of the foregoing persons.
Expenses incurred in defending a civil or criminal action, suit or proceeding
shall be paid by Intelligent Polymers in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors of
Intelligent Polymers upon receipt of an undertaking by or on behalf of a
director, officer, liquidator or trustee to repay such amount, unless it shall
be ultimately determined that he is entitled to be indemnified by Intelligent
Polymers as authorized in the Bye-Laws or otherwise pursuant to applicable laws.
II-1
<PAGE> 3
With respect to Biovail:
Section 6.04 of By-Law No. 1 of Biovail provides as follows:
Subject to the limitations contained in statutory law, Biovail shall
indemnify a director or officer, a former director or officer, or a person who
acts or acted at Biovail's request as a director or officer of a body corporate
of which Biovail is or was a shareholder or creditor, and his heirs and legal
representatives, against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, reasonably incurred by him in
respect of any civil, criminal or administrative action or proceeding to which
he is made a party by reason of being or having been a director or officer of
Biovail or such body corporate, if
(a) he acted honestly and in good faith with a view to the best
interest of Biovail; and
(b) in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
Biovail shall also indemnify such person in such other circumstances as
statutory law permits or requires.
ITEM 15 (FORM F-1). RECENT SALES OF UNREGISTERED SECURITIES
On July 30, 1997 Intelligent Polymers sold 12,000 Special Shares to Biovail
for an aggregate cash purchase price of $12,000. The Special Shares were issued
without registration under the Securities Act of 1933, as amended, in reliance
upon the exemption provided by Section 4(2) of the Act. No underwriting
commissions were paid in connection with such issuance.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ ------------------------------------------------------------------------------
<C> <C> <S>
1.1 -- Form of Underwriting Agreement
2.9** -- Amalgamation Agreement between Trimel Corporation and Biovail Corporation
International dated January 12, 1994
3.1 -- Memorandum of Association of Intelligent Polymers
3.2 -- Bye-Laws of Intelligent Polymers
4.1 -- Purchase Option (included in Exhibit 3.2)
4.2 -- Form of Warrant Agreement
4.3 -- Form of Warrant (included in Exhibit 4.2)
4.4 -- Form of Unit Certificate
4.5+ -- Specimen Stock Certificate for Biovail Common Shares
4.6 -- Specimen Stock Certificate for Intelligent Polymers Common Shares (included in
Exhibit 4.4)
4.7 -- Specimen Stock Certificate for Intelligent Polymers Special Shares
5.1 -- Form of Opinion of Kenneth C. Cancellara as to legality of underlying Biovail
Common Shares, including consent
5.2 -- Form of Opinion of Conyers Dill & Pearman as to legality of Intelligent
Polymers Common Shares, including consent
8.1 -- Form of Opinion of Cahill Gordon & Reindel as to U.S. tax matters, including
consent
8.2 -- Form of Opinion of Cassels Brock & Blackwell as to Canadian tax matters,
including consent
8.3 -- Form of Opinion of Conyers Dill & Pearman as to Bermuda tax matters, including
consent
10.1 -- Form of Development and License Agreement
10.2 -- Form of Services Agreement
21.1 -- List of Subsidiaries of Biovail
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ ------------------------------------------------------------------------------
<C> <C> <S>
23.1 -- Consent of Cahill Gordon & Reindel (included in Exhibit 8.1)
23.2 -- Consent of Cassels Brock & Blackwell (included in Exhibit 8.2)
23.3 -- Consent of Conyers Dill & Pearman (included in Exhibit 5.2 and Exhibit 8.3)
23.4 -- Consent of Kenneth C. Cancellara (included in Exhibit 5.1)
23.5 -- Consent of Deloitte & Touche, independent Chartered Accountants, regarding
Intelligent Polymers Balance Sheet and Biovail Consolidated Financial
Statements
24.1* -- Powers of Attorney
</TABLE>
- ------------------------------
* Previously filed.
** Incorporated by reference to Registrant's registration statement on Form F-4,
Registration Statement No. 33-74120.
+ Incorporated by reference to Biovail's registration statement on Form F-4,
Registration Statement No. 33-74120.
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(1) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under item 14
above, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(2) For the purpose of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(3) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(4) For purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Intelligent Polymers hereby undertakes to provide to the Underwriters at
the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Mississauga, Canada, on October 6, 1997.
BIOVAIL CORPORATION INTERNATIONAL
By: /s/ KENNETH C. CANCELLARA
------------------------------------
(Kenneth C. Cancellara)
Senior Vice President, General
Counsel,
Secretary and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on behalf of Biovail Corporation
International by the following persons in the capacities and on the dates
indicated
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------- -----
<C> <S>
* Chairman of the Board of Directors
- -----------------------------------------
Eugene N. Melnyk
* President, Chief Executive Officer and Director
- ----------------------------------------- (Principal Executive Officer)
Bruce D. Brydon
* Senior Vice President,
- ----------------------------------------- Corporate and Strategic
Rolf K. Reininghaus Development and Director
* Senior Vice President,
- ----------------------------------------- Chief Operating Officer and
Mahmood Khan Director
* Senior Vice President, General Counsel, Secretary
- ----------------------------------------- and Director
Kenneth C. Cancellara
* Vice President Finance,
- ----------------------------------------- Chief Financial Officer and
Robert A. Podruzny Director (Principal Financial
and Accounting Officer)
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------- -----
<C> <S>
* Director
- -----------------------------------------
Wilfred G. Bristow
* Director
- -----------------------------------------
Roger Rowan
* Director
- -----------------------------------------
Robert Vujea
Authorized Representative in the U.S.
*
- -----------------------------------------
Biovail Americas Corp.
*By: /s/ KENNETH C. CANCELLARA October 6, 1997
- -----------------------------------------
(Kenneth C. Cancellara)
Attorney-in-fact
</TABLE>
II-5
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that is has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Mississauga, Ontario on October 6, 1997.
INTELLIGENT POLYMERS LIMITED
By: /s/ KENNETH C. CANCELLARA
------------------------------------
(Kenneth C. Cancellara)
Authorized Signatory
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on behalf of Intelligent Polymers Limited
by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- -----
<C> <S>
* Chairman/Chief Executive Officer (Principal
- ---------------------------------------- Executive, Financial and Accounting Officer)
Eugene N. Melnyk
* Special Director
- ----------------------------------------
Robert A. Podruzny
* Common Director, Secretary
- ----------------------------------------
David J. Doyle
Authorized Representative in the U.S.
*
- ----------------------------------------
Biovail Americas Corp.
*By: /s/ KENNETH C. CANCELLARA October 6, 1997
- ----------------------------------------
(Kenneth C. Cancellara)
Attorney-in-fact
</TABLE>
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ ---------------------------------------------------------------------
<C> <C> <S> <C>
1.1 -- Form of Underwriting Agreement
2.9** -- Amalgamation Agreement between Trimel Corporation and Biovail
Corporation International dated January 12, 1994
3.1 -- Memorandum of Association of Intelligent Polymers
3.2 -- Bye-Laws of Intelligent Polymers
4.1 -- Purchase Option (included in Exhibit 3.2)
4.2 -- Form of Warrant Agreement
4.3 -- Form of Warrant (included in Exhibit 4.2)
4.4 -- Form of Unit Certificate
4.5+ -- Specimen Stock Certificate for Biovail Common Shares
4.6 -- Specimen Stock Certificate for Intelligent Polymers Common Shares
(included in Exhibit 4.4)
4.7 -- Specimen Stock Certificate for Intelligent Polymers Special Shares
5.1 -- Form of Opinion of Kenneth C. Cancellara as to legality of underlying
Biovail Common Shares, including consent
5.2 -- Form of Opinion of Conyers Dill & Pearman as to legality of
Intelligent Polymers Common Shares, including consent
8.1 -- Form of Opinion of Cahill Gordon & Reindel as to U.S. tax matters,
including consent
8.2 -- Form of Opinion of Cassels Brock & Blackwell as to Canadian tax
matters, including consent
8.3 -- Form of Opinion of Conyers Dill & Pearman as to Bermuda tax matters,
including consent
10.1 -- Form of Development and License Agreement
10.2 -- Form of Services Agreement
21.1 -- List of Subsidiaries of Biovail
23.1 -- Consent of Cahill Gordon & Reindel (included in Exhibit 8.1)
23.2 -- Consent of Cassels Brock & Blackwell (included in Exhibit 8.2)
23.3 -- Consent of Conyers Dill & Pearman (included in Exhibit 5.2 and
Exhibit 8.3)
23.4 -- Consent of Kenneth C. Cancellara (included in Exhibit 5.1)
23.5 -- Consent of Deloitte & Touche, independent Chartered Accountants,
regarding Intelligent Polymers Balance Sheet and Biovail Consolidated
Financial Statements
24.1* -- Powers of Attorney
</TABLE>
- ------------------------------
* Previously filed.
** Incorporated by reference to Registrant's registration statement on Form F-4,
Registration Statement No. 33-74120.
+ Incorporated by reference to Biovail's registration statement on Form F-4,
Registration Statement No. 33-74120.
<PAGE> 1
EXHIBIT 1.1
S&S Draft
August 13, 1997
__________ Units
INTELLIGENT POLYMERS LIMITED
BIOVAIL CORPORATION INTERNATIONAL
Each Unit Consisting of
One Common Share, par value $.01 per share of Intelligent Polymers Limited
and _________ of a Warrant to Purchase
One Common Share, no par value, of Biovail Corporation International
October , 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
DILLON, READ & CO. INC.
LAZARD FRERES & CO.
As representatives of the
several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10122
Dear Sirs:
Intelligent Polymers Limited, a Bermuda exempted company ("INTELLIGENT
POLYMERS"), and Biovail Corporation International, a public company
incorporated under the laws of Ontario, Canada ("BIOVAIL" and, together with
Intelligent Polymers, the "COMPANIES"), confirm their respective agreements
with the several underwriters named in Schedule I hereto (the "UNDERWRITERS"),
with respect to (i) the sale by the Companies, and the purchase by the
Underwriters, of ____ units (the "FIRM UNITS"), each composed of one common
share, par value $.01 per share, of Intelligent Polymers ("INTELLIGENT POLYMERS
COMMON SHARES") and ________ of a warrant (the "WARRANTS") to purchase one
authorized but unissued common share, no par value, of Biovail ("BIOVAIL COMMON
SHARES"), exercisable at any time from
<PAGE> 2
2
October 1, 1999 through September 30, 2002 at an exercise price of $___ per
Biovail Common Shares (subject to certain adjustments as set forth in the
Warrant certificate to be issued as part of the Unit Certificate (as
hereinafter defined)) and (ii) the grant by the Companies to the Underwriters
of the option described in Section 2 hereof to purchase all or any part of
____________________ additional units (the "ADDITIONAL UNITS" and together with
the Firm Units, the "UNITS") to cover over-allotments, if any. The Intelligent
Polymers Common Shares and the Warrants will be paired for sale as units by
Intelligent Polymers and Biovail and then sold to the Underwriters.
Each Unit will initially be represented by a certificate representing one
or more Intelligent Polymers Common Shares and one or more Warrants (a "UNIT
CERTIFICATE"). Each Unit will be transferable only as a whole and as described
in the Prospectus (as hereinafter defined) through September 30, 1999, or such
earlier date on which the PURCHASE OPTION (as defined in the Prospectus) is
exercised or expires unexercised, after which date the Warrants and the
Intelligent Polymers Common Shares will trade separately. The Intelligent
Polymers Common Shares, the Warrants, the Biovail Common Shares and the Units
are more fully described in the Registration Statement (as hereinafter defined)
and the Prospectus.
SECTION 1. Registration Statement and Prospectus. The Companies have
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the Securities Act of 1933, as amended and the
rules and regulations of the Commission thereunder (the "ACT"), a combined
registration statement (Nos. ________________ and ______ _____________)
including the related prospectus, (a) with respect to Intelligent Polymers, on
Form F-1, relating to the Intelligent Polymers Common Shares comprising a
portion of the Units, and (b) with respect to Biovail, on Form F-3, relating to
the Warrants comprising a portion of the Units. The registration statement, as
amended at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act, is hereinafter referred to as the
"REGISTRATION STATEMENT"; and the prospectus in the form first used to confirm
sales of the Units is hereinafter referred to as the "PROSPECTUS" (including in
the case of all references to the Registration Statement or the Prospectus,
documents incorporated therein by reference). If the Companies have filed or
are required pursuant to the terms hereof to file a registration statement
pursuant to Rule 462(b) under the Act registering additional units (a "RULE
462(b) REGISTRATION STATEMENT"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to
include such Rule 462(b) Registration Statement.
The terms "SUPPLEMENT" and "AMENDMENT" or "AMEND" as used in this
Agreement with respect to the Registration Statement or the Prospectus shall
include all documents subsequently filed by the Companies with the Commission
pursuant to the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission
<PAGE> 3
3
thereunder (collectively, the "EXCHANGE ACT") that are deemed to be
incorporated by reference in the Prospectus.
SECTION 2 . Agreements to Sell and Purchase and Lock-Up Agreements. On
the basis of the representations and warranties contained in this Agreement,
and subject to its terms and conditions, the Companies agree to issue and sell,
and each Underwriter agrees, severally and not jointly, to purchase from the
Companies at a price per Unit of $______ (the "PURCHASE PRICE") the number of
Firm Units set forth opposite the name of such Underwriter in Schedule I
hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Companies agree to
issue and sell the Additional Units and the Underwriters shall have the right
to purchase, severally and not jointly, up to _______ Additional Units from the
Companies at the Purchase Price. Additional Units may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Units. The Underwriters may exercise their right to purchase
Additional Units in whole or in part from time to time by giving written notice
thereof to the Companies within 30 days after the date of this Agreement. You
shall give any such notice on behalf of the Underwriters and such notice shall
specify the aggregate number of Additional Units to be purchased pursuant to
such exercise and the date for payment and delivery thereof, which date shall
be a business day (i) no earlier than two business days after such notice has
been given (and, in any event, no earlier than the Closing Date (as hereinafter
defined)) and (ii) no later than ten business days after such notice has been
given. If any Additional Units are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Companies the number of
Additional Units (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Units to be purchased from the Companies as the number of Firm Units
set forth opposite the name of such Underwriter in Schedule I bears to the
total number of Firm Units.
Each of Biovail and Intelligent Polymers hereby agree not to (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
Biovail Common Shares, Intelligent Polymers Common Shares or SPECIAL SHARES (as
defined in the Prospectus) or any securities convertible into or exercisable or
exchangeable for such shares or (ii) enter into any swap or other arrangement
that transfers all or a portion of the economic consequences associated with
the ownership of any Biovail Common Shares, Intelligent Polymers Common Shares
or Special Shares (regardless of whether any of the transactions described in
clause (i) or (ii) is to be settled by the delivery of such common shares, or
such other securities, in cash or otherwise), except to the Underwriters
pursuant to this Agreement, for a period of 180 days after the date of the
Prospectus without your prior written consent. Notwithstanding the foregoing,
during such period (i) Biovail may grant stock options pursuant to Biovail's
existing stock option plan and
<PAGE> 4
4
(ii) Biovail may issue shares of Biovail Common Shares upon the exercise of an
option or warrant or the conversion of a security outstanding on the date
hereof. Each of Biovail and Intelligent Polymers also agree not to file any
registration statement with respect to any shares of Biovail Common Shares,
Intelligent Polymers Common Shares or the Special Shares or any securities
convertible into or exercisable or exchangeable for such shares for a period of
180 days after the date of the Prospectus without your prior written consent.
Each of Biovail and Intelligent Polymers shall, prior to or concurrently with
the execution of this Agreement, deliver an agreement executed by certain of
the directors and officers of Biovail and Intelligent Polymers to the effect
that such person will not, during the period commencing on the date such person
signs such agreement and ending 180 days after the date of the Prospectus,
without your prior written consent, (A) engage in any of the transactions
described in the first sentence of this paragraph or (B) make any demand for,
or exercise any right with respect to, the registration of any of Biovail
Common Shares, Intelligent Polymers Common Shares or the Special Shares or any
securities convertible into or exercisable or exchangeable for such shares.
SECTION 3. Terms of Public Offering. The Companies are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Units as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Units upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. Delivery to the Underwriters of and
payment to Intelligent Polymers for the Firm Units shall be made at 9:00 A.M.,
New York City time, on September ____, 1997 (the "CLOSING DATE") at such place
as you shall designate. The Closing Date and the location of delivery of and
payment for the Firm Units may be varied by agreement between you and the
Companies.
Delivery to the Underwriters of and payment for any Additional Units to be
purchased by the Underwriters shall be made at such place as you shall
designate at 9:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "OPTION
CLOSING DATE"). Any such Option Closing Date and the location of delivery of
and payment for such Additional Shares may be varied by agreement between you
and the Companies.
Certificates for the Units shall be registered in such names and issued in
such denominations as you shall request in writing not later than two full
business days prior to the Closing Date or an Option Closing Date, as the case
may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be.
Certificates in definitive form evidencing the Shares shall be delivered to you
on the Closing Date or the applicable Option Closing Date, as the case may be,
with any transfer taxes thereon duly paid by the Company, for the respective
accounts of the several Underwriters,
<PAGE> 5
5
against payment to the Company of the Purchase Price therefor by wire transfer
of Federal or other funds immediately available in New York City.
SECTION 5. Agreements of Biovail and Intelligent Polymers. The Companies
agree with you that:
(a) The Companies will advise you promptly and, if requested by
you, confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the Units for offering or
sale in any jurisdiction, or the initiation of any proceeding for such
purposes, (iii) when any amendment to the Registration Statement becomes
effective, (iv) if the Companies are required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, when the Rule
462(b) Registration Statement has become effective and (v) of the happening of
any event during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the Companies
will use their respective best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
(b) The Companies will furnish you four signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits and documents incorporated therein by reference,
and furnish to you and each Underwriter designated by you such number of
conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits but including documents incorporated therein
by reference, as you may reasonably request.
(c) The Companies will prepare the Prospectus, the form and
substance of which shall be satisfactory to you, and file the Prospectus in
such form with the Commission within the applicable period specified in Rule
424(b) under the Act; during the period specified in Section 5(d) below, not
file any further amendment to the Registration Statement and not make any
amendment or supplement to the Prospectus of which you shall not previously
have been advised or to which you shall reasonably object after being so
advised; and, during such period, prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the Registration
Statement or amendment or supplement to the Prospectus which may be necessary
or advisable in connection with the distribution of the Units by you, and to
use their respective best efforts to cause any such amendment to the
Registration Statement to become promptly effective.
<PAGE> 6
6
(d) The Companies will, prior to 10:00 A.M., New York City time,
on the first business day after the date of this Agreement and from time to
time thereafter for such period as in the opinion of counsel for the
Underwriters a prospectus is required by law to be delivered in connection with
sales by an Underwriter or a dealer, furnish in New York City to each
Underwriter and any dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) and any documents incorporated
therein by reference as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, the Companies will
forthwith prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.
(f) The Companies will, prior to any public offering of the Units,
cooperate with you and counsel for the Underwriters in connection with the
registration or qualification of the Units for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, continue such registration or qualification
in effect so long as required for distribution of the Units and file such
consents to service of process or other documents as may be necessary in order
to effect such registration or qualification; provided, however, that neither
of the Companies shall be required in connection therewith to qualify as a
foreign corporation in any jurisdiction in which they are not now so qualified
or to take any action that would subject it to general consent to service of
process or taxation other than as to matters and transactions relating to the
Prospectus, the Registration Statement, any preliminary prospectus or the
offering or sale of the Units, in any jurisdiction in which they are not now so
subject.
(g) The Companies will mail and make generally available to their
shareholders as soon as practicable an earnings statement covering the
twelve-month period ending September 30, 1998 that shall satisfy the provisions
of Section 11(a) of the Act, and advise you in writing when such statement has
been so made available.
(h) During the period of three years after the date of this
Agreement, the Companies will furnish to you as soon as available copies of all
reports or other communications furnished to the record holders of the Units,
the Biovail Common Shares or the Intelligent Polymer Common Shares, or
furnished to or filed with the Commission or any
<PAGE> 7
7
national securities exchange on which any class of securities of the Companies
is listed and such other publicly available information concerning Biovail and
its Subsidiaries (as hereinafter defined) or Intelligent Polymers as you may
reasonably request.
(i) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Companies will pay or
cause to be paid all expenses incident to the performance of their respective
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Companies' counsel and the Companies' accountants in connection
with the registration and delivery of the Units under the Act and all other
fees and expenses in connection with the preparation, printing, filing and
distribution of the Registration Statement (including financial statements and
exhibits), any preliminary prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and delivering of
copies thereof to the Underwriters and dealers in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Units to the Underwriters, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement and any other
agreements or documents in connection with the offering, purchase, sale or
delivery of the Units, (iv) all expenses in connection with the registration or
qualification of the Units for offer and sale under the securities or Blue Sky
laws of the several states and all costs of printing or producing any
Preliminary or Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the
Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and disbursements of counsel
for the Underwriters in connection with the review and clearance of the
offering of the Units by the National Association of Securities Dealers, Inc.,
(vi) all fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Units and all costs and
expenses incident to the listing of the Units on American Stock Exchange, (vii)
the cost of printing certificates representing the Units, (viii) the costs and
charges of any transfer agent, registrar and/or depositary, and (ix) all other
costs and expenses incident to the performance of the obligations of the
Companies hereunder for which provision is not otherwise made in this Section.
(j) The Companies will use their respective best efforts to list
for quotation the Units on American Stock Exchange and to maintain the listing
of the Units on American Stock Exchange until the SEPARATION DATE (as such term
is defined in the Prospectus) and to list the Intelligent Polymers Common
Shares on the American Stock Exchange after such date. The Companies will also
use their respective best efforts to arrange for the Warrants to be listed on
the New York Stock Exchange after the Separation Date.
(k) The Companies will use their respective best efforts to do and
perform all things required or necessary to be done and performed under this
Agreement by the Companies prior to the Closing Date or any Option Closing
Date, as the case may be, and to satisfy all conditions precedent to the
delivery of the Units.
<PAGE> 8
8
(l) If the Registration Statement at the time of the effectiveness
of this Agreement does not cover all of the Units, the Companies will file a
Rule 462(b) Registration Statement with the Commission registering the Units
not so covered in compliance with Rule 462(b) by 10:00 P.M., New York City
time, on the date of this Agreement and pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing thereof
or to give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Act.
(m) Intelligent Polymers will, at the end of each of its taxable
years, use its best efforts to determine whether it qualifies as a Passive
Foreign Investment Company ("PFIC") under the applicable provisions of the
Internal Revenue Code (the "CODE"). In each year that Intelligent Polymers
determines that it qualifies as a PFIC, Intelligent Polymers will supply a
PFIC annual information statement (as such statement is described in the
Prospectus) to every Intelligent Polymers' shareholder of record for such year.
(n) Intelligent Polymers will use the net proceeds received by it
from the sale of the Units in the manner specified in the Prospectus under "Use
of Proceeds".
(o) [After the Closing Date but no later than October 1, 1999,
Biovail shall file a registration statement covering the Biovail Common Shares
issuable upon exercise of the Warrants and cause such registration statement to
be declared effective by the Commission. Biovail shall cause such registration
statement to remain effective through September 30, 2002 or until all Warrants
have been exercised.]
SECTION 6. Representations and Warranties of the Companies. The
Companies jointly and severally represent and warrant to each Underwriter that:
(a) The Registration Statement has become effective (other than any Rule
462(b) Registration Statement to be filed by the Companies after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Companies after the effectiveness of this
Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any 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, (ii) each document, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the Exchange
Act, (iii) the Registration Statement
<PAGE> 9
9
(other than any Rule 462(b) Registration Statement to be filed by the Companies
after the effectiveness of this Agreement) and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Act, (iv) if the Companies are required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration Statement and any amendments thereto, when they become
effective (A) will not contain any 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 (B) will comply in all material respects
with the Act and (v) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter furnished
to the Companies in writing by such Underwriter through you expressly for use
therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not 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, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any
Underwriter furnished to the Companies in writing by such Underwriter through
you expressly for use therein.
(d) (1) Biovail has been duly incorporated, is validly existing as a
corporation under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties, and is duly qualified
and is in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the business,
prospects, financial condition or results of operations of Biovail.
Intelligent Polymers has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to carry on its
business as described in the Prospectus and to own, lease and operate its
properties, and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations Intelligent
Polymers.
<PAGE> 10
10
(2) Biovail's only direct or indirect Subsidiaries are: Crystaal
Corporation, Biovail SA, Trimel Holding Corporation, Biovail Americas Corp.,
Biovail Laboratories Inc., Biovail Laboratories PR, Biovail UK [others]
(collectively, the "SUBSIDIARIES" and individually a "SUBSIDIARY").
Intelligent Polymers has no subsidiaries. Each Subsidiary is a corporation
duly organized, validly existing and, to the extent required under applicable
law, in good standing under the laws of the jurisdiction of its incorporation
with corporate power and corporate authority under such laws to own, lease and
operate its properties and conduct its business; and each Subsidiary is duly
qualified to transact business as a foreign corporation and is in good standing
in each other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a material adverse effect on Biovail and any of its
Subsidiaries, considered as one enterprise.
(e) The authorized, issued and outstanding capital stock and the debt of
each of Biovail and Intelligent Polymers was at the date indicated as set forth
in the Prospectus under the captions "Biovail Capitalization" and "Intelligent
Polymers Capitalization," respectively, and the authorized capital stock of
Biovail and Intelligent Polymers conforms in all material respects to the
descriptions thereof contained or incorporated by reference in the Registration
Statement. There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued
by Biovail or any of its Subsidiaries, or Intelligent Polymers, as the case may
be, relating to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of Biovail or any of its Subsidiaries, or
Intelligent Polymers, as the case may be, except as otherwise disclosed in the
Registration Statement.
(f) The Intelligent Polymers Common Shares to be issued by Intelligent
Polymers as a component of the Units have been duly authorized and, when issued
and paid for, will be validly issued, fully paid and non-assessable; such
Intelligent Polymers Common Shares are not subject to any preemptive or similar
rights; and all corporate action required to be taken for the authorization,
issue and sale of such Intelligent Polymers Common Shares has been validly and
sufficiently taken. All of the outstanding Biovail common shares have been
duly authorized and validly issued and are fully paid and non-assessable; such
shares are not subject to any preemptive or similar rights and all corporate
action required to be taken for the authorization and issue of such shares, has
been validly and sufficiently taken.
(g) All of the outstanding shares of capital stock of each of Biovail's
Subsidiaries have been duly authorized and validly issued and are fully paid
and non-assessable, and are owned by Biovail, directly or indirectly through
one or more Subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
<PAGE> 11
11
(h) (1) The Warrant Agreement (as hereinafter defined), has been duly
authorized, executed and delivered by Biovail and constitutes a valid and
binding obligation of Biovail enforceable in accordance with its terms.
(2) Upon their issuance, the Warrants will have been duly authorized by
Biovail and, when duly executed, issued and delivered by Biovail and duly
countersigned by the Warrant Agent (as hereinafter defined) in the manner
provided for in the Warrant Agreement (the "WARRANT AGREEMENT") to be entered
into between Biovail and _________ , as warrant agent (the "WARRANT AGENT"),
and when payment of the Purchase Price for the Units has been made, will
constitute valid and binding obligations of Biovail, entitled to the benefits
of the Warrant Agreement, will be enforceable in accordance with their terms
and will conform in all material respects to the description thereof contained
in the Registration Statement; such Warrants are not subject to the preemptive
or similar rights of any shareholder of Biovail; and all corporate action
required to be taken for the authorization, issue and sale of the Warrants has
been validly and sufficiently taken.
(3) The Biovail Common Shares issuable upon exercise of the Warrants have
been duly and validly reserved for such issuance and, when issued and paid for
in accordance with the terms of the Warrant Agreement, will be duly authorized,
validly issued, fully paid and non-assessable; such Biovail Common Shares are
not subject to the preemptive or similar rights of any shareholder of Biovail;
and all corporate action required to be taken for such authorization, issue and
sale of the Biovail Common Shares will have been validly and sufficiently taken
upon the issuance of the Warrants.
(4) The Units conform in all material respects to the description thereof
in the Registration Statement.
(i) Neither Biovail, any of its Subsidiaries, nor Intelligent Polymers is
in violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement or instrument
that is material to Biovail and its Subsidiaries, taken as a whole, or to
Intelligent Polymers, as the case may be, to which Biovail, any of its
Subsidiaries, or Intelligent Polymers is a party or by which Biovail, any of
its Subsidiaries or Intelligent Polymers or their respective property is bound.
(j) The execution, delivery and performance of this Agreement by Biovail
and Intelligent Polymers, and the compliance by Biovail and Intelligent
Polymers with all the provisions hereof and the consummation of the
transactions contemplated hereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of Biovail or any of its Subsidiaries,
<PAGE> 12
12
or Intelligent Polymers, or any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to Biovail and its Subsidiaries,
taken as a whole, or Intelligent Polymers, to which Biovail or any of its
Subsidiaries or Intelligent Polymers is a party or by which Biovail or any of
its Subsidiaries or Intelligent Polymers or their respective property is bound,
(iii) violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency
having jurisdiction over Biovail, any of its Subsidiaries or Intelligent
Polymers or their respective property or (iv) result in the suspension,
termination or revocation of any Authorization (as defined below) of Biovail or
any of its Subsidiaries or Intelligent Polymers or any other impairment of the
rights of the holder of any such Authorization.
(k) There are no legal or governmental proceedings pending or threatened
to which Biovail, any of its Subsidiaries or Intelligent Polymers is or could
be a party or to which any of their respective property is or could be subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described; nor are there any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required.
(l) (1) Neither Biovail, nor any of its Subsidiaries, nor Intelligent
Polymers, as the case may be, has violated any foreign, federal, state or local
law or regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS") or any provisions of the Employee
Retirement Income Security Act of 1974, as amended, or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a material adverse effect on the business,
prospects, financial condition or results of operation of Biovail and its
Subsidiaries, taken as a whole, or Intelligent Polymers.
(2) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or
any Authorization, any related constraints on operating activities and any
potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the business, prospects, financial
condition or results of operations of Biovail and its Subsidiaries, taken as a
whole, or Intelligent Polymers, as the case may be.
(m) Each of Biovail, its Subsidiaries and Intelligent Polymers, as the
case may be, has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "AUTHORIZATION") of, and has made
all filings with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals, including,
without limitation, under any applicable laws regulating pharmaceutical
products and Environmental Laws, as are necessary to own, lease, license and
operate its respective
<PAGE> 13
13
properties and to conduct its business, except where the failure to have any
such Authorization or to make any such filing or notice would not, singly or in
the aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operations of Biovail and its Subsidiaries,
taken as a whole, or Intelligent Polymers, as the case may be. Each such
Authorization is valid and in full force and effect and each of Biovail, its
Subsidiaries, and Intelligent Polymers, as the case may be, is in compliance
with all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the receipt of any
notice from any authority or governing body) which allows or, after notice or
lapse of time or both, would allow, revocation, suspension or termination of
any such Authorization or results or, after notice or lapse of time or both,
would result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to Biovail, any of its Subsidiaries, or Intelligent Polymers, as the
case may be; except where such failure to be valid and in full force and effect
or to be in compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of Biovail and its Subsidiaries, taken as a whole, or Intelligent Polymers, as
the case may be.
(n) This Agreement has been duly authorized, executed and delivered by
each of Biovail and Intelligent Polymers and constitutes a valid and binding
obligation of each of Biovail and Intelligent Polymers enforceable in
accordance with its terms. Each of the Companies has the power to submit, and
pursuant to this Agreement has legally, validly, effectively and irrevocably
submitted, to the personal jurisdiction of any federal or state court in the
State of New York, County of New York, and has the power to designate, appoint
and empower, and pursuant to this Agreement has legally, validly, effectively
and irrevocably designated, appointed and empowered, CT Corporation System
agent for service of process in any suit or proceeding based on or arising
under this Agreement in any federal or state court in the State of New York,
County of New York.
(o) Deloitte & Touche are independent public accountants with respect to
Biovail, its Subsidiaries and Intelligent Polymers, as required by the Act.
(p) (1) The consolidated financial statements of Biovail included or
incorporated by reference in the Registration Statement and the Prospectus (and
any amendment or supplement thereto) together with related schedules and notes,
present fairly the consolidated financial position, result of operations and
changes in the financial position of Biovail and its Subsidiaries on the basis
stated therein at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been prepared
in accordance with generally accepted accounting principles as applied in
Canada ("Canadian GAAP") and the financial statements of the Company have been
reconciled to generally accepted accounting principles as applied in the United
States ("U.S. GAAP") in accordance
<PAGE> 14
14
with the Act, in each case consistently applied throughout the periods
involved; the supporting schedules, if any, included in the Registration
Statement present fairly in accordance with generally accepted accounting
principles the information required to be stated therein; and the other
financial and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are, in
all material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of Biovail and its
Subsidiaries.
(2) The financial statements of Intelligent Polymers included in the
Registration Statement and the Prospectus (and any supplements or amendments
thereto), together with the related schedules and notes, present fairly the
financial position of Intelligent Polymers as of the dates indicated and for the
periods specified; such statements and related schedules and notes have been
prepared in accordance with Canadian GAAP and the financial statements of the
Company have been reconciled to U.S. GAAP in accordance with the Act, in each
case consistently applied throughout the periods involved; the supporting
schedules, if any, included in the Registration Statement present fairly in
accordance with generally accepted accounting principles the information
required to be stated therein; and the other financial and statistical
information and data set forth in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of Intelligent Polymers.
(q) Neither Biovail nor Intelligent Polymers is and, after giving effect
to the offering and sale of the Units and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(r) There are no contracts, agreements or understandings between Biovail
or Intelligent Polymers and any person granting such person the right to
require Biovail or Intelligent Polymers to file a registration statement under
the Act with respect to any securities of Biovail or Intelligent Polymers or to
require Biovail or Intelligent Polymers to include such securities with the
Units registered pursuant to the Registration Statement.
(s) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition, financial or
otherwise, or the earnings, business, management or operations of Biovail and
its Subsidiaries, taken as a whole, or of Intelligent Polymers, as the case may
be, whether or not arising in the ordinary course of business, (ii) there has
not been any material adverse change or any development involving a prospective
material adverse change in the capital stock or in
<PAGE> 15
15
the long-term debt of Biovail or any of its Subsidiaries, or Intelligent
Polymers, as the case may be, and (iii) neither Biovail nor any of its
Subsidiaries, nor Intelligent Polymers, as the case may be, has incurred any
material liability or obligation, direct or contingent.
(t) (1) Each of the DEVELOPMENT CONTRACT and the SERVICES AGREEMENT
(each as defined in the Prospectus) has been duly authorized, executed and
delivered by Intelligent Polymers and Biovail and constitutes a valid and
binding obligation of each of Intelligent Polymers and Biovail enforceable in
accordance with its terms, and conforms in all material respects to the
description thereof in the Registration Statement.
(2) No relationship, direct or indirect, exists between or among Biovail
or any of its Subsidiaries or Intelligent Polymers, as the case may be, on the
one hand, and the directors, officers, stockholders, customers or suppliers of
Biovail or any of its Subsidiaries or Intelligent Polymers, as the case may be,
on the other hand, which is required by the Act to be described in the
Registration Statement or the Prospectus which is not so described.
(u) To the best knowledge of Biovail, no labor problem exists with its
employees or with employees of any of its Subsidiaries or is imminent that
could materially adversely affect Biovail and its Subsidiaries, considered as
one enterprise.
(v) Biovail and its Subsidiaries and Intelligent Polymers, as the case
may be, own or possess, or can acquire on reasonable terms, all patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
("INTELLECTUAL PROPERTY") currently employed by them in connection with the
business now operated by them except where the failure to own or possess or
otherwise be able to acquire such intellectual property would not, singly or in
the aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operation of Biovail and its Subsidiaries,
taken as a whole or of Intelligent Polymers, as the case may be; and neither
Biovail nor any of its Subsidiaries nor Intelligent Polymers, as the case may
be, has received any notice of infringement of or conflict with asserted rights
of others with respect to any of such intellectual property which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the business, prospects, financial
condition or results of operations of Biovail and its Subsidiaries, taken as a
whole, or Intelligent Polymers, as the case may be.
(w) Each of Biovail, its Subsidiaries and Intelligent Polymers, have good
and marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of Biovail and its Subsidiaries, and Intelligent Polymers, as the case may be,
in each case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
<PAGE> 16
16
proposed to be made of such property by Biovail and its Subsidiaries, and
Intelligent Polymers, as the case may be; and any real property and buildings
held under lease by Biovail and its Subsidiaries, and Intelligent Polymers, as
the case may be, are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by Biovail and
its Subsidiaries, and Intelligent Polymers, as the case may be, in each case
except as described in the Prospectus.
(x) Biovail, each of its Subsidiaries, and Intelligent Polymers, have
filed all tax returns which are required to be filed by them pursuant to
domestic or foreign laws and have paid all taxes due pursuant to such returns
or pursuant to any assessment received by them (except where the requirement
for payment of such taxes is being contested in good faith in appropriate
proceedings). The charges, accruals and reserves on the books of Biovail and
its Subsidiaries, and Intelligent Polymers, as the case may be, in respect of
taxes or other governmental charges are, to the best knowledge of Biovail, its
Subsidiaries and Intelligent Polymers, as the case may be, after reasonable
investigation, adequate.
(y) Each certificate signed by any officer of the Companies and delivered
to the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Companies to the Underwriters as to the
matters covered thereby.
SECTION 7. Indemnification. (a) The Companies, jointly and severally,
agree to indemnify and hold harmless each Underwriter, its directors, its
officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished in writing to the Companies by such
Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Companies, their directors, their officers who sign the
Registration Statement and each person, if any, who controls the Companies
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the
<PAGE> 17
17
Companies to such Underwriter but only with reference to information relating
to such Underwriter furnished in writing to the Companies by such Underwriter
through you expressly for use in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 7(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate, but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all
indemnified parties and all such fees and expenses shall be reimbursed as they
are incurred. Such firm shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation, in the case of parties indemnified pursuant to
Section 7(a), and by the Company, in the case of parties indemnified pursuant
to Section 7(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply
with such reimbursement request. No indemnifying party shall, without the
prior written consent
<PAGE> 18
18
of the indemnified party, effect any settlement or compromise of, or consent to
the entry of judgment with respect to, any pending or threatened action in
respect of which the indemnified party is or could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Companies on the one hand and the Underwriters on the other hand from the
offering of the Units or (ii) if the allocation provided by clause 7(d)(i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 7(d)(i) above
but also the relative fault of the Companies on the one hand and the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Companies on the one hand and the Underwriters on the other
hand shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Companies, and
the total underwriting discounts and commissions received by the Underwriters,
bear to the total price to the public of the Units, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault of the
Companies on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Companies or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Companies and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 7, no
<PAGE> 19
19
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Units underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective number of Units purchased by each of the Underwriters hereunder and
not joint.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Units under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Companies contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) and, if the
Companies are required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., New York City time, on the date of this
Agreement; and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Bruce D. Brydon and Robert A. Podruzny, in their
capacities as the President and Chief Executive Offer and Vice President and
Chief Financial Officer of Biovail, confirming the matters set forth in
Sections 6(s), 8(a) and 8(b) and that Biovail has complied with all of the
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied by Biovail on or prior to the Closing Date.
(d) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Eugene N. Melnyk and Robert A. Podruzny, in their
capacities as Chairman and Chief Executive Offer and Special Director of
Intelligent Polymers, confirming the matters set
<PAGE> 20
20
forth in Sections 6(s), 8(a) and 8(b) and that Intelligent Polymers has
complied with all of the agreements and satisfied all of the conditions herein
contained and required to be complied with or satisfied by Intelligent Polymers
on or prior to the Closing Date.
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of Biovail and its Subsidiaries, taken as a
whole, or Intelligent Polymers, (ii) there shall not have been any change or
any development involving a prospective change in the capital stock or in the
long-term debt of Biovail, any of its Subsidiaries or Intelligent Polymers and
(iii) neither Biovail, nor any of its Subsidiaries nor Intelligent Polymers
shall have incurred any liability or obligation, direct or contingent, the
effect of which, in any such case described in clause 8(d)(i), 8(d)(ii) or
8(d)(iii) in your judgment, is material and adverse and, in your judgment,
makes it impracticable to market the Units on the terms and in the manner
contemplated in the Prospectus.
(f) You shall have received on the Closing Date, the following opinions:
(i) Opinion of General Counsel for Biovail and Intelligent Polymers.
At Closing time, the Underwriters shall have received the favorable opinion
dated as of Closing Time, of Kenneth Cancellara, general counsel for Biovail,
in form and substance satisfactory to counsel for the Underwriters, to the
effect set forth in Exhibit A hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(ii) Opinion of Canadian Counsel for Biovail and Intelligent
Polymers. At Closing time, the Underwriters shall have received the favorable
opinion dated as of Closing Time, of _____________, Canadian counsel for
Biovail and Intelligent Polymers, in form and substance satisfactory to counsel
for the Underwriters, to the effect set forth in Exhibit B hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(iii) Opinion of Patent Counsel for Biovail and Intelligent Polymers.
At Closing Time, the Underwriters shall have received the favorable opinion,
dated as of Closing Time, of Hughes, Etigson, patent counsel for Biovail and
Intelligent Polymers in form and substance satisfactory to counsel for the
Underwriters, to the effect set forth in Exhibit C and to such further effect
as counsel for the Underwriters may reasonable request.
(iv) Opinion of Bermuda Counsel for Intelligent Polymers. At Closing
Time, the Underwriters shall have received the favorable opinion, dated as of
Closing Time, of Conyers Dill & Pearman, Bermuda counsel for Intelligent
Polymers, in form and substance satisfactory to counsel for the Underwriters,
to the effect set forth in Exhibit D hereto and to such further effect as
counsel to the Underwriters may reasonably request.
<PAGE> 21
21
(v) Opinion of U.S. Counsel for Biovail and Intelligent Polymers. At
Closing Time, the Underwriter shall have received the favorable opinion, dated
as of Closing Time, of Cahill Gordon & Reindel, U.S. counsel for Biovail and
Intelligent Polymers, in form and substance satisfactory to counsel for the
Underwriters, to the effect set forth in Exhibit E hereto and to such further
effect as counsel to the Underwriters may reasonably request.
(vi) Opinion of U.S. FDA Counsel for Biovail and Intelligent
Polymers. At Closing Time, the Underwriters shall have received the favorable
opinion, dated as of Closing Time, of _____ U.S. FDA counsel for Biovail and
Intelligent Polymers, in form and substance satisfactory to counsel for the
Underwriters, to the effect set forth in Exhibit F hereto and to such further
effect as counsel to the Underwriters may reasonably request.
(vii) Opinion of Barbados Counsel for Biovail. At Closing time, the
Underwriters shall have received the favorable opinion dated as of Closing
Time, of _____________, Barbados counsel for Biovail, in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in
Exhibit G hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(viii) Opinion of United Kingdom Counsel for Biovail. At Closing
time, the Underwriters shall have received the favorable opinion dated as of
Closing Time, of _____________, United Kingdom counsel for Biovail, in form and
substance satisfactory to counsel for the Underwriters, to the effect set forth
in Exhibit H hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(ix) Opinion of Swiss Counsel for Biovail. At Closing time, the
Underwriters shall have received the favorable opinion dated as of Closing
Time, of _____________, Swiss counsel for Biovail, in form and substance
satisfactory to counsel for the Underwriters, to the effect set forth in
Exhibit I hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(x) Opinion of Dutch Antilles Counsel for Biovail. At Closing time,
the Underwriters shall have received the favorable opinion dated as of Closing
Time, of _____________, Dutch Artilles counsel for Biovail, in form and
substance satisfactory to counsel for the Underwriters, to the effect set forth
in Exhibit J hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(xi) Opinion of Counsel for the Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Shearman & Sterling, counsel for the Underwriters, with respect to the
matters set forth in clauses 4, 5, 6, 9 and 16 of Exhibit E hereto. In giving
such opinions with respect to the matters covered by Section 16 of Exhibit E,
Shearman & Sterling may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any
<PAGE> 22
22
amendments or supplements thereto (other than the documents incorporated
therein by reference) and review and discussion of the contents thereof
(including the documents incorporated therein by reference), but are without
independent check or verification except as specified. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States upon the opinions of counsel satisfactory to the Underwriters. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Companies and certificates of public officials.
(g) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be,
in form and substance satisfactory to you, from Deloitte & Touche, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(h) The Companies shall have delivered to you the agreements specified in
Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
(i) The Units shall have been duly listed, subject to notice of issuance,
on the American Stock Exchange.
(j) The Companies shall not have failed on or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required
to be performed or complied with by the Companies on or prior to the Closing
Date.
The several obligations of the Underwriters to purchase any Additional
Units hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to
the good standing of the Companies, the due authorization and issuance of such
Additional Units and other matters related to the issuance of such Additional
Units.
SECTION 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Companies if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market
the Shares on the terms and in the manner contemplated in the Prospectus, (ii)
the suspension or
<PAGE> 23
23
material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Companies on any exchange or in
the over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of Biovail and its
Subsidiaries, taken as a whole, or Intelligent Polymers, (v) the declaration of
a banking moratorium by either federal or New York State authorities or (vi)
the taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Units or Additional Units, as the case may be, which it or they have agreed to
purchase hereunder on such date and the aggregate number of Firm Units or
Additional Units, as the case may be, which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase is
not more than one-tenth of the total number of Units to be purchased on such
date by all Underwriters, each non-defaulting Underwriter shall be obligated
severally, in the proportion which the number of Firm Units set forth opposite
its name in Schedule I bears to the total number of Firm Units which all the
non-defaulting Underwriters, as the case may be, have agreed to purchase, or in
such other proportion as you may specify, to purchase the Firm Units or
Additional Units, as the case may be, which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase on
such date; provided that in no event shall the number of Firm Units or
Additional Units, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 9
by an amount in excess of one-ninth of such number of Firm Units or Additional
Units, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Units and the aggregate number of Firm Units with respect to
which such default occurs is more than one-tenth of the aggregate number of
Firm Units to be purchased by all Underwriters and arrangements satisfactory
to you and the Companies for purchase of such Firm Units are not made within 48
hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter and the Companies. In any such
case which does not result in termination of this Agreement, either you or
either of the Companies shall have the right to postpone the Closing Date, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Units and
<PAGE> 24
24
the aggregate number of Additional Units with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Units to be
purchased on such date, the non-defaulting Underwriters shall have the option
to (i) terminate their obligation hereunder to purchase such Additional Units
or (ii) purchase not less than the number of Additional Units that such
non-defaulting Underwriters would have been obligated to purchase on such date
in the absence of such default. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any default
of any such Underwriter under this Agreement.
SECTION 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to Biovail, to Biovail
Corporation International, 2488 Dunwin Drive, Mississauga, Ontario, Canada L5L
1J9, Attention: Robert A. Podruzny and (ii) if to Intelligent Polymers, Conyers
Dill & Pearman, Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda,
Attention: David J. Doyle and (iii) if to any Underwriter or to you, to you
c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New
York, New York 10122, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Companies and the several Underwriters
set forth in or made pursuant to this Agreement shall remain operative and in
full force and effect, and will survive delivery of and payment for the Units,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Companies, the
officers or directors of the Companies or any person controlling the Companies,
(ii) acceptance of the Units and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Units are not delivered by or on behalf of the
Companies as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 9), the Companies agree to reimburse the several
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Companies shall be liable for all expenses which agreed to
pay pursuant to Section 5(i) hereof. The Companies also agree to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters for any and all fees and expenses (including, without
limitation, the fees disbursements of counsel) incurred by them in connection
with enforcing their rights hereunder (including, without limitation, pursuant
to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Companies, the Underwriters,
the Underwriters' directors and officers, any controlling persons referred to
herein, the Companies' directors and the Companies' officers who sign the
Registration Statement and their respective successors and
<PAGE> 25
25
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include a purchaser of any of the
Units from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
<PAGE> 26
26
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
INTELLIGENT POLYMERS LIMITED
By:
----------------------------------
Title:
Very truly yours,
BIOVAIL CORPORATION INTERNATIONAL
By:
----------------------------------
Title:
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By
---------------------------------
Title:
DILLON, READ & CO. INC.
By
---------------------------------
Title:
LAZARD FRERES & CO.
By
---------------------------------
Title:
<PAGE> 27
27
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm Units
Underwriters to be Purchased
- ------------ -----------------------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities
Corporation
Dillon, Read & Co. Inc.
Lazard Freres & Co.
Total
</TABLE>
<PAGE> 28
Exhibit A
FORM OF OPINION OF GENERAL COUNSEL
FOR BIOVAIL AND INTELLIGENT POLYMERS TO BE DELIVERED PURSUANT TO
SECTION 8(f)(1)
1. The Underwriting Agreement has been duly authorized, executed and
delivered by Biovail.
2. Biovail has been duly incorporated, is validly existing as a
corporation under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties, and is duly qualified
and is in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the business,
prospects, financial condition or results of operations of Biovail.
3. The authorized, issued and outstanding capital stock and the debt
of each of Biovail was at the date indicated as set forth in the Prospectus
under the caption "Biovail Capitalization". All of the outstanding Biovail
common shares have been duly authorized and validly issued and are fully paid
and non-assessable; such shares are not subject to any preemptive or similar
rights and all corporate action required to be taken for the authorization and
issue of such shares, has been validly and sufficiently taken. The authorized
capital stock of Biovail conforms in all material respects to the descriptions
thereof contained or incorporated by reference in the Registration Statement.
There are no outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or liens granted or issued by
Biovail or any of its Subsidiaries relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of Biovail or
any of its Subsidiaries except as otherwise disclosed in the Registration
Statement.
4. The Biovail Common Shares issuable upon exercise of the Warrants
have been duly and validly reserved for such issuance and, when issued and paid
for in accordance with the terms of the Warrant Agreement, will be duly
authorized, validly issued, fully paid and non-assessable; such Biovail Common
Shares are not subject to the preemptive or similar rights of any shareholder
of Biovail; and all corporate action required to be taken for such
authorization, issue and sale of the Biovail Common Shares will have been
validly and sufficiently taken upon the issuance of the Warrants.
5. Crystaal Corporation [others] is a corporation duly organized and
validly existing under the laws of ____________, the jurisdiction of its
incorporation, with corporate power and authority under such laws to own, lease
and operate its properties and conduct its business. All of the outstanding
shares of capital stock of Crystaal Corporation [others] has been duly
A-1
<PAGE> 29
authorized and validly issued, are fully paid and non-assessable and are wholly
owned by Biovail, directly or through one or more of its Subsidiaries, free and
clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
6. The execution, delivery and performance of the Underwriting
Agreement by Biovail and the compliance by Biovail with all the provisions
hereof and the consummation of the transactions contemplated hereby will not
(i) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of Biovail or any of its
Subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to Biovail and its Subsidiaries, taken
as a whole, to which Biovail or any of its Subsidiaries is a party or by which
Biovail or any of its Subsidiaries or their respective property is bound or
(ii) result in the suspension, termination or revocation of any Authorization
(as defined below) of Biovail or any of its Subsidiaries or any other
impairment of the rights of the holder of any such Authorization.
7. Neither Biovail nor any of its Subsidiaries is in violation of its
respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
Biovail and its Subsidiaries, taken as a whole to which Biovail or any of its
Subsidiaries is a party or by which Biovail or any of its Subsidiaries or their
respective property is bound.
8. There are no legal or governmental proceedings pending or
threatened to which Biovail or any of its Subsidiaries is or could be a party
or to which any of their respective property is or could be subject that are
required to be described in the Registration Statement or the Prospectus and
are not so described; nor are there any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not so described or filed as required.
9. Each of Biovail, its Subsidiaries and Intelligent Polymers, as the
case may be, has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "AUTHORIZATION") of, and has made
all filings with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals, including,
without limitation, under any applicable laws regulating pharmaceutical
products and Environmental Laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of Biovail
and its Subsidiaries, taken as a whole, or Intelligent Polymers, as the case
may be. Each such Authorization is valid and in full force and effect and each
of Biovail, its Subsidiaries, and Intelligent Polymers, as the case may be, is
in compliance with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation, the
A-2
<PAGE> 30
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to Biovail, any of its Subsidiaries, or Intelligent Polymers, as
the case may be; except where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such event or the presence
of any such restriction would not, singly or in the aggregate, have a material
adverse effect on the business, prospects, financial condition or results of
operations of Biovail and its Subsidiaries, taken as a whole, or Intelligent
Polymers, as the case may be.
10. Each of Biovail and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of Biovail
and its Subsidiaries in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by Biovail and its Subsidiaries;
and any real property and buildings held under lease by Biovail and its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by Biovail and its
Subsidiaries in each case except as described in the Prospectus.
l1. Neither Biovail, nor any of its Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection
of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") or any provisions of
the Employee Retirement Income Security Act of 1974, as amended, or the rules
and regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of operation of Biovail and
its Subsidiaries, taken as a whole.
12. There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the business, prospects, financial
condition or results of operations of Biovail and its Subsidiaries, taken as a
whole.
13. Biovail and each of its Subsidiaries have filed all tax returns
which are required to be filed by them pursuant to domestic or foreign laws and
have paid all taxes due pursuant to such returns or pursuant to any assessment
received by them (except where the requirement for payment of such taxes is
being contested in good faith in appropriate proceedings). The charges,
accruals and reserves on the books of Biovail and its Subsidiaries in respect
of taxes or other governmental charges are, to the best knowledge of Biovail
and its Subsidiaries, after reasonable investigation, adequate.
A-3
<PAGE> 31
14. There are no contracts, agreements or understandings between
Biovail and any person granting such person the right to require Biovail to
file a registration statement under the Act with respect to any securities of
Biovail or to require Biovail to include such securities with the Units
registered pursuant to the Registration Statement.
15. The Registration Statement and the Prospectus and any supplement
or amendment thereto (except for the financial statements and other financial
data included therein as to which no opinion need be expressed) comply as to
form with the Act, (A) each document, if any, filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus (except for financial
statements and other financial data included therein as to which no opinion
need be expressed) complied when so filed as to form with the Exchange Act, (B)
such counsel has no reason to believe that at the time the Registration
Statement became effective or on the date of this Agreement, the Registration
Statement and the prospectus included therein (except for the financial
statements and other financial data as to which such counsel need not express
any belief) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (C) such counsel has no reason to believe
that the Prospectus, as amended or supplemented, if applicable (except for the
financial statements and other financial data, as aforesaid) contains any
untrue statement of a material fact or omits 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.
In giving such opinions with respect to the matters covered by Section
15, counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but is without
independent check or verification except as specified.
A-4
<PAGE> 32
Exhibit B
FORM OF OPINION OF CANADIAN COUNSEL
FOR BIOVAIL AND INTELLIGENT POLYMERS TO BE DELIVERED PURSUANT TO
SECTION 8(f)(2)
1. The Warrant Agreement (as hereinafter defined), has been duly
authorized, executed and delivered by Biovail and constitutes a valid and
binding obligation of Biovail enforceable in accordance with its terms.
2. No authorization, approval, consent or order of, or filing with
any government, governmental agency, regulatory body or court of Canada is
required for the valid authorization and issue of the Units, the Warrants or
the Biovail Common Shares issuable upon exercise of the Warrants.
3. Upon their issuance, the Warrants will have been duly authorized
by Biovail and, when duly executed, issued and delivered by Biovail and duly
countersigned by the Warrant Agent in the manner provided for in the Warrant
Agreement to be entered into between Biovail and _________ , as Warrant Agent
and when payment of the Purchase Price for the Units has been made, will
constitute valid and binding obligations of Biovail, entitled to the benefits
of the Warrant Agreement, will be enforceable in accordance with their terms
and will conform in all material respects to the description thereof contained
in the Registration Statement; such Warrants are not subject to the preemptive
or similar rights of any shareholder of Biovail; and all corporate action
required to be taken for the authorization, issue and sale of the Warrants has
been validly and sufficiently taken.
4. The Biovail Common Shares issuable upon exercise of the Warrants
have been duly authorized and no further corporate action is necessary for the
issuance of such Biovail Common Shares upon such exercise, and when issued
upon such exercise and upon payment of the exercise price in accordance with
the terms of the Warrant Agreement, will be duly authorized, validly issued,
fully paid and not subject to calls for any additional payments; such Biovail
Common Shares are not subject to preemptive rights; and all corporate action
required to be taken for the authorization and issue of such Biovail Common
Shares has been validly and sufficiently taken.
5. The execution and delivery of each of the Underwriting Agreement,
the Warrant Agreement, the Development Contract and the Services Agreement by
Biovail, and the performance by Biovail of the transactions contemplated
thereby, have been duly authorized by all necessary corporate action on the
part of Biovail and do not, and compliance by Biovail with the terms of the
Underwriting Agreement, the Warrant Agreement, the Development Contract and the
Services Agreement does not, result in any violation of the Memorandum and
Articles of Association of Biovail or any of its Subsidiaries, and do not
conflict with, or result in the
B-1
<PAGE> 33
breach of any of the terms or provisions of, or constitute a default under or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of Biovail or of any of its Subsidiaries under any
existing applicable law, rule or regulation of Ontario, Canada or the federal
laws of Canada applicable therein (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a material
adverse effect on the condition (financial or otherwise) or earnings of Biovail
and its Subsidiaries considered as one enterprise).
6. Each of the Development Contract and the Services Agreement (each
as defined in the Prospectus) has been duly authorized, executed and delivered
by Biovail and constitutes a valid and binding obligation of Biovail
enforceable in accordance with its terms, and conforms in all material respects
to the description thereof in the Registration Statement.
7. Biovail has the power to submit, and pursuant to the Underwriting
Agreement has legally, validly, effectively and irrevocably submitted, to the
personal jurisdiction of any federal or state court in the State of New York,
County of New York, and has the power to designate, appoint and empower, and
pursuant to the Underwriting Agreement has legally, validly, effectively and
irrevocably designated, appointed and empowered, CT Corporation System agent
for service of process in any suit or proceeding based on or arising under the
Underwriting Agreement in any federal or state court in the State of New York,
County of New York.
8. There are no capital, stamp or other issuance taxes or duties
payable by or on behalf of the Underwriters in Canada in connection with (A)
the issuance of the Units, (B) the sale and delivery of the Units to the
Underwriters or (C) the consummation of any other transactions contemplated
under the Underwriting Agreement.
9. Under the laws of Ontario, Canada and the federal laws of Canada
applicable therein, no holder of any Units or Biovail Common Shares is or will
be, purely on account of such holding, subject to any liability in respect of
any liability of Biovail.
10. The statements in the Registration Statement and Prospectus under
the captions "Enforceability of Civil Liabilities Under United States Federal
Securities Laws", "Taxation--Canadian Tax Considerations", "Exchange Controls
and Other Limitations Affecting Security Holders", and "Description of the
Warrants and the Biovail Common Shares" to the extent they constitute matters
of law of Canada or legal conclusions with respect thereto, have been prepared
or reviewed by us and are accurate in all material respects.
11. The descriptions in the Registration Statement and Prospectus of
statutes, regulations, legal or governmental proceedings under the law of or
involving Canada or contracts or other documents governed by the laws of Canada
therein described are accurate in all material respects and fairly summarize
such information.
B-2
<PAGE> 34
Exhibit C
FORM OF OPINION OF PATENT COUNSEL FOR BIOVAIL
AND INTELLIGENT POLYMERS TO BE DELIVERED PURSUANT TO SECTION
8(f)(3)
1. The statements in the Registration Statement and Prospectus under
the captions "Prospectus Summary -- Intelligent Polymers", "Risk
Factors--Business Risks Related to Intelligent Polymers and
Biovail--Uncertainty Regarding Patents and Proprietary Technology;
Unpredictability of Patent Protection" and "Business of Biovail -- Patents and
Proprietary Rights", insofar as such statements relate to patents or
proprietary know-how owned or used by Biovail or its Subsidiaries or patents or
proprietary know-how relating to the Products (as such term is defined in the
Prospectus) have been prepared or reviewed by us and are accurate in all
material respects.
2. Biovail and its Subsidiaries and Intelligent Polymers, as the case
may be, own or possess, or can acquire on reasonable terms, all patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
("INTELLECTUAL PROPERTY") currently employed by them in connection with the
business now operated by them except where the failure to own or possess or
otherwise be able to acquire such intellectual property would not, singly or in
the aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operation of Biovail and its Subsidiaries,
taken as a whole; and neither Biovail nor any of its Subsidiaries has received
any notice of infringement of or conflict with asserted rights of others with
respect to any of such intellectual property which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the business, prospects, financial condition or
results of operations of Biovail and its Subsidiaries, taken as a whole.
3. To the best of our knowledge after due inquiry, we do not know of
any pending or threatened legal or governmental proceeding relating to patents
or proprietary rights owned or used by Biovail or its Subsidiaries, to which
Biovail or any of its Subsidiaries is a party or might be a party or of which
the business or property of Biovail is or might be, the subject which, if
adversely decided, would individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise) or earnings of Biovail
and its Subsidiaries, considered as one enterprise.
4. To the best of our knowledge after due inquiry, we do not know of
any infringement or alleged infringement by Biovail or any of its Subsidiaries,
either directly or indirectly, of patent, trademark, service mark, trade name,
copyright license or other rights owned by others, which if adversely decided,
would individually or in the aggregate, have a material adverse effect on the
conditions (financial or otherwise) or earnings of Biovail and its
Subsidiaries, considered as one enterprise.
C-1
<PAGE> 35
Exhibit D
FORM OF OPINION OF BERMUDA COUNSEL FOR INTELLIGENT POLYMERS
TO BE DELIVERED PURSUANT TO SECTION 8(f)(4)
1. The Underwriting Agreement has been duly authorized, executed and
delivered by Intelligent Polymers.
2. Intelligent Polymers has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation and has the corporate power and authority to carry on its
business as described in the Prospectus and to own, lease and operate its
properties, and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations Intelligent
Polymers.
3. The authorized, issued and outstanding capital stock and the debt
of Intelligent Polymers was at the date indicated as set forth in the
Prospectus under the caption "Intelligent Polymers Capitalization," and the
authorized capital stock of Intelligent Polymers conforms in all material
respects to the descriptions thereof contained or incorporated by reference in
the Registration Statement. There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale or liens
granted or issued by Intelligent Polymers relating to or entitling any person
to purchase or otherwise to acquire any shares of the capital stock of
Intelligent Polymers except as otherwise disclosed in the Registration
Statement.
4. The Intelligent Polymers Common Shares to be issued by Intelligent
Polymers as a component of the Units have been duly authorized and, when issued
and paid for, will be validly issued, fully paid and non-assessable; such
Intelligent Polymers Common Shares are not subject to any preemptive or similar
rights; and all corporate action required to be taken for the authorization,
issue and sale of such Intelligent Polymers Common Shares has been validly and
sufficiently taken.
5. Intelligent Polymers is not in violation of its charter or
bye-laws or in default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to Intelligent
Polymers, to which Intelligent Polymers is a party or by which Intelligent
Polymers or its property is bound. The execution, delivery and performance of
the Underwriting Agreement by Intelligent Polymers, and the compliance by
Intelligent Polymers with all the provisions hereof and the consummation of the
transactions contemplated hereby will not (i) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the charter or
by-laws of Intelligent Polymers, or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to Intelligent
Polymers, to which Intelligent Polymers is a party or by which Intelligent
Polymers or its property is bound, (ii) violate or conflict with
D-1
<PAGE> 36
any applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over Intelligent
Polymers or its property or (iii) result in the suspension, termination or
revocation of any Authorization (as defined below) of Intelligent Polymers or
any other impairment of the rights of the holder of any such Authorization.
6. No authorization, approval, consent or license of any government,
governmental instrumentality or court of Bermuda is required for the valid
authorization, issuance, sale and delivery of the Units, the Intelligent
Polymers Common Shares, the Special Shares or the Warrants, except the
permission of the Bermuda Monetary Authority (Foreign Exchange Control), which
permission has been obtained, and the filing of the Prospectus with the
Registrar of Companies in Bermuda, in accordance with Part III of the Companies
Act 1981, which filing has been made.
7. The statements in the Registration Statement and Prospectus under
the captions "Enforceability of Civil Liabilities Under United States Federal
Securities Laws," "Description of Intelligent Polymers Capital Stock", "The
Agreements and the Purchase Option", "Taxation -Bermuda Tax Considerations" and
"Exchange Controls and Other Limitations Affecting Security Holder -- Bermuda
Exchange Control", to the extent they constitute matters of law or legal
conclusions with respect thereto, have been prepared or reviewed by us and are
correct in all material respects.
8. The descriptions in the Prospectus of statutes, regulations, legal
or governmental proceedings under the law of or involving Bermuda or contracts
or other documents governed by Bermuda law therein described are accurate in
all material respects and fairly summarize the information required to be
shown.
9. There are no legal or governmental proceedings pending or
threatened to which Intelligent Polymers is or could be a party or to which any
of its property is or could be subject that are required to be described in the
Registration Statement or the Prospectus and are not so described; nor are
there any statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not so described or filed as
required.
10. Intelligent Polymers has the power to submit, and pursuant to
this Agreement has legally, validly, effectively and irrevocably submitted, to
the personal jurisdiction of any federal or state court in the State of New
York, County of New York, and has the power to designate, appoint and empower,
and pursuant to this Agreement has legally, validly, effectively and
irrevocably designated, appointed and empowered, CT Corporation System agent
for service of process in any suit or proceeding based on or arising under this
Agreement in any federal or state court in the State of New York, County of New
York.
11. Under the laws of Bermuda, no holder of any Units or Intelligent
Polymers capital stock outstanding immediately after completion of the offering
is or will be, purely on account
D-2
<PAGE> 37
of such holding, subject to any liability in respect of any liability of
Intelligent Polymers, and there are not any restrictions under such laws on
alienability (i.e., the transferability) of any of the Units or Intelligent
Polymers capital stock by persons regarded as non-residents of Bermuda for the
purposes of the Bermuda Exchange Control Act 1972 so long as the approval
granted by the Bermuda Monetary Authority dated _____, 1997 remains in full
force.
12. There are no capital, stamp or other taxes or duties payable by
the Underwriters or on their behalf in Bermuda in connection with (A) sale and
delivery of the Units to be sold by Intelligent Polymers pursuant to the
Underwriting Agreement to the Underwriters, or (B) the consummation of any
other transactions contemplated thereunder.
13. Each of the Development Contract and the Services Agreement
(each as defined in the Prospectus) has been duly authorized, executed and
delivered by Intelligent Polymers and constitutes a valid and binding
obligation of each of Intelligent Polymers enforceable in accordance with its
terms, and conforms in all material respects to the description thereof in the
Registration Statement.
14. The Courts of Bermuda would recognize as a valid judgement, a
final and conclusive judgement in personam obtained in a foreign court against
Intelligent Polymers based upon the Development Contract and the Services
Agreement, as the case may be, under which a sum of money is payable (other
than a sum of money payable in respect of multiple damages, taxes or other
charges of a like nature or in respect of a fine or other penalty) and would
give judgement based thereon provided that (a) such courts have proper
jurisdiction over the parties subject to such judgement, (b) such courts did
not contravene the rules of natural justice of Bermuda, (c) such judgment was
not obtained by fraud, (d) the enforcement of the judgement would not be
contrary to the public policy of Bermuda, (e) no new admissible evidence
relevant to the action is submitted prior to the rendering of the judgement by
the Courts of Bermuda, and (f) the due compliance or the correct procedures
under the laws of Bermuda.
15. There are no contracts, agreements or understandings between
Intelligent Polymers and any person granting such person the right to require
Intelligent Polymers to file a registration statement under the Act with
respect to any securities of Intelligent Polymers or to require Intelligent
Polymers to include such securities with the Units registered pursuant to the
Registration Statement.
16. Such counsel has no reason to believe that at the time the
Registration Statement became effective or on the date of this Agreement, the
Registration Statement and the prospectus included therein (except for the
financial statements and other financial data as to which such counsel need not
express any belief) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and such counsel has no reason to
believe that the Prospectus, as amended or supplemented, if applicable (except
for the financial statements and other financial data, as aforesaid) contains
any untrue statement of a material fact or omits to state a material fact
D-3
<PAGE> 38
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In giving such opinions with respect to the matters covered by Section
16, such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but is without
independent check or verification except as specified.
D-4
<PAGE> 39
Exhibit E
FORM OF OPINION OF U.S. COUNSEL FOR THE COMPANIES
TO BE DELIVERED PURSUANT TO SECTION 8(f)(5)
1. The Registration Statement has become effective under the Act; any
required filing of the Prospectus or any supplement thereto pursuant to Rule
424(b) of the Act has been made in the manner and within the time period
required by Rule 424(b); and, to the best of our knowledge after due inquiry,
no stop order suspending the effectiveness of the Registration Statement has
been issued under the Act or proceedings therefor initiated or threatened by
the Commission.
2. The Registration Statement, the Prospectus and each amendment
thereof or supplement thereto (except for the financial statements and other
financial data included therein or omitted therefrom, as to which we need
express no opinion) as of their respective effective or issue dates, complied
as to form in all material respects with the requirements of the Act.
3. The documents incorporated by reference in the Prospectus (except
for the financial statements and other financial data included therein or
omitted therefrom, as to which we need express no opinion), as of the dates
they were filed with the Commission, appear on their face to have been
appropriately responsive in all material respects to the requirements of the
Exchange Act.
4. Assuming due authorization by each of Biovail and Intelligent
Polymers, the Underwriting Agreement has been duly executed and delivered by
each of Biovail and Intelligent Polymers, to the extent that execution and
delivery are governed by New York law.
5. Assuming due authorization by Biovail, the Warrant Agreement has
been duly executed and delivered by Biovail, to the extent that execution and
delivery are governed by New York law and constitutes a valid and binding
obligation of Biovail enforceable in accordance with its terms.
6. The Warrants, when duly authorized, executed, issued and delivered
by Biovail and countersigned by the Warrant Agent and when payment of the
purchase price for the Units has been made, will constitute valid and binding
obligations of Biovail and will be entitled to the benefits of the Warrant
Agreement, subject, however, (A) to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors' rights, and (B) to general principles of equity, whether such
enforcement is considered in a proceeding in equity or at law; and the Warrants
conform in all material respects to the description thereof contained in the
Registration Statement under the caption "Description of the Warrants and
Biovail Common Shares".
E-1
<PAGE> 40
7. Assuming the due authorization, execution and delivery of the
Development Contract and the Services Agreement by the each of Biovail and
Intelligent Polymers, respectively, each of the Development Contract and the
Services Agreement constitutes a valid and binding obligation of each of
Biovail and Intelligent Polymers.
8. No authorization, approval, consent or license of any government,
governmental instrumentality or court, of the United States (other than under
the Act and the securities or blue sky laws of the various states), is required
for the valid authorization, issuance, sale and delivery of the Units, the
Intelligent Polymers Common Shares, the Special Shares, the Warrants, or the
Biovail Common Shares issuable upon exercise of the Warrants.
9. The statements in the Registration Statement and Prospectus under
the heading "Taxation --United States Tax Considerations" and "Underwriting"
and Item 15 of Part II of the Registration Statement, to the extent they
constitute matters of law or legal conclusions with respect thereto, have been
prepared or reviewed by us and are correct in all material respects and fairly
summarize the information required to be shown.
10. The descriptions in the Prospectus of the statutes, regulations,
legal or governmental proceedings, contracts or other documents therein
described are accurate in all material respects and fairly summarize the
information required to be shown.
11. The Units and the Biovail Common Shares conform in all material
respects to the description thereof contained in the Registration Statement and
the Prospectus and in documents incorporated by reference in the Registration
Statement and Prospectus.
12. There are no legal or governmental proceedings pending or
threatened to which Biovail is, or is threatened to be, a party or of which the
business or property of Biovail is, or is threatened to be, the subject that is
material (in the aggregate) to the business, financial or other condition of
Biovail and its Subsidiaries considered as one enterprise, and which is not
disclosed in the Prospectus.
13. Each of Biovail and Intelligent Polymers has validly and
irrevocably submitted to the jurisdiction of any United States or State court
in the State of New York, County of New York, has expressly accepted the
non-exclusive jurisdiction of any such court and has validly and irrevocably
appointed CT Corporation Systems as its authorized agent in any suit or
proceeding against it instituted by the Underwriters based on or arising under
the Underwriting Agreement.
14. Biovail Americas Corp. and Biovail Laboratories PR [others] are
corporations duly organized and validly existing under the laws of ____________
and _______, respectively, their jurisdictions of its incorporation, with
corporate power and authority under such laws to own, lease and operate their
properties and conduct their business. All of the outstanding shares of
capital stock of each of Biovail Americas Corp. and Biovail Laboratories PR
[others] have been duly authorized and validly issued, are fully paid and
non-assessable and are wholly owned by
E-2
<PAGE> 41
Biovail, directly or through one or more of its Subsidiaries, free and clear of
any pledge, lien, security interest, charge, claim, equity or encumbrance of
any kind.
15. We have participated in conferences, by person or by telephone,
with officers and other representatives of Biovail and Intelligent Polymers,
with representatives of the chartered accountants for Biovail and Intelligent
Polymers and with your representatives and your counsel. At such meetings the
contents of the Registration Statement and Prospectus and related matters were
discussed among the parties present at such meetings. Although we are not
passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus except as set forth in paragraphs 9 and 10 above,
we advise you that on the basis of the foregoing, no facts have come to our
attention which lead us to believe that the Registration Statement, at the time
it became effective or on the date hereof, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, on the date Prospectus was first provided by Biovail and/or
Intelligent Polymers for use in connection with the Unit Offering or on the
date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in each case in light of the
circumstances under which they were made, not misleading (it being understood
that we have not been asked to, and do not, comment on the financial
statements, including the notes thereto, or any other financial data found in
or derived from the internal accounting and other records of Biovail and its
Subsidiaries or Intelligent Polymers set forth therein).
In giving such opinions with respect to the matters covered by Section
16, such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but is without
independent check or verification except as specified.
E-3
<PAGE> 42
Exhibit F
FORM OF OPINION OF U.S. FDA COUNSEL FOR THE COMPANIES
TO BE DELIVERED PURSUANT TO SECTION 8(f)(6)
1. The statements in the Registration Statement and Prospectus
regarding the federal laws, regulations or rules relating to the manufacture or
sale of pharmaceutical products and the approval processes relating thereto,
including, without limitation, the portions of the Prospectus entitled "Risk
Factors -- Business Risks Related to Intelligent Polymers and Biovail --
Government Regulation", "-- Uncertainty Regarding Patents and Proprietary
Technology; Unpredictability of Patent Protection" and "Regulation - United
States Regulation", have been prepared or reviewed by us and are accurate in
all material respects.
2. The statements in the Registration Statement regarding the
statutes, regulations and legal or governmental proceedings or procedures
relating to the FDA and the approval process relating to Biovail's and
Intelligent Polymers's products are accurate in all material respects and are a
fair summary of those statutes, regulations, proceedings or procedures.
F-1
<PAGE> 43
Exhibit G
FORM OF OPINION OF BARBADOS COUNSEL
FOR BIOVAIL TO BE DELIVERED PURSUANT TO SECTION 8(f)(7)
1. Each of Trimel Holding Corporation and Biovail Laboratories Inc.
[others] are corporations duly organized and validly existing under the laws of
Barbados, their jurisdictions of its incorporation, with corporate power and
authority under such laws to own, lease and operate their properties and
conduct their business. All of the outstanding shares of capital stock of each
of Trimel Holding Corporation and Biovail Laboratories Inc. [others] have been
duly authorized and validly issued, are fully paid and non-assessable and are
wholly owned by Biovail, directly or through one or more of its Subsidiaries,
free and clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
G-1
<PAGE> 44
Exhibit H
FORM OF OPINION OF UNITED KINGDOM COUNSEL
FOR BIOVAIL TO BE DELIVERED PURSUANT TO
SECTION 8(f)(8)
1. Biovail UK [others] is a corporation duly organized and validly
existing under the laws of the United Kingdom, the jurisdiction of its
incorporation, with corporate power and authority under such laws to own, lease
and operate its properties and conduct its business. All of the outstanding
shares of capital stock of Biovail UK [others] has been duly authorized and
validly issued, are fully paid and non-assessable and are wholly owned by
Biovail, directly or through one or more of its Subsidiaries, free and clear of
any pledge, lien, security interest, charge, claim, equity or encumbrance of
any kind.
H-1
<PAGE> 45
Exhibit I
FORM OF OPINION OF SWISS COUNSEL
FOR BIOVAIL TO BE DELIVERED PURSUANT TO
SECTION 8(f)(9)
1. Biovail SA [others] is a corporation duly organized and validly
existing under the laws of Switzerland, the jurisdiction of its incorporation,
with corporate power and authority under such laws to own, lease and operate
its properties and conduct its business. All of the outstanding shares of
capital stock of Biovail SA [others] has been duly authorized and validly
issued, are fully paid and non-assessable and are wholly owned by Biovail,
directly or through one or more of its Subsidiaries, free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance of any
kind.
I-1
<PAGE> 46
Exhibit J
FORM OF OPINION OF DUTCH ANTILLES COUNSEL
FOR BIOVAIL TO BE DELIVERED PURSUANT TO
SECTION 8(f)(10)
1. Biosytes NV [others] is a corporation duly organized and validly
existing under the laws of the Dutch Antilles, the jurisdiction of its
incorporation, with corporate power and authority under such laws to own, lease
and operate its properties and conduct its business. All of the outstanding
shares of capital stock of Biosytes NV [others] has been duly authorized and
validly issued, are fully paid and non-assessable and are wholly owned by
Biovail, directly or through one or more of its Subsidiaries, free and clear of
any pledge, lien, security interest, charge, claim, equity or encumbrance of
any kind.
J-1
<PAGE> 1
EXHIBIT 3.1
FORM NO. 2
[LOGO]
BERMUDA
THE COMPANIES ACT 1981
MEMORANDUM OF ASSOCIATION OF
COMPANY LIMITED BY SHARES
(Section 7(1) and (2))
MEMORANDUM OF ASSOCIATION
OF
Intelligent Polymers Limited
(hereinafter referred to as "the Company")
1. The liability of the members of the Company is limited to the amount (if
any) for the time being unpaid on the shares respectively held by them.
2. We, the undersigned, namely,
<TABLE>
<CAPTION>
BERMUDIAN NATIONALITY NUMBER OF
STATUS SHARES
NAME ADDRESS (Yes/No) SUBSCRIBED
<S> <C> <C> <C> <C>
Graham B.R. Collis Clarendon House Yes British One
2 Church Street
Hamilton HM 11
Bermuda
Nicolas G. Trollope " Yes British One
Anthony D. Whaley " Yes British One
</TABLE>
do hereby respectively agree to take such number of shares of the Company as
may be allotted to us respectively by the provisional directors of the Company,
not exceeding the number of shares for which we have respectively subscribed,
and to satisfy such calls as may be made by the directors, provisional
directors or promoters of the Company in respect of the shares allotted to us
respectively.
3. The Company is to be an exempted Company as defined by the Companies Act
1981.
<PAGE> 2
-2-
4. The Company has power to hold land situated in Bermuda not exceeding in
all, including the following parcels-
N/A
5. The authorised share capital of the Company is US$12,000 divided into
shares of US$1.00 each. The minimum subscribed share capital of the
Company is US$12,000.
6. The objects for which the Company is formed and incorporated are -
1. To develop pharmaceutical products that apply advanced proprietary
controlled release delivery technologies for controlled release drugs
for the generic and branded markets and to commercialise such
products, through manufacturing, direct sales, licencing or other
means;
2. To apply for register, purchase, lease, acquire, hold, use, control,
licence, sell, assign or dispose or patents, patent rights,
copyrights, trademarks formulae, licences, inventions, processes,
distinctive marks and similar rights relative to the Company's
products as set out in paragraph 1 hereof; and
3. As set forth in paragraphs (b) to (n) and (p) to (u) inclusive of the
Second Schedule to The Companies Act 1981.
7. Powers of the Company
1. The Company shall, pursuant to Section 42 of the Companies Act 1981,
have the power to issue preference shares which are, at the option of
the holder, liable to be redeemed.
<PAGE> 3
-3-
Signed by each subscriber in the presence of at least one witness attesting the
signature thereof -
- ------------------------------------- --------------------------------------
- ------------------------------------- --------------------------------------
- ------------------------------------- --------------------------------------
- ------------------------------------- --------------------------------------
(Subscribers) (Witnesses)
SUBSCRIBED this 23rd day of July, 1997.
<PAGE> 1
EXHIBIT 3.2
[DRAFT NO. 2 AUGUST 22, 1997]
B Y E - L A W S
of
INTELLIGENT POLYMERS LIMITED
<PAGE> 2
(i)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Bye-Law Page
<S> <C> <C>
1 Interpretation 1-3
2 Share Capital and Share Rights 3-4
3 Option to Acquire Common Shares 4-13
4 Voting Rights 13
5 Issue by Board of Authorised but Unissued Common Shares 13
6 Election of Board of Directors 14-15
7 Management of the Company 15
8 Power to appoint managing director or chief executive officer 15
9 Power to appoint manager 15
10 Power to authorise specific actions 15-16
11 Power to appoint attorney 16
12 Power to delegate to a committee 16
13 Power to appoint and dismiss employees 16
14 Power to borrow and charge property 16-17
15 Exercise of power to purchase shares of, or discontinue the Company 17
16 Defects in appointment of Directors 17
17 Alternate Directors 17-18
18 Removal of Directors 18
19 Vacancies on the Board 18-19
20 Notice of meetings of the Board 19
21 Quorum at meetings of the Board 19-20
22 Meetings of the Board 20
23 Unanimous written resolutions 20
24 Contracts and disclosure of Directors' interests 20-21
25 Remuneration of Directors 18-19
26 Officers of the Company 21
27 Appointment of Officers 21
28 Remuneration of Officers 21-22
29 Duties of Officers 22
30 Chairman of meetings 22
31 Register of Directors and Officers 22
32 Obligations of Board to keep minutes 22-23
33 Indemnification of Directors and Officers of the Company 23-24
34 Waiver of claim by Member 24
35 Notice of annual general meeting 24
</TABLE>
<PAGE> 3
(ii)
<TABLE>
<S> <C> <C>
36 Notice of special general meeting 24
37 Accidental omission of notice of general meeting 25
38 Meeting called on requisition of members 25
39 Short notice 25
40 Postponement of meetings 25-26
41 Quorum for general meeting 26
42 Adjournment of meetings 26
43 Attendance at meetings 26
44 Written resolutions 27-28
45 Attendance of Directors 28
46 Voting at meetings 28
47 Voting on show of hands 28
48 Decision of chairman 28-29
49 Demand for a poll 29-30
50 Seniority of joint holders voting 30
51 Instrument of proxy 30-31
52 Representation of corporations at meetings 31
53 Variation of rights, alteration of share capital and purchase of
shares of the Company 31-32
54 Registered holder of shares 32
55 Death of a joint holder 33
56 Share certificates 33-34
57 Calls on shares 34
58 Forfeiture of Shares 35
59 Contents of Register of Members 35
60 Inspection of Register of Members 35
61 Determination of record dates 36
62 Instrument of transfer 36
63 Transfers by joint holders 36-37
64 Representative of deceased Member 37
65 Registration on death or bankruptcy 37-38
66 Declaration of dividends by Board 38
67 Other distributions 38
68 Reserve fund 38
69 Deduction of amounts due to the Company 38
70 Issue of bonus shares 38-39
71 Records of account 39
72 Financial year end 39
73 Financial statements 40
74 Appointment of Auditor 40
</TABLE>
<PAGE> 4
(iii)
<TABLE>
<S> <C> <C>
75 Remuneration of Auditor 40
76 Vacation of office of Auditor 40
77 Access to books of the Company 40-41
78 Report of the Auditor 41
79 Notices to Members of the Company 41
80 Notices to joint Members 42
81 Service and delivery of notice 42
82 The seal 42
83 Manner in which seal is to be affixed 42
84 Winding-up/distribution by liquidator 43
85 Alteration of Bye-laws 43
</TABLE>
<PAGE> 5
INTERPRETATION
1. Interpretation
(1) In these Bye-laws the following words and expressions shall,
where not inconsistent with the context, have the following meanings
respectively:-
(a) "Act" means the Companies Act 1981 as amended from time to
time;
(b) "Alternate Director" means an alternate Director appointed
in accordance with these Bye-laws;
(c) "Auditor" includes any individual or partnership;
(d) "Board" means the Board of Directors appointed or
elected pursuant to these Bye-laws and acting by
resolution in accordance with the Act and these
Bye-laws or the Directors present at a meeting of
Directors at which there is a quorum;
(e) "Common Director" means a director appointed pursuant to
Bye-Law 6;
(f) "Company" means the company for which these Bye-laws are
approved and confirmed;
(g) "Director" means a director of the Company and shall include
an Alternate Director;
(h) "Biovail" means Biovail Corporation International or any
successor entity thereto;
(i) "the Majority Special Shareholders" means the Holder or
Holders of a majority of the Special Shares for the time
being in issue;
(j) "Member" or "Shareholder" means the person registered in the
Register of Members as the holder of shares in the Company
and, when two or more persons are so registered as joint
holders of shares, means the person whose name stands first
in the Register of Members as one of such joint holders or
all of such persons as the context so requires;
<PAGE> 6
-2-
(k) "notice" means written notice as further defined in these
Bye-laws unless otherwise specifically stated;
(l) "Officer" means any person appointed by the Board to hold an
office in the Company and includes, without limitation, a
person duly appointed as a member of a Committee of the
Board;
(m) "Register of Directors and Officers" means the Register of
Directors and Officers referred to in these Bye-laws;
(n) "Register of Members" means the Register of Members referred
to in these Bye-laws;
(o) "Secretary" means the person appointed to perform any or all
the duties of secretary of the Company and includes any
deputy or assistant secretary;
(p) "Special Director" means a director appointed pursuant to
Bye-Law 6;
(q) "Unit" means a unit consisting of one Common Share, par
value $0.01 per share of the Company and one Warrant to
purchase one common share, no par value, of Biovail; and
(r) "Unit Offering" means an offering of the Units defined
herein.
(2) In these Bye-laws, where not inconsistent with the context:-
(a) words denoting the plural number include the singular number
and vice versa;
(b) words denoting the masculine gender include the feminine
gender;
(c) words importing persons include companies, associations or
bodies of persons whether corporate or not;
(d) the word:-
(i) "may" shall be construed as permissive;
(ii) "shall" shall be construed as imperative; and
(e) unless otherwise provided herein words or expressions
defined in the Act shall bear the same meaning in these
Bye-laws.
<PAGE> 7
-3-
(3) Expressions referring to writing or written shall, unless the
contrary intention appears, include facsimile, printing, lithography,
photography and other modes of representing words in a visible form.
(4) Headings used in these Bye-laws are for convenience only and are
not to be used or relied upon in the construction hereof.
SHARE CAPITAL AND SHARE RIGHTS
2. (a) The authorised share capital of the Company is US$
divided into Common Shares ("Common Shares") of $0.01 par value
each and 12,000 Shares of $1.00 each (the "Special Shares").
(b) The assets available for distribution to shareholders in a
winding up shall be applied as follows and in the following
order of priority:-
(i) in payment to the Holders of the Common Shares of the
amounts paid up on such shares held by them respectively;
(ii) in payment to the Holders of the Special Shares of the
amounts paid up on such shares held by them respectively;
and
(iii) in distribution to the Holders of the Common Shares (or, if
no Common Shares shall have been issued since the adoption
of these Bye-Laws, to the Holders of the Special Shares) in
proportion to the numbers of such shares held by them
respectively.
(c) Unless no Common Shares shall have been issued since the adoption
of these Bye-Laws, the Special Shares shall not confer upon the
Holders thereof
(i) (save as provided in paragraph (b) of this Bye-Law) any
right to receive any dividend or other distribution, nor
any right or interest in the profits or assets of the
Company or
(ii) (save as provided in Bye-Laws 3(9)(ii) and 6) any right to
vote at general meetings.
<PAGE> 8
-4-
OPTION TO ACQUIRE COMMON SHARES
3. (1) In this Bye-Law, the following expressions shall have the follow
meanings:-
an "Approved Opinion" a written opinion of legal advisors
to the Majority Special
Shareholders, if the Directors are
of the view that the import of such
opinion and the identity of such
legal advisors are reasonably
satisfactory;
"Available Funds" the sum of
(i) the aggregate amount of funds
received by the Company upon the
completion of the Unit Offering;
(ii) interest and all other income
earned from time to time as a
result of the temporary investment
of the funds described in clause
(i) of this definition or interest
or income thereon;
(iii) any other revenues received
by the Company from Biovail or any
other person under any agreements
between the Company, on the one
hand, and Biovail or such person,
on the other hand, whether of a
capital or income nature,
including, without limitation,
funds received by the Company
pursuant to Sections 4 and 9 of the
Development Contract;
(iv) after Regulatory Approval of
the Additional Product (as defined
in the Development Contract) in the
U.S.A. (or after the parties agree
not to pursue such approval), any
portion of the Litigation Reserve
(as defined in the Development
Contract), which was not expended
pursuant to Section 5.6 of the
Development Contract, less the sum
of
<PAGE> 9
-5-
(v) all necessary or appropriate
expenses incurred in operating the
business of the Company (other than
amounts paid under the Development
Contract), including, without
limitation, legal and
administrative expenses, amounts
paid by the Company from time to
time under the Services Agreement
dated October , 1997 among the
Company, Biovail Laboratories
Incorporated and Biovail and
reasonable reserves for present and
future obligations of the Company;
and
(vi) prior to regulatory approval
of the Additional Product, the
Litigation Reserve, and after
regulatory approval of the
Additional Product, that portion of
the Litigation Reserve that was
expended pursuant to Section 5.6 of
the Development Contract; and
(vii) an amount in respect of
working capital to be retained by
the Company as it shall determine
not in excess of US$1 million.
"Cash or Cash Equivalents" Cash or short term, highly liquid
investments that are:
(i) readily convertible to known
amounts of cash; and
(ii) so near their maturity that
they present insignificant risk of
changes in value because of changes
in interest rates but so that
generally only investments with
original maturities of three months
or less qualify under this
definition;
"Common Shareholder" A Holder for the time being of
Common Shares;
<PAGE> 10
-6-
"Designated Products" The products which the Board of the
Company, with the consent of
Biovail, may select pursuant to the
terms of the Development Contract;
"Development Contract" The development and licence
agreement dated , 1997
between the Company and Biovail
under which Biovail will use
diligent efforts to conduct
clinical development, final
product development, including
regulatory approval and
commercialisation of the Products
in accordance with the terms of
the Development
Contract;
"Directors' Notice" A notice given by the Directors
under paragraph (5) of this
Bye-Law;
"Dollars" or "$" Lawful currency of the United
States of America;
"Biovail Option" The right of Biovail to reject the
Company's exercise of the Licence
Option within 60 days of the
Company providing notice of its
exercise thereof upon payment by
Biovail, at the option of the
Company, of either (a) a one time
cash fee of US$25 million or (b)
base royalties of 10% of the net
sales price in respect of sales of
any relevant product in the United
States by Biovail or an Biovail
affiliate during the licence
period; provided however, the
Biovail Option may only be
exercised as to one product;
"Biovail Securities Common Shares of Biovail;
"the Exchange" The American Stock Exchange, Inc.
or The New York Stock Exchange or
such other major stock exchange as
shall be recognised by the Board of
Directors of the Company as an
approved stock exchange for the
purposes hereof;
<PAGE> 11
-7-
"Exercise Notice" A notice given by the Majority
Special Shareholders under
paragraph (2) of this Bye-Law;
"License Option" The Company's option to acquire a
license to sell and otherwise
market in the Unites States the
Products developed by Biovail under
the Development Contract on a
product-by-product basis and in the
case of any product for which
Biovail has manufacturing rights, a
license to manufacture;
"License Period" The longer of the expiration of any
patents covering the licensed
Product or, if there are no such
patents, for a period of ten years
from the date of the first
commercial sale of the Product;
"NASDAQ" The NASDAQ National Market System;
"Products" Shall have the meaning assigned to
that term in the Development
Contract as defined herein.
; and
"Purchase Option" The right of the Majority Special
Shareholders to purchase all, but
not less than all, of the Common
Shares of the Company outstanding
at the time such right is
exercised.
(2) The Majority Special Shareholders may at any time give an
Exercise Notice to the Company stating their intention of acquiring all of the
Common Shares for the time being in issue; such Exercise Notice may be given at
any time beginning on the closing date of the Unit Offering and ending on the
earlier of:-
(i) September 30, 2002; or
<PAGE> 12
-8-
(ii) the 90th day after the date the Company provides the
Majority Special Shareholders with quarterly financial
statements of the Company showing Cash or Cash Equivalents
of less than US$3 million (the "Financial Notice") although
Biovail may at its election extend such period by providing
additional funding for the continued development of all of
the Products (but in no event beyond September 30, 2002);
provided, however, if Biovail prior to such 90th day shall
provide written confirmation to the Company that Biovail
shall use commercially reasonable efforts, at no expense to
the Company beyond the Available Funds, to continue to
develop the Products for so long as Biovail continues to
use commercially reasonable efforts, but in no case beyond
September 30, 2002; or
(iii) On the 90th day after the Financial Notice, to the extent
Biovail has not either exercised the Purchase Option or
extended the termination date of the Purchase Option, the
Company and Biovail will commence negotiations (for a
maximum period of 60 days) as to the terms on which Biovail
might provide additional funding for any or all of the
Products, taking into account relevant issues such as the
amount and timing of such funding, possible alterations in
the Biovail Option price if the Biovail Option has not yet
been exercised or the possibility of granting Biovail a
renewed Biovail Option if the Biovail Option has been
exercised, and alterations in the royalty payment terms in
the event that Biovail does not ultimately choose to
exercise the Biovail Option. If the Company and Biovail
successfully negotiate new funding terms, the Purchase
Option can be extended but not beyond September 30, 2002.
The Exercise Notice, once given, shall not be withdrawn.
(3) The Exercise Notice shall state
(i) the consideration (expressed as an amount in cash in
Dollars to be given for each Common Share) which shall be
as follows:-
If the Common Shares are acquired Purchase Option
pursuant to the Purchase Option:- Exercise Price
-----------------------------------------------------------
Before October 1, 2000 US$ 39.06
On or after October 1, 2000 and on or US$ 48.83
<PAGE> 13
-9-
before September 30, 2001,
On or after October 1, 2001 and on
or before September 30, 2002, US$ 61.04
(ii) the form in which such consideration shall be discharged
shall be cash in Dollars save that, if Biovail Securities
or securities of a Majority Special Shareholder, if other
than Biovail, are listed on a national securities exchange
in the United States of America or admitted to unlisted
trading privileges or listed on NASDAQ, it may be wholly or
partially satisfied in Biovail Securities or the securities
of such other Majority Shareholder at the election of the
Majority Special Shareholders;
(iii) to the extent that such consideration is in the form of
Biovail Securities or the securities of such other Majority
Shareholder the amount expressed in cash in Dollars
represented thereby;
(iv) the name or names (if any) into which the Common Shares are
to be transferred; and
(v) The repurchase date.
(4) The amount of Biovail Securities or securities of such other
Majority Special Shareholder as provided in Section 3(ii) above which shall be
taken to represent a certain amount in cash in Dollars shall be calculated by
reference to the average of the closing price of the relevant Biovail Securities
or such other securities on the Exchange or such other principal exchange on
which the relevant Biovail Securities or such other securities are then traded
or, if there is no such exchange, the average of the last sales prices quoted on
NASDAQ or if the relevant Biovail Securities or such other securities are not
quoted on NASDAQ the average of the bid prices quoted on NASDAQ over the five
trading days immediately preceding the date on which the Exercise Notice is
given;
(5) Within 14 days of the giving of the Exercise Notice the Directors
shall give a Directors' Notice to each Common Shareholder setting forth the
contents of the Exercise Notice, the procedure to be followed by him for
delivery to or upon the order of Biovail the appropriate instruments of transfer
and/or certificates, or other security instruments or evidence of title to the
relevant Common Shares, the procedure to be followed for the discharge of the
consideration and the last date for delivery of the instruments and/or
certificates, or other security instruments or evidence as aforesaid (which
shall be the repurchase date as set forth in the Exercise Notice or such other
date as may be selected by the Majority Special Shareholders), and the Directors
may at their discretion supply to the Common Shareholders any appropriate
instruments of transfer for execution.
<PAGE> 14
-10-
(6) On or before such last date for delivery, the Majority Special
Shareholders shall deposit with the Company or make other appropriate
arrangements as designated by the Directors for delivering the consideration for
the Common Shares in the form of cash and/or (as the case may be) Biovail
Securities or any combination of the foregoing or appropriate instruments of
title or conferring a right to obtain title thereto in a form capable of being
passed on to the Common Shareholders and the Company shall upon or as soon as
may be after the said date pay, deliver, transfer or otherwise make available
the said consideration to the Common Shareholders.
(7) In the event of any Common Shareholder failing to deliver the
appropriate instruments of transfer and/or certificates, or other security
instruments or evidence of title as referred to in paragraph (5) of this
Bye-Law, the Company shall execute an instrument of transfer over the relevant
Common Shares and register the same and such transfer to or upon the order of
the Majority Special Shareholders and such registration shall be valid and
binding upon the Common Shareholder as if he had validly executed such transfer
(notwithstanding the death or insanity of the Common Shareholder) and the
Company shall hold the attributable part of the consideration upon trust for the
Common Shareholder subject to the Common Shareholder providing the Directors
with satisfactory evidence of title to such Common Shares but so that if at the
expiry of two years following the said last date for delivery the Common
Shareholder shall not have furnished such evidence as aforesaid the Company
shall thereupon hold such consideration upon trust for the Majority Special
Shareholders and thereafter such Common Shareholder shall have no right to
receive any consideration for and shall not otherwise have any rights with
respect to such Common Shares.
(8) The Directors shall within 45 days after the end of each calendar
quarter furnish to the Majority Special Shareholders financial statements in
relation to the Company's affairs including a balance sheet as at the end of the
relevant calendar quarter.
(9) Unless the last date on which the Exercise Notice may be given
shall have passed without the Exercise Notice having been given:-
(i) no resolution of the Company in general meeting or of
the Directors or of a Committee of the Directors nor any
act or deed on the Company's behalf shall (notwithstanding
anything to the contrary in these Bye-Laws) be effective
without the prior sanction in writing of the Majority
Special Shareholders if the result of such resolution, act
or deed would be to authorise or permit the Company to:
<PAGE> 15
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(A) allot or issue any shares or other securities or any
right which confers or may confer a right to any such
allotment or issue;
(B) reduce the Company's share capital in any way;
(C) borrow money or incur any indebtedness of a kind
which would be deemed to be moneys borrowed if
immediately thereafter the aggregate amount for the
time being remaining undischarged of all moneys
borrowed as aforesaid by the Group (exclusive of
moneys borrowed by any member of the Group from and
for the time being owing to any other member thereof)
would exceed $1,000,000. For the purposes of this
Bye-Law "the Group" shall mean the Company and all
companies in which the Company beneficially owns
directly or indirectly a majority of nominal value of
the share capital for the time being in issue;
(D) sell or otherwise dispose of or lien the whole or any
part of the undertaking or assets of the Company;
(E) declare or pay a dividend or make any other
distribution to the Shareholders;
(F) amalgamate with any other body corporate; or
(G) alter or remove any part of this Bye-Law 3; and
(ii) on any resolution to wind up the Company the Special Shares
for the time being in issue shall confer on the Holders
thereof a number of votes equal to the total number of votes
conferred by the Common Shares for the time being in issue.
(10) If the consideration to be given for the Common Shares is wholly
or partly in the form of Biovail Securities as aforesaid, the Majority Special
Shareholders shall be obliged to register such Biovail Securities with the
United States Securities and Exchange Commission unless there shall be an
Approved Opinion to the effect that such registration is not necessary.
VOTING RIGHTS
4. At a general meeting of the Company every holder of Common Shares
shall, on a show of hands be entitled to one vote, and on a poll, shall be
entitled to one vote for every share held by him. Save as otherwise provided in
these Bye-Laws, the holders of Special Shares shall not be entitled to attend
or vote at a General Meeting of the Company.
ISSUE BY BOARD OF AUTHORISED BUT UNISSUED COMMON SHARES
5. Without prejudice to any special rights conferred on the holders of any
existing shares or class of shares and subject to the provisions of the
Companies Acts, the Board may in
<PAGE> 16
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its discretion, at any time, and from time to time, issue or cause to be issued
all or any part of the authorised but unissued Common Shares of the Company, if
any, for consideration of such character and value as the Board shall in its
absolute discretion from time to time fix or determine.
ELECTION OF BOARD OF DIRECTORS
6. Election of Board of Directors
(1) The business of the Company shall be managed and conducted by the
Board. The number of directors shall be determined and elected at each Annual
General Meeting in accordance with the following Bye-Laws and subject to the
Companies Act and these Bye-Laws, such directors shall serve until re-elected or
their successors are appointed at the next Annual General Meeting.
(2) The Majority Special Shareholders shall be entitled at the First
General Meeting and at each Annual General Meeting of the Members thereafter to
nominate and elect one (1) director who shall be called a "Special Director".
The Majority Special Shareholders may also nominate and elect one (1) alternate
director who shall serve as Alternate to the Special Director and shall be
called the "Special Alternate Director". The Majority Special Shareholders shall
be entitled from time to time to remove any such Special Director or Special
Alternate Director and to nominate and elect another Special Director or Special
Alternate Director in their place or in place of the Special Director or Special
Alternate Director who shall for any cause vacate their office.
(3) The holders of a majority of the Common Shares of the Company
shall have the same right as the holder of the Special Shares for the nomination
and election of such number of Directors as they shall determine who shall be
known as "Common Directors". For the purposes of this Bye-Law, the Special
Shares and the Common Shares shall each be deemed to be non-voting with respect
only to the election of the directors nominated to the Board by the Majority
Special Shareholders and the holders of a majority of the Common Shares
respectively.
(4) The Special Shares and the Common Shares shall each hold a class
meeting for the purpose of electing the Special Directors and the Common
Directors, respectively, at which a quorum will be more than thirty three
percent (33%) of the Special Shares or the Common Shares, as the case may be,
represented in person or by proxy.
<PAGE> 17
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7. Management of the Company
(1) In managing the business of the Company, the Board may exercise
all such powers of the Company as are not, by statute or by these Bye-laws,
required to be exercised by the Company in general meeting subject,
nevertheless, to these Bye-laws, the provisions of any statute and to such
directions as may be prescribed by the Company in general meeting.
(2) No regulation or alteration to these Bye-laws made by the Company
in general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation or alteration had not been made.
(3) The Board may procure that the Company pays all expenses incurred
in promoting and incorporating the Company.
8. Power to appoint managing director or chief executive officer
The Board may from time to time appoint one or more Directors to the
office of managing director or chief executive officer of the Company who shall,
subject to the control of the Board, supervise and administer all of the general
business and affairs of the Company.
9. Power to appoint manager
The Board may appoint a person to act as manager of the Company's day
to day business and may entrust to and confer upon such manager such powers and
duties as it deems appropriate for the transaction or conduct of such business.
10. Power to authorise specific actions
The Board may from time to time and at any time authorise any company,
firm, person or body of persons to act on behalf of the Company for any specific
purpose and in connection therewith to execute any agreement, document or
instrument on behalf of the Company.
11. Power to appoint attorney
The Board may from time to time and at any time by power of attorney
appoint any company, firm, person or body of persons, whether nominated directly
or indirectly by the Board, to be an attorney of the Company for such purposes
and with such powers, authorities and discretions (not exceeding those vested in
or exercisable by the Board) and for such period and subject to such conditions
as it may think fit and any such power of attorney may contain such provisions
for the protection and convenience of persons dealing with any such attorney as
the Board may think fit and may also authorise any such attorney to sub-delegate
all or any of the powers, authorities and discretions so vested in the attorney.
Such attorney
<PAGE> 18
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may, if so authorised under the seal of the Company, execute any
deed or instrument under such attorney's personal seal with the same effect as
the affixation of the seal of the Company.
12. Power to delegate to a committee
The Board may delegate any of its powers to a committee appointed by
the Board which may consist partly or entirely of non-Directors and every such
committee shall conform to such directions as the Board shall impose on them.
13. Power to appoint and dismiss employees
The Board may appoint, suspend or remove any manager, secretary, clerk,
agent or employee of the Company and may fix their remuneration and determine
their duties.
14. Power to borrow and charge property
The Board may exercise all the powers of the Company to borrow money
and to mortgage or charge its undertaking, property and uncalled capital, or any
part thereof, and may issue debentures, debenture stock and other securities
whether outright or as security for any debt, liability or obligation of the
Company or any third party.
15. Exercise of power to purchase shares of or discontinue the Company
(1) The Board may exercise all the powers of the Company to purchase
all or any part of its own shares pursuant to Section 42A of the Act.
(2) The Board may exercise all the powers of the Company to
discontinue the Company to a named country or jurisdiction outside Bermuda
pursuant to Section 132G of the Act.
16. Defects in appointment of Directors
All acts done bona fide by any meeting of the Board or by a committee
of the Board or by any person acting as a Director shall, notwithstanding that
it be afterwards discovered that there was some defect in the appointment of any
Director or person acting as aforesaid, or that they or any of them were
disqualified, be as valid as if every such person had been duly appointed and
was qualified to be a Director.
17. Alternate Directors
(1) Any general meeting of the Company may elect a person or persons
to act as a Director in the alternative to any one or more of the Directors of
the Company or may authorise
<PAGE> 19
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the Board to appoint such Alternate Directors. Unless the Members otherwise
resolve, any Director may appoint a person or persons to act as a Director in
the alternative to himself or herself by notice in writing deposited with the
Secretary. Any person so appointed shall have all the rights and powers of the
Director or Directors for whom such person is appointed in the alternative
provided that such person shall not be counted more than once in determining
whether or not a quorum is present.
(1) An Alternate Director shall be entitled to receive notice of all
meetings of the Board and to attend and vote at any such meeting at which a
Director for whom such Alternate Director was appointed in the alternative is
not personally present and generally to perform at such meeting all the
functions of such Director for whom such Alternate Director was appointed.
(2) An Alternate Director shall cease to be such if the Director for
whom such Alternate Director was appointed ceases for any reason to be a
Director but may be re-appointed by the Board as alternate to the person
appointed to fill the vacancy in accordance with these Bye-laws.
18. Removal of Directors
(1) Subject to any provision to the contrary in these Bye-laws, the
Members may, at any special general meeting convened and held in accordance with
these Bye-laws, remove a Director provided that the notice of any such meeting
convened for the purpose of removing a Director shall contain a statement of the
intention so to do and be served on such Director not less than 14 days before
the meeting and at such meeting such Director shall be entitled to be heard on
the motion for such Director's removal.
(2) A vacancy on the Board created by the removal of a Director under
the provisions of subparagraph (1) of this Bye-law may be filled by the Members
at the meeting at which such Director is removed and, in the absence of such
election or appointment, the Board may fill the vacancy.
19. Vacancies on the Board
(1) The Board shall have the power from time to time and at any time
to appoint any person as a Director to fill a vacancy on the Board occurring as
the result of the death, disability, disqualification or resignation of any
Director and to appoint an Alternate Director to any Director so appointed.
(2) The Board may act notwithstanding any vacancy in its number but,
if and so long as its number is reduced below the number fixed by these Bye-laws
as the quorum necessary
<PAGE> 20
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for the transaction of business at meetings of the Board, the continuing
Directors or Director may act for the purpose of (i) summoning a general meeting
of the Company or (ii) preserving the assets of the Company.
(3) The office of Director shall be vacated if the Director:-
(a) is removed from office pursuant to these Bye-laws or is
prohibited from being a Director by law;
(b) is or becomes bankrupt or makes any arrangement or
composition with his creditors generally;
(c) is or becomes of unsound mind or dies;
(d) resigns his or her office by notice in writing to the
Company.
20. Notice of meetings of the Board
(1) A Director may, and the Secretary on the requisition of a
Director shall, at any time summon a meeting of the Board.
(2) Notice of a meeting of the Board shall be deemed to be duly given
to a Director if it is given to such Director verbally in person or by telephone
or otherwise communicated or sent to such Director by post, cable, telex,
telecopier, facsimile or other mode of representing words in a legible and
non-transitory form at such Director's last known address or any other address
given by such Director to the Company for this purpose.
21. Quorum at meetings of the Board
The quorum necessary for the transaction of business at a meeting of
the Board shall be two Directors.
22. Meetings of the Board
(1) The Board may meet for the transaction of business, adjourn and
otherwise regulate its meetings as it sees fit.
(2) Directors may participate in any meeting of the Board by means of
such telephone, electronic or other communication facilities as permit all
persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such a meeting shall
constitute presence in person at such meeting.
<PAGE> 21
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(3) A resolution put to the vote at a meeting of the Board shall be
carried by the affirmative votes of a majority of the votes cast and in the case
of an equality of votes the resolution shall fail.
23. Unanimous written resolutions
A resolution in writing signed by all the Directors which may be in
counterparts, shall be as valid as if it had been passed at a meeting of the
Board duly called and constituted, such resolution to be effective on the date
on which the last Director signs the resolution. For the purposes of this
Bye-law only, "Director" shall not include an Alternate Director.
24. Contracts and disclosure of Directors' interests
(1) Any Director, or any Director's firm, partner or any company with
whom any Director is associated, may act in a professional capacity for the
Company and such Director or such Director's firm, partner or such company shall
be entitled to remuneration for professional services as if such Director were
not a Director, provided that nothing herein contained shall authorise a
Director or Director's firm, partner or such company to act as Auditor of the
Company.
(2) A Director who is directly or indirectly interested in a contract
or proposed contract or arrangement with the Company shall declare the nature of
such interest as required by the Act.
(3) Following a declaration being made pursuant to this Bye-law, and
unless disqualified by the chairman of the relevant Board meeting, a Director
may vote in respect of any contract or proposed contract or arrangement in which
such Director is interested and may be counted in the quorum at such meeting.
25. Remuneration of Directors
The remuneration, (if any) of the Directors shall be determined by the
Company in general meeting and shall be deemed to accrue from day to day. The
Directors may also be paid all travel, hotel and other expenses properly
incurred by them in attending and returning from meetings of the Board, any
committee appointed by the Board, general meetings of the Company, or in
connection with the business of the Company or their duties as Directors
generally.
<PAGE> 22
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OFFICERS
26. Officers of the Company
The Officers of the Company shall consist of a President and a Vice
President or a Chairman and a deputy Chairman, a Secretary and such additional
Officers as the Board may from time to time determine all of whom shall be
deemed to be Officers for the purposes of these bye-laws.
27. Appointment of Officers
(1) The Board shall, as soon as possible after the statutory meeting
of Members and after each annual general meeting appoint a President and Vice
President or a Chairman and Deputy Chairman who shall be Directors.
(2) The Secretary and additional Officers, if any, shall be appointed
by the Board from time to time.
28. Remuneration of Officers
The Officers shall receive such remuneration as the Board may from
time to time determine.
29. Duties of Officers
The Officers shall have such powers and perform such duties in the
management, business and affairs of the Company as may be delegated to them by
the Board from time to time.
30. Chairman of meetings
Unless otherwise agreed by a majority of those attending and entitled
to attend and vote thereat, the Chairman, if there be one, and if not the
President shall act as chairman at all meetings of the Members and of the Board
at which such person is present. In their absence the Deputy Chairman or Vice
President, if present, shall act as chairman and in the absence of all of them
a chairman shall be appointed or elected by those present at the meeting and
entitled to vote.
<PAGE> 23
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31. Register of Directors and Officers
The Board shall cause to be kept in one or more books at the
registered office of the Company a Register of Directors and Officers and shall
enter therein the particulars required by the Act.
MINUTES
32. Obligations of Board to keep minutes
(1) The Board shall cause minutes to be duly entered in books provided
for the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of
the Board and of any committee appointed by the Board; and
(c) of all resolutions and proceedings of general meetings of
the Members, meetings of the Board, meetings of managers
and meetings of committees appointed by the Board.
(2) Minutes prepared in accordance with the Act and these bye-laws
shall be kept by the Secretary at the registered office of the Company.
INDEMNITY
33. Indemnification of Directors and Officers of the Company
(1) The Directors, the Secretary and other Officers for the time being
being of the Company and the liquidator or trustees (if any) for the time being
acting in relation to any of the affairs of the Company and every one of them,
and their heirs, executors and administrators, shall be indemnified and secured
harmless out of the assets of the Company from and against all actions, costs,
charges, losses, damages and expenses which they or any of them, their heirs,
executors or administrators, shall or may incur or sustain by or by reason of
any act done, concurred in or omitted in or about the execution of their duty,
or supposed duty, or in their respective offices or trusts, and none of them
shall be answerable for the acts, receipts, neglects or defaults of the others
of them or for joining in any receipts for the sake of conformity, or for any
bankers or other persons with whom any moneys or effects belonging to the
Company shall or may be lodged or deposited for safe custody, or for
insufficiency or deficiency of any security upon which any moneys of or
belonging to the Company shall be placed out on or invested, or for any other
loss, misfortune or damage which may happen in
<PAGE> 24
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the execution of their respective offices or trusts, or in relation thereto,
PROVIDED THAT this indemnity shall not extend to any matter in respect of any
fraud or dishonesty which may attach to any of said persons.
(2) Expenses incurred in defending a civil or criminal action, suit or
proceeding shall be paid by the Company in advance of the final disposition of
such action, suit or proceeding as authorised by the Board in the specific
case upon receipt of an undertaking by or on behalf of any Director,
Secretary, Officer, Liquidator or Trustee to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the Company
as authorised in these bye-laws or otherwise pursuant to the laws of Bermuda.
34. Waiver of claim by Member
Each Member agrees to waive any claim or right of action such Member
might have, whether individually or by or in the right of the Company, against
any Director or Officer on account of any action taken by such Director or
Officer, or the failure of such Director or Officer to take any action in the
performance of his duties with or for the Company, PROVIDED THAT such waiver
shall not extend to any matter in respect of any fraud or dishonesty which may
attach to such Director or Officer.
MEETINGS
35. Notice of annual general meeting
The annual general meeting of the Company shall be held in each year
other than the year of incorporation at such time and place as the President or
the Chairman or any two Directors or any Director and the Secretary or the
Board shall appoint. At least ten (10) days notice of such meeting shall be
given to each Member stating the date, place and time at which the meeting is
to be held, that the election of Directors will take place thereat, and as far
as practicable, the other business to be conducted at the meeting.
36. Notice of special general meeting
The President or the Chairman or any two Directors or any Director and
the Secretary or the Board may convene a special general meeting of the Company
whenever in their judgment such a meeting is necessary, upon not less than five
days' notice which shall state the date, time, place and the general nature of
the business to be considered at the meeting.
<PAGE> 25
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37. Accidental omission of notice of general meeting
The accidental omission to give notice of a general meeting to, or the
non-receipt of notice of a general meeting by, any person entitled to receive
notice shall not invalidate the proceedings at that meeting.
38. Meeting called on requisition of Members
Notwithstanding anything herein, the Board shall, on the requisition
of Members holding at the date of the deposit of the requisition not less than
one-tenth of such of the paid-up share capital of the Company as at the date of
the deposit carries the right to vote at general meetings of the Company,
forthwith proceed to convene a special general meeting of the Company and the
provisions of Section 74 of the Act shall apply.
39. Short notice
A general meeting of the Company shall, notwithstanding that it is
called by shorter notice than that specified in these bye-laws, be deemed to
have been properly called if it is so agreed by (i) all the Members entitled to
attend and vote thereat in the case of an annual general meeting; and (ii) by a
majority in number of the Members having the right to attend and vote at the
meeting, being a majority together holding not less than 95% in nominal value
of the shares giving a right to attend and vote thereat in the case of a
special general meeting.
40. Postponement of meetings
The Secretary may postpone any general meeting called in accordance
with the provisions of these bye-laws (other than a meeting requisitioned under
these bye-laws) provided that notice of postponement is given to each Member
before the time for such meeting. Fresh notice of the date, time and place for
the postponed meeting shall be given to each Member in accordance with the
provisions of these bye-laws.
41. Quorum for general meeting
At any general meeting of the Company two persons present in person
and representing in person or by proxy in excess of 33% of the total issued
voting shares in the Company throughout the meeting shall form a quorum for the
transaction of business, PROVIDED that if the Company shall at any time have
only one Member, one Member present in person or by proxy shall form a quorum
for the transaction of business at any general meeting of the Company held
during such time. If within half an hour from the time appointed for the
meeting a quorum is not present, the meeting shall stand adjourned to the same
day one week later, at the same time and place or to such other day, time or
place as the Secretary may determine.
<PAGE> 26
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42. Adjournment of meetings
The chairman of a general meeting may, with the consent of the Members
at any general meeting at which a quorum is present (and shall if so directed),
adjourn the meeting. Unless the meeting is adjourned to a specific date and
time, fresh notice of the date, time and place for the resumption of the
adjourned meeting shall be given to each Member in accordance with the
provisions of these bye-laws.
43. Attendance at meetings
Members may participate in any general meeting by means of such
telephone, electronic or other communication facilities as permit all persons
participating in the meeting to communicate with each other simultaneously and
instantaneously, and participation in such a meeting shall constitute presence
in person at such meeting.
44. Written resolutions
(1) Subject to subparagraph (6), anything which may be done by
resolution of the Company in general meeting or by resolution of a meeting of
any class of the Members of the Company, may, without a meeting and without
any previous notice being required, be done by resolution in writing signed by,
or, in the case of a Member that is a corporation whether or not a company
within the meaning of the Act, on behalf of, all the Members who at the date
of the resolution would be entitled to attend the meeting and vote on the
resolution.
(2) A resolution in writing may be signed by, or, in the case of a Member
that is a corporation whether or not a company within the meaning of the Act,
on behalf of, all the Members, or any class thereof, in as many counterparts as
may be necessary.
(3) For the purposes of this Bye-law, the date of the resolution is the
date when the resolution is signed by, or, in the case of a Member that is a
corporation whether or not a company within the meaning of the Act, on behalf
of, the last Member to sign and any reference in any Bye-law to the date of
passing of a resolution is, in relation to a resolution made in accordance with
this Bye-law, a reference to such date.
(4) A resolution in writing made in accordance with this Bye-law is as
valid as if it had been passed by the Company in general meeting or by a
meeting of the relevant class of Members, as the case may be, and any reference
in any Bye-law to a meeting at which a resolution is passed or to Members
voting in favour of a resolution shall be construed accordingly.
(5) A resolution in writing made in accordance with this Bye-law shall
constitute minutes for the purposes of Sections 81 and 82 of the Act.
<PAGE> 27
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(6) This Bye-law shall not apply to:
(a) a resolution passed pursuant to Section 89(5) of the Act; or
(b) a resolution passed for the purpose of removing a Director
before the expiration of his term of office under these bye-laws.
45. Attendance of Directors
The Directors of the Company shall be entitled to receive notice of
and to attend and be heard at any general meeting.
46. Voting at meetings
(1) Subject to the provisions of the Act and these bye-laws, any
question proposed for the consideration of the Members at any general meeting
shall be decided by the affirmative votes of a majority of the votes cast in
accordance with the provisions of these bye-laws and in the case of an equality
of votes the resolution shall fail.
(2) No Member shall be entitled to vote at any general meeting unless
such Member has paid all the calls on all shares held by such Member.
47. Voting on show of hands
At any general meeting a resolution put to the vote of the meeting shall,
in the first instance, be voted upon by a show of hands and, subject to any
rights or restrictions for the time being lawfully attached to any class of
shares and subject to the provisions of these bye-laws, every Member present in
person and every person holding a valid proxy at such meeting shall be entitled
to one vote and shall cast such vote by raising his or her hand.
48. Decision of chairman
At any general meeting a declaration by the chairman of the meeting
that a question proposed for consideration has, on a show of hands, been
carried, or carried unanimously, or by a particular majority, or lost, and an
entry to that effect in a book containing the minutes of the proceedings of the
Company shall, subject to the provisions of these bye-laws, be conclusive
evidence of that fact.
49. Demand for a poll
(1) Notwithstanding the provisions of the immediately preceding two
bye-laws, at any general meeting of the Company, in respect of any
question proposed for the consideration
<PAGE> 28
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of the Members (whether before or on the declaration of the result of a show
of hands as provided for in these bye-laws), a poll may be demanded by any of
the following persons:-
(a) the chairman of such meeting; or
(b) at least three Members present in person or represented by
proxy; or
(c) any Member or Members present in person or represented by
proxy and holding between them not less than one-tenth of the
total voting rights of all the Members having the right to vote
at such meeting; or
(d) any Member or Members present in person or represented by proxy
holding shares in the Company conferring the right to vote at
such meeting, being shares on which an aggregate sum has been
paid up equal to not less than one-tenth of the total sum paid
up on all such shares conferring such right.
(2) Where, in accordance with the provisions of subparagraph (1) of this
Bye-law, a poll is demanded, subject to any rights or restrictions for the
time being lawfully attached to any class of shares, every person present at
such meeting shall have one vote for each share of which such person is the
holder or for which such person holds a proxy and such vote shall be counted
in the manner set out in sub-paragraph (4) of this Bye-Law or in the case of
a general meeting at which one or more Members are present by telephone in
such manner as the chairman of the meeting may direct and the result of such
poll shall be deemed to be the resolution of the meeting at which the poll was
demanded and shall replace any previous resolution upon the same matter which
has been the subject of a show of hands.
(3) A poll demanded in accordance with the provisions of subparagraph (1)
of this Bye-law, for the purpose of electing a chairman or on a question of
adjournment, shall be taken forthwith and a poll demanded on any other
question shall be taken in such manner and at such time and place as the
chairman may direct and any business other than that upon which a poll has
been demanded may be proceeded with pending the taking of the poll.
(4) Where a vote is taken by poll, each person present and entitled to
vote shall be furnished with a ballot paper on which such person shall record
his or her vote in such manner as shall be determined at the meeting having
regard to the nature of the question on which the vote is taken, and each
ballot paper shall be signed or initialled or otherwise marked so as to
identify the voter and the registered holder in the case of a proxy. At the
conclusion of the poll, the ballot papers shall be examined and counted by a
committee of not less than two Members or proxy holders appointed by the
chairman for the purpose and the result of the poll shall be declared by the
chairman.
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50. Seniority of joint holders voting
In the case of joint holders the vote of the senior who tenders a
vote, whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders, and for this purpose seniority shall be
determined by the order in which the names stand in the Register of Members.
51. Instrument of proxy
The instrument appointing a proxy shall be in writing under the hand
of the appointor or of the appointor's attorney duly authorised in writing, or
if the appointor is a corporation, either under its seal, or under the hand of
a duly authorised officer or attorney. The decision of the chairman of any
general meeting as to the validity of any instrument of proxy shall be final.
52. Representation of corporations at meetings
A corporation which is a Member may, by written instrument, authorise
such person as it thinks fit to act as its representative at any meeting of the
Members and the person so authorised shall be entitled to exercise the same
powers on behalf of the corporation which such person represents as that
corporation could exercise if it were an individual Member. Notwithstanding the
foregoing, the chairman of the meeting may accept such assurances as he or she
thinks fit as to the right of any person to attend and vote at general meetings
on behalf of a corporation which is a Member.
53. Variation of rights, alteration of share capital and purchase of shares of
the Company
(1) Subject to the provisions of Sections 42 and 43 of the Act any
preference shares may be issued or converted into shares that, at a
determinable date or at the option of the Company, are liable to be redeemed on
such terms and in such manner as the Company before the issue or conversion may
by resolution of the Members determine.
(2) If at any time the share capital is divided into different classes
of shares, the rights attached to any class (unless otherwise provided by the
terms of issue of the shares of that class) may, whether or not the Company is
being wound-up, be varied with the consent in writing of the holders of
three-fourths of the issued shares of that class or with the sanction of a
resolution passed by a majority of the votes cast at a separate general meeting
of the holders of the shares of the class in accordance with Section 47 (7) of
the Act. The rights conferred upon the holders of the shares of any class
issued with preferred or other rights shall not, unless otherwise expressly
provided by the terms of issue of the shares of that class, be deemed to be
varied by the creation or issue of further shares ranking pari passu therewith.
<PAGE> 30
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(3) The Company may from time to time by resolution of the Members
change the currency denomination of, increase, alter or reduce its share
capital in accordance with the provisions of Sections 45 and 46 of the Act.
Where, on any alteration of share capital, fractions of shares or some other
difficulty would arise, the Board may deal with or resolve the same in such
manner as it thinks fit including, without limiting the generality of the
foregoing, the issue to Members, as appropriate, of fractions of shares and/or
arranging for the sale or transfer of the fractions of shares of Members.
(4) The Company may from time to time purchase its own shares in
accordance with the provisions of Section 42A of the Act.
54. Registered holder of shares
(1) The Company shall be entitled to treat the registered holder of
any share as the absolute owner thereof and accordingly shall not be bound to
recognise any equitable or other claim to, or interest in, such share on the
part of any other person.
(2) Any dividend, interest or other moneys payable in cash in respect
of shares may be paid by cheque or draft sent through the post directed to the
Member at such Member's address in the Register of Members or, in the case of
joint holders, to such address of the holder first named in the Register of
Members, or to such person and to such address as the holder or joint holders
may in writing direct. If two or more persons are registered as joint holders
of any shares any one can give an effectual receipt for any dividend paid in
respect of such shares.
55. Death of a joint holder
Where two or more persons are registered as joint holders of a share or
shares then in the event of the death of any joint holder or holders the
remaining joint holder or holders shall be absolutely entitled to the said
share or shares and the Company shall recognise no claim in respect of the
estate of any joint holder except in the case of the last survivor of such
joint holders.
56. Share certificates
(1) Every Member shall be entitled to a certificate under the seal of
the Company (or a facsimile thereof) specifying the number and, where
appropriate, the class of shares held by such Member and whether the same are
fully paid up and, if not, how much has been paid thereon. The Board may by
resolution determine, either generally or in a particular case, that any or all
signatures on certificates may be printed thereon or affixed by mechanical
means.
<PAGE> 31
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(2) Each certificate issued in respect of the Common Shares shall bear
the following legend endorsed thereon:-
"The securities of Intelligent Polymers Limited, a Bermuda company
("Intelligent Polymers") evidenced hereby are subject to an option of the
holder or holders of a majority of the Special Shares of Intelligent Polymers,
as described in the bye-laws of Intelligent Polymers, to purchase such
securities at an agreed upon price, exercisable by notice at any time beginning
on the closing date of the Unit Offering and ending on the earlier of (i)
September 30, 2002 and (ii) the 90th day after the date that Intelligent
Polymers provides such holder or holders with quarterly financial statements of
Intelligent Polymers showing cash or cash equivalents of less than US$4
million. Copies of the bye-laws of Intelligent Polymers are available at the
registered office of Intelligent Polymers at Clarendon House, 2 Church Street,
Hamilton, Bermuda, and will be furnished to any shareholder of Intelligent
Polymers on request and without cost.
Until October , 1999 or such earlier date as the Purchase Option is
exercised or expires unexercised (the "Separation Date"), the shares
represented by this Certificate may be traded, exchanged or otherwise
transferred only together with the Warrant of Biovail Corporation International
issued herewith. The holder hereof may, but need not, submit this Certificate
for the removal of this legend after the Separation Date."
(3) The Company shall be under no obligation to complete and deliver a
share certificate unless specifically called upon to do so by the person to
whom such shares have been allotted.
(4) If any such certificate shall be proved to the satisfaction of the
Board to have been worn out, lost, mislaid or destroyed the Board may cause a
new certificate to be issued and request an indemnity for the lost certificate
if it sees fit.
57. Calls on shares
(1) The Board may from time to time make such calls as it thinks fit
upon the Members in respect of any monies unpaid on the shares allotted to or
held by such Members and, if a call is not paid on or before the day appointed
for payment thereof, the Member may at the discretion of the Board be liable to
pay the Company interest on the amount of such call at such rate as the Board
may determine, from the date when such call was payable up to the actual date
of payment. The joint holders of a share shall be jointly and severally liable
to pay all calls in respect thereof.
(2) The Board may, on the issue of shares, differentiate between the
holders as to the amount of calls to be paid and the times of payment of such
calls.
<PAGE> 32
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58. Forfeiture of shares
(1) If any Member fails to pay, on the day appointed for payment
thereof, any call in respect of any share allotted to or held by such Member,
the Board may, at any time thereafter during such time as the call remains
unpaid, direct the Secretary to forward to such Member a notice of forfeiture
for non-payment of call..
(2) If the requirements of such notice are not complied with, any such
share may at any time thereafter before the payment of such call and the
interest due in respect thereof be forfeited by a resolution of the Board to
that effect, and such share shall thereupon become the property of the Company
and may be disposed of as the Board shall determine.
(3) A Member whose share or shares have been forfeited as aforesaid
shall, notwithstanding such forfeiture, be liable to pay to the Company all
calls owing on such share or shares at the time of the forfeiture and all
interest due thereon.
REGISTER OF MEMBERS
59. Contents of Register of Members
The Board shall cause to be kept in one or more books a Register of
Members and shall enter therein the particulars required by the Act.
60. Inspection of Register of Members
The Register of Members shall be open to inspection at the registered
office of the Company on every business day, subject to such reasonable
restrictions as the Board may impose, so that not less than two hours in each
business day be allowed for inspection. The Register of Members may, after
notice has been given by advertisement in an appointed newspaper to that
effect, be closed for any time or times not exceeding in the whole thirty days
in each year.
61. Determination of record dates
Notwithstanding any other provision of these bye-laws, the Board may fix
any date as the record date for:
(a) determining the Members entitled to receive any dividend; and
(b) determining the Members entitled to receive notice of and to
vote at any general meeting of the Company.
<PAGE> 33
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TRANSFER OF SHARES
62. Instrument of transfer
(1) An instrument of transfer shall be in the usual common form or in
such other form as the Board may accept. Such instrument of transfer shall be
signed by or on behalf of the transferor and transferee provided that, in the
case of a fully paid share, the Board and/or the Company's duly appointed
Registrar and Transfer Agent may accept the instrument signed by or on behalf
of the transferor alone. The transferor shall be deemed to remain the holder of
such share until the same has been transferred to the transferee in the
Register of Members.
(2) The Board and/or the Company's duly appointed Registrar and
Transfer Agent may refuse to recognise any instrument of transfer unless it is
accompanied by the certificate in respect of the shares to which it relates and
by such other evidence as the Board may reasonably require to show the right of
the transferor to make the transfer.
63. Transfers by joint holders
The joint holders of any share or shares may transfer such share or
shares to one or more of such joint holders, and the surviving holder or
holders of any share or shares previously held by them jointly with a deceased
Member may transfer any such share to the executors or administrators of such
deceased Member.
TRANSMISSION OF SHARES
64. Representative of deceased Member
In the case of the death of a Member, the survivor or survivors where
the deceased Member was a joint holder, and the legal personal representatives
of the deceased Member where the deceased Member was a sole holder, shall be
the only persons recognised by the Company as having any title to the deceased
Member's interest in the shares. Nothing herein contained shall release the
estate of a deceased joint holder from any liability in respect of any share
which had been jointly held by such deceased Member with other persons. Subject
to the provisions of Section 52 of the Act, for the purpose of this Bye-law,
legal personal representative means the executor or administrator of a deceased
Member or such other person as the Board may in its absolute discretion decide
as being properly authorised to deal with the shares of a deceased Member.
<PAGE> 34
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65. Registration on death or bankruptcy
Any person becoming entitled to a share in consequence of the death or
bankruptcy of any Member may be registered as a Member upon such evidence as
the Board may deem sufficient or may elect to nominate some person to be
registered as a transferee of such share, and in such case the person becoming
entitled shall execute in favour of such nominee an instrument of transfer in
the usual common form. On the presentation thereof to the Board, accompanied by
such evidence as the Board may require to prove the title of the transferor,
the transferee shall be registered as a Member but the Board shall, in either
case, have the same right to decline or suspend registration as it would have
had in the case of a transfer of the share by that Member before such Member's
death or bankruptcy, as the case may be.
DIVIDENDS AND OTHER DISTRIBUTIONS
66. Declaration of dividends by the Board
The Board may, subject to these bye-laws and in accordance with Section
54 of the Act, declare a dividend to be paid to the Members, in proportion to
the number of shares held by them, and such dividend may be paid in cash or
wholly or partly in specie in which case the Board may fix the value for
distribution in specie of any assets.
67. Other distributions
The Board may declare and make such other distributions (in cash or in
specie) to the Members as may be lawfully made out of the assets of the
Company.
68. Reserve fund
The Board may from time to time before declaring a dividend set aside,
out of the surplus or profits of the Company, such sum as it thinks proper as a
reserve fund to be used to meet contingencies or for equalising dividends or
for any other special purpose.
69. Deduction of Amounts due to the Company
The Board may deduct from the dividends or distributions payable to
any Member all monies due from such Member to the Company on account of calls
or otherwise.
<PAGE> 35
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CAPITALISATION
70. Issue of bonus shares
(1) The Board may resolve to capitalise any part of the amount for the
time being standing to the credit of any of the Company's share premium or
other reserve accounts or to the credit of the profit and loss account or
otherwise available for distribution by applying such sum in paying up unissued
shares to be allotted as fully paid bonus shares pro rata to the Members.
(2) The Company may capitalise any sum standing to the credit of a
reserve account or sums otherwise available for dividend or distribution by
applying such amounts in paying up in full partly paid shares of those Members
who would have been entitled to such sums if they were distributed by way of
dividend or distribution.
ACCOUNTS AND FINANCIAL STATEMENTS
71. Records of account
The Board shall cause to be kept proper records of account with
respect to all transactions of the Company and in particular with respect to:-
(a) all sums of money received and expended by the Company and the
matters in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) the assets and liabilities of the Company.
Such records of account shall be kept at the registered office of the Company
or, subject to Section 83 (2) of the Act, at such other place as the Board
thinks fit and shall be available for inspection by the Directors during normal
business hours.
72. Financial year end
The financial year end of the Company may be determined by resolution
of the Board and failing such resolution shall be 31st December in each year.
73. Financial statements
Subject to any rights to waive laying of accounts pursuant to Section
88 of the Act, financial statements as required by the Act shall be laid before
the Members in general meeting.
<PAGE> 36
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AUDIT
74. Appointment of Auditor
Subject to Section 88 of the Act, at the annual general meeting or at
a subsequent special general meeting in each year, an independent
representative of the Members shall be appointed by them as Auditor of the
accounts of the Company. Such Auditor may be a Member but no Director, Officer
or employee of the Company shall, during his or her continuance in office, be
eligible to act as an Auditor of the Company.
75. Remuneration of Auditor
The remuneration of the Auditor shall be fixed by the Company in
general meeting or in such manner as the Members may determine.
76. Vacation of office of Auditor
If the office of Auditor becomes vacant by the resignation or death of
the Auditor, or by the Auditor becoming incapable of acting by reason of
illness or other disability at a time when the Auditor's services are required,
the Board shall, as soon as practicable, convene a special general meeting to
fill the vacancy thereby created.
77. Access to books of the Company
The Auditor shall at all reasonable times have access to all books
kept by the Company and to all accounts and vouchers relating thereto, and the
Auditor may call on the Directors or Officers of the Company for any
information in their possession relating to the books or affairs of the
Company.
78. Report of the Auditor
(1) Subject to any rights to waive laying of accounts or appointment
of an Auditor pursuant to Section 88 of the Act, the accounts of the Company
shall be audited at least once in every year.
(2) The financial statements provided for by these bye-laws shall be
audited by the Auditor in accordance with generally accepted auditing
standards. The Auditor shall make a written report thereon in accordance with
generally accepted auditing standards and the report of the Auditor shall be
submitted to the Members in general meeting.
(3) The generally accepted auditing standards referred to in
subparagraph (2) of this Bye-law may be those of a country or jurisdiction
other than Bermuda. If so, the financial
<PAGE> 37
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statements and the report of the Auditor must disclose this fact and name
such country or jurisdiction.
NOTICES
79. Notices to Members of the Company
A notice may be given by the Company to any Member either by
delivering it to such Member in person or by sending it to such Member's
address in the Register of Members or to such other address given for the
purpose. For the purposes of this Bye-law, a notice may be sent by mail,
courier service, cable, telex, telecopier, facsimile or other mode of
representing words in a legible and non-transitory form.
80. Notices to joint Members
Any notice required to be given to a Member shall, with respect to any
shares held jointly by two or more persons, be given to whichever of such
persons is named first in the Register of Members and notice so given shall be
sufficient notice to all the holders of such shares.
81. Service and delivery of notice
Any notice shall be deemed to have been served at the time when the
same would be delivered in the ordinary course of transmission and, in proving
such service, it shall be sufficient to prove that the notice was properly
addressed and prepaid, if posted, and the time when it was posted, delivered to
the courier or to the cable company or transmitted by telex, facsimile or other
method as the case may be.
SEAL OF THE COMPANY
82. The seal
The seal of the Company shall be in such form as the Board may from
time to time determine. The Board may adopt one or more duplicate seals for use
outside Bermuda.
83. Manner in which seal is to be affixed
The seal of the Company shall not be affixed to any instrument except
attested by the signature of a Director and the Secretary or any two Directors,
or some other person appointed by the Board for the purpose, provided that any
Director, or Officer, may affix the seal of the Company attested by such
Director or Officer's signature only to any authenticated copies of
<PAGE> 38
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these Bye-laws, the incorporating documents of the Company, the minutes of any
meetings or any other documents required to be authenticated by such Director
or Officer.
WINDING-UP
84. Winding-up/distribution by liquidator
If the Company shall be wound up the liquidator may, with the sanction
of a resolution of the Members, divide amongst the Members in specie or in kind
the whole or any part of the assets of the Company (whether they shall consist
of property of the same kind or not) and may, for such purpose, set such value
as he or she deems fair upon any property to be divided as aforesaid and may
determine how such division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like sanction, vest
the whole or any part of such assets in trustees upon such trusts for the
benefit of the Members as the liquidator shall think fit, but so that no Member
shall be compelled to accept any shares or other securities or assets whereon
there is any liability.
ALTERATION OF BYE-LAWS
85. Alteration of Bye-laws
Subject to the provisions of Bye-law 3 hereof, no Bye-law shall be
rescinded, altered or amended and no new Bye-law shall be made until the same
has been approved by a resolution of the Board and by a resolution of the
Members.
<PAGE> 1
EXHIBIT 4.2
WARRANT AGREEMENT
WARRANT AGREEMENT (the "AGREEMENT'), dated as of October __,
1997, between Biovail Corporation International (the "COMPANY"), a corporation
organized and existing under the laws of Ontario, Canada and Chase Mellon
Shareholder Services, L.L.C., a New Jersey limited liability company (the
"WARRANT AGENT"), in favor of each of the persons (each a "HOLDER") who
acquires from time to time warrants to purchase the Company's common shares, no
par value (the "COMMON SHARES"), issued in the offering of units (collectively,
the "UNITS"), each Unit consisting of one warrant to purchase one Common Share
(each, a "WARRANT" and collectively, the "WARRANTS") and one common share, par
value $.01 per share, of Intelligent Polymers Limited, a corporation organized
and existing under the laws of Bermuda (the "INTELLIGENT POLYMERS COMMON
SHARES"), made pursuant to a Registration Statement on Form F-1/F-3 (Nos.
333-35833 and 333-35839) (the "REGISTRATION STATEMENT") filed by the Company
and Intelligent Polymers Limited with the Securities and Exchange Commission
(the "SEC").
THE PARTIES AGREE IN FAVOR OF EACH HOLDER AS FOLLOWS:
Until September 30, 1999 or such earlier date as the Purchase
Option (as defined in the Registration Statement) is exercised or expires
unexercised (the "Separation Date"), each Warrant shall be evidenced by a unit
certificate (the "UNIT CERTIFICATE") in the form filed as Exhibit 4.4 to the
Registration Statement. On or immediately after the Separation Date, the
Warrant Agent will issue to each Holder a certificate, representing a warrant
certificate, such warrant certificate to be substantially in the form attached
hereto as Exhibit A (each, a "WARRANT CERTIFICATE"; it being understood that
prior to the Separation Date, the term "Warrant Certificate" shall mean the
Unit Certificate). Each Holder, upon execution of a Warrant Certificate by the
Company and the countersignature by the Warrant Agent, shall be entitled to
purchase from the Company, subject to the provisions of this Agreement, the
number of Common Shares (collectively, the "WARRANT SHARES") as shall equal the
number of Common Shares indicated in the Warrant Certificate issued to such
Holder. The Warrant shall be exercisable at any time from October 1, 1999 (the
"EXERCISE COMMENCEMENT DATE") through September 30, 2002 (the "EXERCISE
PERIOD") at the exercise price per Common Share of $_____ (the "EXERCISE
PRICE").
The number of Warrant Shares to be received upon exercise of
the Warrants and payment of the Exercise Price shall be adjusted from time to
time as set forth in Section 8 of this Agreement. The Warrants will
additionally be subject to the following terms and conditions:
1. Execution for Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by its President and
Chief Executive Officer or any Vice President and by its Secretary, either
manually or by facsimile signature printed thereon. The
<PAGE> 2
2
Warrant Certificates shall be manually countersigned and dated the date of
countersignature by the Warrant Agent and shall not be valid for any purpose
unless so countersigned and dated. In case any authorized officer of the
Company who shall have signed any of the Warrant Certificates shall cease to be
such officer of the Company either before or after delivery thereof by the
Company to the Warrant Agent, the signature of such officer on such Warrant
Certificates, nevertheless, shall be valid and such Warrant Certificates may be
countersigned by the Warrant Agent, and issued and delivered to those persons
entitled to receive the Warrants represented thereby with the same force and
effect as though the person who signed such Warrant Certificates had not ceased
to be such officer of the Company.
2. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth herein, and the Warrant Agent hereby accepts such
appointment, upon the terms and conditions hereinafter set forth.
3. Appointment of Transfer Agent and Registrar. The Company
hereby appoints the Warrant Agent to be the Transfer Agent and Registrar of the
Unit Certificates and the Warrant Agent agrees to act as Transfer Agent and
Registrar of the Unit Certificates until the Separation Date. After the
Separation Date, the Warrant Agent will act as Warrant Agent for the Warrants
pursuant to this Agreement.
4. Exercise of Warrants. Subject to the terms and conditions
hereof, the Warrants may be exercised by the Holder thereof, in whole or in
increments of 10 Common Shares, on any business day beginning on the Exercise
Commencement Date, or if such date is not a business day, then on the next
succeeding business day, by presentation and surrender of the Warrant
Certificates at the office of the Warrant Agent with the ELECTION TO PURCHASE
(set forth on the reverse side of the Warrant Certificate) properly completed
and duly executed and accompanied by payment, by certified or official bank
check, payable to the order of the Company, of an amount in United States
dollars equal to the then current Exercise Price for the number of Warrant
Shares specified in such Election to Purchase. The applicable fees of the
Warrant Agent, in connection with such exercise shall be paid by the Company.
If the Warrants are exercised for less than the total number of Warrant Shares
evidenced by the Warrant Certificate, promptly after presentation of the
Warrant Certificate upon such exercise, the Warrant Agent shall execute and
deliver a new Warrant Certificate, dated the date hereof, evidencing the rights
of the Holder to purchase the balance of the Warrant Shares purchasable
hereunder upon the same terms and conditions herein set forth. Upon and as of
receipt by the Warrant Agent of the Warrant Certificate with a properly
completed and duly executed Election to Purchase accompanied by payment of the
Exercise Price as herein provided and upon receipt by the Warrant Agent from
the Company of the appropriate amount of Common Shares represented by such
Warrant Shares purchasable upon the exercise of the Warrant, the Holder shall
be deemed to be the holder of record of the Common Shares issuable upon such
exercise, notwithstanding that the share transfer books of the Company may then
be closed or that
<PAGE> 3
3
certificates representing such Common Shares may not then actually be delivered
to the Holder. Each Warrant not exercised prior to 5:00 p.m., New York City
time, on September 30, 2002 (the "EXPIRATION DATE"), shall become void, and all
rights hereunder and under the applicable Warrant Certificate(s) and all rights
in respect thereof under this Agreement shall cease as of such time. Subsequent
to the proper exercise of the Warrant(s) by the Holder, the Warrant Agent shall
promptly transfer to the Holder appropriate evidence of ownership of the
Warrant Shares or other securities or property to which the Holder is entitled,
registered or otherwise placed in, or payable to the order of, such name or
names as may be directed in writing by the Holder, and shall promptly deliver
such evidence of ownership of any other securities or property to the person or
persons entitled to receive such items. The term "business day" as used in this
Agreement shall mean any day other than a Saturday, Sunday or a day on which
federal or state chartered banking institutions in New York City, New York are
authorized or required by law to close.
5. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the original issuance of the Warrants and of the
Common Shares issuable upon the exercise of the Warrants; provided, however,
that the Company shall not be required to (a) pay any tax which may be payable
in respect of any transfer involved in the transfer and delivery of the Warrant
Certificates or the issuance or delivery of certificates for Warrant Shares in
a name other than that of the registered holder of the Warrant Certificate
surrendered upon the exercise of a Warrant or (b) issue or deliver any
certificate for Warrant Shares upon the exercise of any Warrants until any such
tax required to be paid under clause (a) shall have been paid, all such tax
being payable by the holder of such Warrant at the time of surrender.
6. Reservation of Warrant Shares. The Company shall, at all
times from the Exercise Commencement Date until the Expiration Date, reserve
for issuance and delivery upon exercise of the Warrants the number of Common
Shares as shall be required for issuance and delivery upon exercise of the
Warrants. All such shares shall be duly authorized and, when issued upon such
exercise, shall be validly issued, fully paid and nonassessable,
freely-tradeable and free and clear of all liens, security interests, charges
and other encumbrances or restrictions on sale and free and clear of all
preemptive rights. The Warrant Agent is hereby irrevocably authorized to
requisition from time to time Common Share share certificates issuable upon the
exercise of outstanding Warrants. The Company will supply its transfer agent
with duly executed share certificates for such purpose. All Warrants
surrendered upon exercise shall be canceled by the Warrant Agent and shall
thereafter be delivered to the Company or otherwise disposed of in a manner
satisfactory to the Company. Unless all Warrants shall have been exercised
prior to 5:00 p.m., New York time, on the Expiration Date, the Warrant Agent
shall certify to the Company, as of the close of business on the Expiration
Date, the total aggregate amount of Warrants then outstanding, and thereafter
no shares of Common Shares shall be subject to reservation in respect of such
Warrants. The Company shall keep a copy of this Agreement on file with its
transfer agent and with every transfer agent for any Common Shares.
<PAGE> 4
4
7. Market Price of Shares. For purposes of this
Agreement, the market price (the "MARKET PRICE") of the Common Shares for the
relevant day or days shall be determined by the Company as follows:
(a) if the Common Shares are listed on any United States
national securities exchanges or admitted to unlisted trading
privileges on any such exchanges, the Market Price shall be the
average of the closing prices of the Common Shares on the principal
exchange on which such shares are listed or admitted to unlisted
trading privileges over the five trading days immediately preceding
the applicable date; or
(b) if the Common Shares are quoted on the National Market
System of the National Association of Securities Dealers Inc.
Automatic Quotation System ("NASDAQ"), the Market Price shall be the
average of the last sale prices of the Common Shares as reported on
the Nasdaq National Market System, or, if the Common Shares are not
included in the Nasdaq National Market System, the average of the bid
prices for the Common Shares as reported on the Nasdaq quotation
system, in either case over the five trading days immediately
preceding the applicable date; or
(c) if the Common Shares are not so quoted on Nasdaq or
listed on any United States national securities exchange or admitted
to unlisted trading privileges, the Market Price of the Common Shares
shall be an amount representing the fair market value of the Common
Shares as determined in good faith by the Board of Directors of the
Company.
8. Adjustments.
(a) Stock Dividends; etc. If after the date hereof the number
of outstanding Common Shares is increased by a stock dividend payable in Common
Shares of the Company or by an allotment of Common Shares or other securities
of the Company made to Holders of Common Shares by way of a capitalization of
reserves or subdivision of Common Shares or by a reclassification of Common
Shares then, from and after the day following the record date for such share
dividend or allotment or reclassification, the number of Warrant Shares
issuable upon exercise of the Warrants shall be increased in proportion to such
increase in outstanding Common Shares of the Company and the then applicable
Exercise Price shall be correspondingly decreased.
(b) Aggregation of Shares. If, after the date hereof, the
number of outstanding Common Shares of the Company is decreased by a
consolidation or reclassification of Common Shares of the Company, then, from
and after the record date for such consolidation or reclassification, the
number of Warrant Shares issuable upon exercise of the Warrants shall be
decreased in proportion to such decrease in Common Shares of the Company and
the then applicable Exercise Price shall be correspondingly increased.
<PAGE> 5
5
(c) Special Dividends. If (other than in a dissolution or
liquidation) securities of the Company (other than the Common Shares) or assets
(other than cash dividends payable out of retained earnings) are issued by way
of a dividend on outstanding Common Shares of the Company as of a record date,
then the Exercise Price shall be adjusted so that it shall equal the price
determined by multiplying the Exercise Price in effect immediately prior to the
close of business on such record date by a fraction, the numerator of which
shall be the Market Price on such record date less then fair market value (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive) of the securities or assets distributed applicable to one Common
Share, and the denominator of which shall be such Market Price. Such
adjustments shall become effective immediately prior to the opening of business
on the day following such record date.
(d) Reorganization, etc. If there shall be effected any
amalgamation or merger of the Company with another corporation, other entity or
any sale of all or substantially all of the Company's assets to another entity
in which holders of Common Shares will receive in exchange for their Common
Shares other securities or assets, then, as a condition to the closing of such
amalgamation, merger, or sale, lawful and fair provision shall be made whereby
the Holders thereafter shall have the right to purchase and receive, upon the
basis and upon the terms and conditions specified in the Warrants and in lieu
of the Warrant Shares issuable upon exercise of the Warrants, such shares of
stock, securities, or assets as may be issued or payable with respect to or in
exchange for the number of Warrant Shares issuable upon the exercise of the
Warrants prior to the closing of such amalgamation, merger or sale. In any such
case appropriate provision shall be made with respect to the rights and
interests of the Holders to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Exercise Price and of the
number of Warrant Shares purchasable upon the exercise of the Warrants) shall
thereafter be applicable, as nearly as may be practicable, in relation to any
share of stock, securities, or assets thereafter deliverable upon the exercise
hereof. The Company shall not effect any such amalgamation, merger, or sale
unless prior to the consummation thereof the successor entity (if other than
the Company) resulting from such amalgamation or merger, or the entity
purchasing such assets, shall assume by written instrument executed and
delivered to the Warrant Agent the obligation to deliver to the Holders such
shares of stock, securities, or assets as, in accordance with the foregoing
provisions, such Holders may be entitled to purchase.
(e) Limitations. Anything in this Section 8 to the contrary
notwithstanding, adjustments in the number of Warrant Shares issuable on
exercise of Warrants shall be made only to the nearest one-tenth on a Common
Share.
(f) Readjustments; etc. If an adjustment is made under
paragraph (a), (b), (c) or (d) above, and the event to which the adjustment
relates does not occur, then any adjustments in the Exercise Price or Warrant
Shares that were made in accordance with such paragraphs shall
<PAGE> 6
6
be adjusted back to the Exercise Price and the number of Warrant Shares that
were in effect immediately prior to the record date for such event.
(g) No Adjustments to Exercise Price. No adjustment in the
Exercise Price in accordance with the provisions of paragraph (a), (b), (c) or
(d) above need be made if such adjustment would amount to a change in such
Exercise Price of less than $.05; provided, however, that the amount by which
any adjustment is not made by reason of the provisions of this Section 8 shall
be carried forward and taken into account at the time of any subsequent
adjustment in the Exercise Price.
(h) Form of Warrant Certificate. The form of Warrant
Certificate need not be changed as a result of any change pursuant to this
Section 8, and any Warrant Certificate issued after such change may state the
same Exercise Price and the same number of Warrant Shares as is stated in the
Warrant Certificate initially issued pursuant to this Agreement.
Notwithstanding the foregoing, the Company shall have the right at any time
from time to time in its sole discretion (which shall be conclusive) to make
any change in the Warrant Certificate that the Company may deem appropriate and
that does not affect the substance thereof; and any Warrant Certificate
thereafter issued or countersigned, whether in exchange or substitution for an
outstanding Warrant or otherwise, may be in the form as so changed.
(i) Notice of Adjustment in Warrant. Upon any adjustment of
the Exercise Price or the number of Warrant Shares issuable on exercise of the
Warrants, then in each such case, the Company shall give written notice thereof
to the Warrant Agent, which notice shall state the Exercise Price resulting
from such adjustment and the increase or decrease, if any, in the number of
Warrant Shares purchasable at such price upon the exercise of a Warrant,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based. The Company shall also mail such notice to the
Holders at their addresses registered with the Company or the Warrant Agent.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of the subject adjustments.
(j) Certificate of Independent Public Accounts. The Company
may retain a firm of independent public accountants of recognized standing
(which may be any such firm regularly employed by the Company) to make any
computation required under this Section 8, and a certificate signed by such
firm shall be conclusive evidence of the correctness of the computation made
under this Section 8.
9. Voluntary Adjustment by the Company. The Company may at
its option, at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company, including such reductions
in the Exercise Price as the Company considers to be advisable in order that
any event treated for income tax purposes as a dividend of share or share
rights shall not be taxable to the recipients.
<PAGE> 7
7
10. No Rights as Stockholders; Notices.
(a) No Rights as Stockholders. Nothing contained in this
Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the Holders, as such, the right to vote or to consent or to
receive notice as shareholders in respect of the meetings of shareholders or
the election of directors of the Company or any other matter, or any rights
whatsoever, at law or in equity, as shareholders of the Company.
(b) Notice Requirements. In the event that:
(i) the Company shall take action to make any distribution
(other than cash dividends payable out of accumulated earnings, as
indicated on the most recent quarterly balance sheet of the Company,
and dividends or distributions payable in Common Shares) to the
holders of Common Shares;
(ii) the Company shall take action to offer for subscription
pro rata to the holders of Common Shares any additional shares of any
class or other rights or securities convertible into Common Shares;
(iii) the Company shall take action to accomplish any capital
reorganization, or reclassification of the share capital of the
Company (other than a share dividend, allotment, subdivision or
consolidation covered by Sections 8(a) or 8(b)) or amalgamation or
merger to which the Company is a party and for which approval of any
shareholders of the Company is required, or sale of all or
substantially all of its assets to another corporation; or
(iv) the Company shall take action looking to a voluntary or
involuntary dissolution, liquidation, or winding up of the Company;
then, in any one or more of such cases, the Company shall (A) at least 10 days
prior to the record date or expected record date for any such distribution or
subscription rights or at least 10 days prior to the record date or expected
record date for determining rights to vote in respect of any such amalgamation,
merger, sale, dissolution, liquidation or winding up, cause written notice
thereof to be sent by first-class mail or by reputable overnight delivery
service or courier, postage prepaid, to the Warrant Agent and each Holder at
its address appearing in the records of the Warrant Agent or the Company, and
(B) in the case of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up, cause at least 10 days'
prior written notice of the date or expected date when the same shall take
place to be given to the Warrant Agent and each Holder in the same manner. Such
notice in accordance with the foregoing clause (A) shall also specify, in the
case of any such distribution or subscription rights, the date or expected date
on which the holders of Common Shares shall be entitled thereto, and such in
accordance with the foregoing clause (B) shall also specify the
<PAGE> 8
8
date or expected date on which the holders of Common Shares shall be entitled
to exchange their Common Shares for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be. Failure to mail
such notice, or any defect therein, shall not affect the legality or validity
or any of the matters set forth in the foregoing clauses (i) through (iv). The
notice herein required shall not confer upon any Holder the right to exercise
the Warrants before the Exercise Commencement Date.
11. Transfer, Exchange, Assignment or Loss of Warrant
Certificate.
(a) Transferability. The Warrants may be transferred, in
whole or in part, subject to the following restrictions:
(i) The Warrants may not be transferred separately from the
Intelligent Polymers Common Shares with which the Warrants were issued
as units until the Separation Date and the Warrants shall be
transferred separately from the Intelligent Polymers Common Shares
after the Separation Date. Requests for transfer of the Warrants
before the Separation Date shall be forwarded to the Warrant Agent.
(ii) The Warrants, the Warrant Shares and any other
securities received pursuant to this Agreement or the Warrants shall
be subject to any restrictions on transferability provided by federal
and state securities laws.
(b) Transfer Conditions. Any transfer permitted hereunder
shall be made by surrender of the Warrant Certificate to the Warrant Agent at
its offices with the FORM OF TRANSFER (on the reverse side of the Warrant
Certificate) properly completed and duly executed and accompanied by funds
sufficient to pay any transfer taxes applicable. Upon satisfaction of all
transfer conditions, the Warrant Agent shall, without charge, execute and
deliver a new Warrant Certificate in the name of the transferee named in such
Form of Transfer and the transferred Warrant Certificate shall be promptly
cancelled.
(c) Loss of Certificates. Upon receipt by the Warrant Agent
of evidence satisfactory to it of loss, theft, destruction or mutilation of the
Warrant Certificate and, in the case of loss, theft or destruction, upon
receipt of an indemnity bond satisfactory to the Warrant Agent (obtained by the
Holder at the Holder's expense) or, in the case of mutilation, upon surrender
of the Warrant Certificate, the Warrant Agent shall execute and deliver a new
Warrant Certificate of like tenor and date and any such lost, stolen, destroyed
or mutilated Warrant Certificate thereupon shall become void.
(d) Indemnity. Each holder of the Warrants and the Warrant
Shares shall indemnify and hold harmless the Company, its directors and
officers, and each other person, if any, who controls the Company, against any
losses, claims, damages or liabilities, joint or
<PAGE> 9
9
several, to which the Company or any such director, officer or any such person
may become subject under the Securities Act of 1933, as amended (the "ACT"), or
any statute or common law, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or are based upon the
disposition by such holder of the Warrant or the Warrant Shares in violation of
the Warrant Certificate or this Agreement.
12. Transfer Agent and Registrar of Unit Certificates. The
Warrant Agent shall keep, at its office at its Corporate Trust Office, 450 West
33rd Street, New York, New York 10001, a Unit Register in which, subject to
such reasonable regulations as the Warrant Agent may prescribe, it shall
register the names and addresses of Holders of Units evidenced by Unit
Certificates in registered form and the certificate numbers and denominations
of such Unit Certificates. The Warrant Agent shall also register in the Unit
Register all exchanges and transfers of Units evidenced by Unit Certificates.
At the Separation Date or as soon thereafter as practicable,
the Warrant Agent shall make appropriate notations in the Unit Register to
reflect the expiration of the Units and shall take such steps as it deems
necessary or desirable to close the Unit Register. The Unit Register shall be
in written form or in any other form capable of being converted into written
form within a reasonable time. The Warrant Agent shall provide the Company and
Intelligent Polymers Limited with access to the Unit Register during normal
business hours and, if so requested by the Company or Intelligent Polymers
Limited, shall promptly provide them with a copy of the Unit Register.
13. Registration of Warrants and Warrant Shares.
(a) Registration of Warrants. The Warrants have been
registered under the Act pursuant to the Registration Statement on Forms F-1
and F-3 (Registration Nos. 333-35833 and 333-35839), as declared effective by
the SEC on October , 1997, and the securities and blue sky laws of certain
states.
(b) Filings with the SEC and Registration of the Warrant
Shares. The Company covenants and agrees: No later than October 1, 1999, the
Company shall file a registration statement covering the Warrant Shares
issuable upon exercise of the Warrants, use its best efforts to cause such
registration statement to be declared effective by the SEC and use its best
efforts to register or qualify the Warrant Shares issuable upon exercise of the
Warrants under the securities or Blue Sky laws of each U.S. jurisdiction in
which such registration or qualification is necessary, provided that the
Company shall not be required to (i) qualify to do business as a broker-dealer
in any jurisdiction where it is not then so qualified or (ii) take any action
which would subject it to general service of process or to taxation in any
jurisdiction where it is not then so subject. The Company shall use its best
efforts to cause such registration statement to remain effective through
September 30, 2002 or until all Warrants have been exercised.
<PAGE> 10
10
(c) Expenses. The Company will pay all expenses incurred by
the Company in complying with this Section 14, including, without limitation,
(i) all registration and filing fees, (ii) all printing expenses, (iii) all
fees and disbursements of counsel and independent public accountants for the
Company, (iv) all Blue Sky fees and expenses (including fees and expenses of
counsel in connection with any Blue Sky surveys), and (v) the entire expense of
any special audits incident to or required by any such registration.
(d) Listings. The Company covenants to make commercially
reasonable efforts to arrange for the Warrants and all Common Shares issuable
upon exercise of the Warrants to be listed on the New York Stock Exchange after
the Separation Date. Any such listing or quotation will be at the Company's
expense.
14. Warrant Agent. The Warrant Agent hereby accepts the
agency established by this Agreement and agrees to perform only the duties and
obligations explicitly imposed by this Agreement upon the following terms and
conditions, all of which the Company and each Holder by acceptance of a Warrant
Certificate, shall be bound:
(a) Correctness of Statements. The statements contained
herein and in the Warrant Certificates shall be taken as statements of the
Company, and the Warrant Agent shall not be liable for, nor does it assume, any
responsibility for the correctness of any of them except for such statements
which describe the Warrant Agent or actions it takes or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of the
Warrant Certificates except as otherwise provided.
(b) Breach of Covenants. The Warrant Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
or conditions contained in this Agreement or in the Warrant Certificates.
(c) Reliance on Counsel. The Warrant Agent may select and
consult at any time with counsel satisfactory to it (who may be counsel for the
Company) and the Warrant Agent shall incur no liability or responsibility to
the Company or to any Holder in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the opinion or the
advice of such counsel provided the Warrant Agent shall have exercised
reasonable care in the selection and continued employment of such counsel.
(d) Reliance on Documents. The Warrant Agent shall incur no
liability or responsibility to the Company or to any Holder for any action
taken in reliance on any Warrant Certificate, certificate of shares, notice,
resolution, waiver, consent, order, certificate or other paper, document or
instrument believed by it to be genuine or to have been signed, sent or
presented by the proper party or parties.
<PAGE> 11
11
(e) Company Responsibilities. The Company agrees to perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all further and other acts, instruments and
assurances as may reasonably be required by the Warrant Agent for carrying out
or performing by the Warrant Agent any of the provisions of this Agreement.
(f) Warrant Agent Compensation. The Company agrees to pay the
Warrant Agent reasonable compensation for all services rendered by the Warrant
Agent in the execution of this Agreement, to reimburse the Warrant Agent for
all reasonable expenses (including reasonable fees and expenses of its
counsel), taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the execution of this Agreement and to
indemnify the Warrant Agent and save it harmless against any and all losses,
expenses or liabilities, including judgments, costs and counsel fees, arising
out of or in connection with its agency under this Agreement, except as a
result of its gross negligence or bad faith.
(g) Legal Proceedings. The Warrant Agent shall be under no
obligation to institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one or more
Holders shall furnish the Warrant Agent with reasonable security and indemnity
for any costs and expenses which may be incurred, but this provision shall not
affect the power of the Warrant Agent to take such action as it may consider
proper, whether with or without any such security or indemnity. All rights of
action under this Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrant Certificates or the
production thereof at any trial or proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall be brought in
its name as Warrant Agent and any recovery of judgment shall be for the ratable
benefit of the holders of the Warrants, as their respective rights or interests
may appear.
(h) Other Transactions. The Warrant Agent and any
shareholder, director, officer or employee of it may buy, sell or deal in any
of the Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not the Warrant Agent under this Agreement. Nothing herein
shall preclude the Warrant Agent from acting in any other capacity for the
Company and for any other legal entity.
(i) Liability of Warrant Agent. The Warrant Agent shall act
hereunder solely as agent for the Company and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not be liable for
anything which it may do or refrain from doing in connection with this
Agreement except for its own gross negligence or bad faith.
(j) Certification for the Benefit of Warrant Agent. Whenever
in the performance of its duties under this Agreement the Warrant Agent shall
deem it necessary or
<PAGE> 12
12
desirable that any matter be proved or established or that any instructions
with respect to the performance of its duties hereunder be given by the Company
prior to taking or suffering any action hereunder, (for example, establishment
of the Exercise Price or any adjustment thereto), such matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established, or such instructions may be given, by a
certificate or instrument signed by the President, Chief Executive Officer, or
any Vice President, or the Secretary of the Company and delivered to the
Warrant Agent. Such certificate or instrument may be relied upon by the Warrant
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement; but in its discretion the Warrant Agent may in lieu thereof
accept other evidence of such matter or may require such further or additional
evidence as it may deem reasonable.
(k) Company Instructions. Except as authorized and directed
by the Company, the Warrant Agent shall not at any time be under any duty or
responsibility to any Holder to make or cause to be made any adjustment of the
Exercise Price or the number of Warrant Shares or other securities or property
deliverable as provided in this Agreement, to determine whether any facts exist
which may require any such adjustment, with respect to the nature or extent of
any such adjustments when made, or with respect to the method employed in
making the same. The Warrant Agent shall not be accountable with respect to the
validity or value or the kind or the amount of any Warrant Shares or of any
security or property which may at any time be issued or delivered upon the
exercise of any Warrant or, at the expiration of the Exercise Period, for any
unexercised Warrant or with respect to whether any Warrant Shares or other
securities which when issued will be validly issued and fully paid and
nonassessable. In no event shall the Warrant Agent be liable for consequential,
indirect or special damages, loss of profits or loss of business even if
informed of the possibility of such damages by the Company, a Warrant Holder or
a third party and regardless of the form of action.
15. Change of Warrant Agent. The Warrant Agent may at any
time resign as Warrant Agent hereunder by written notice of its election
delivered to the Company, such resignation to take effect upon the appointment
of a successor warrant agent and its acceptance of such appointment as
hereinafter provided. If the Warrant Agent shall resign or become incapable of
acting as Warrant Agent, the Company shall appoint a successor to such Warrant
Agent. If the Company shall fail to make such appointment within a period of 30
days after it has been notified in writing of such resignation or incapacity by
the Warrant Agent or by a Holder, then the Warrant Agent or a Holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a successor to the Warrant Agent. In addition, the Company shall have the right
to terminate the obligations of the Warrant Agent hereunder upon 30 days prior
written notice. Pending appointment of a successor to such Warrant Agent in any
such case, either by the Company or by a court, the duties of the Warrant Agent
shall be carried out by the Company. Any successor warrant agent, whether
appoint by the Company or by a court, shall be a bank or trust company, in good
standing, located in the United States, and must have at the time of its
appointment as warrant agent a combined capital and surplus of at least
<PAGE> 13
13
$100,000,000. After appointment, a successor warrant agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as warrant agent without further act or deed; but the former
warrant agent shall deliver and transfer to the successor warrant agent any
property held at the time by it hereunder and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Failure to give
any notice provided for in this Section 16, however, or any defect herein,
shall not affect the legality or validity of the appointment of a successor
warrant agent.
16. Merger, Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Warrant Agent, shall be the successor to
the Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent
under the provisions of Section 16 hereof. In case at the time such successor
to the Warrant Agent shall succeed to the agency created by this Agreement, and
in case at that time any of the Warrants shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of the predecessor warrant agent and deliver such Warrant so
countersigned; and in case at that time any of the Warrants shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrants
either in the name of the predecessor warrant agent or in the name of the
successor warrant agent; and in all such cases such Warrants shall have the
full force and effect provided in the Warrants and in this Agreement.
In the case at any time the name of the Warrant Agent shall
be changed and at such time any of the Warrants shall have been countersigned
but not delivered, the Warrant Agent may adopt the countersignature under its
prior name and deliver Warrants so countersigned; and in case at that time any
of the Warrants shall not have been countersigned, the Warrant Agent may
countersign such Warrants either in its prior name or in its changed name; and
in all such cases such Warrants shall have the full force and effect provided
in the Warrants and in this Agreement.
17. Notice to Company, Warrant Agent and Holders. Any notice
pursuant to this Agreement to be given by the Company or by any Holder to the
Warrant Agent shall be sufficiently given if delivered by hand or by reputable
overnight delivery service or courier, or five days after mailing by first
class or registered mail, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company) to the Warrant Agent as
follows:
-----------------------
-----------------------
-----------------------
Attention:
------------
<PAGE> 14
14
Notices and other communications to be given to the Company
by any Holder or the Warrant Agent shall be deemed sufficiently given if
delivered by hand or by reputable overnight delivery service or courier, or
five days after mailing by first class or registered mail, postage prepaid,
addressed (until another address is filed in writing by the Company with the
Warrant Agent) to the Company as follows:
Biovail Corporation International
2488 Dunwin Drive
Mississauga, Ontario, Canada
L5L 1J9
Attention: Chief Financial Officer
Notices and other communications to be given to any Holder
shall be deemed sufficiently given if delivered by hand or by overnight
delivery service or courier or five days after mailing by first class or
registered mail, postage prepaid, addressed (until another address is filed in
writing by the Holder with the Warrant Agent and the Company) in the name and
to the address of such Holder appearing on the records of the Warrant Agent or
the Company.
18. Use of Agents. The Warrant Agent may execute and exercise
any of its rights and powers hereby vested in it or perform any duty hereunder
either itself or by or through its agents or attorneys and the Warrant Agent
shall not be answerable or accountable for any act, default, neglect or
misconduct of such agents or attorneys; provided, however, reasonable care was
exercised in the selection thereof.
19. Purchase of Warrants by the Company.
(a) The Company shall have the right to purchase or otherwise
acquire Warrants at such times, in such manner and for such consideration as it
may deem appropriate.
(b) In the event the Company shall purchase or otherwise
acquire Warrants, the same shall thereupon be delivered to the Warrant Agent
and be cancelled by it and retired. The Warrant Agent shall cancel any Warrant
surrendered for exchange, substitution, transfer or exercise in whole or in
part.
20. Miscellaneous.
(a) Statements on Warrants. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may
continue to express the same price and number and kind of shares as are stated
in the Warrants initially issuable pursuant to this Agreement.
<PAGE> 15
15
(b) Supplements and Amendments. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any Holder in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not adversely
affect the interest of the Holders.
(c) Successors. All covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
(d) Termination. This Agreement shall terminate on the
fifteenth day following the earlier to occur of (i) the Expiration Date and
(ii) the date on which there remain no Warrants outstanding.
(e) Facsimile Signature. The Warrant Certificates and any
Warrant Certificates that replace the Warrant Certificates may be executed by
the Company in facsimile.
(f) Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Warrant Agent and the Holders any legal or equitable right, remedy or claim
under this Agreement, and this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the Holders.
(g) Governing Law. This Agreement and the Warrants issued
hereunder shall be construed in accordance with the laws of the State of New
York applicable to contracts executed in that state by residents of that state
to be performed wholly within that state.
(h) Counterparts. This Agreement may be executed in any
number of counterparts each of which so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
(i) Headings. The descriptive headings of sections of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
<PAGE> 16
16
IN WITNESS WHEREOF, the Company and the Warrant Agent have
executed this Agreement as of the date first above written.
BIOVAIL CORPORATION INTERNATIONAL
By:
------------------------------------
Name:
Title:
CHASE MELLON SHAREHOLDER SERVICES, L.L.C.
as Warrant Agent
By:
------------------------------------
Name:
Title:
The undersigned hereby agrees to the provisions of Section
12(a) and 13 above.
INTELLIGENT POLYMERS LIMITED
By:
------------------------------------
Name:
Title:
<PAGE> 17
EXHIBIT A
TO WARRANT AGREEMENT
UNTIL SEPTEMBER 30, 1999 OR SUCH EARLIER DATE AS THE PURCHASE
OPTION (AS DEFINED IN THE WARRANT AGREEMENT) IS EXERCISED OR EXPIRES UNEXERCISED
(THE "SEPARATION DATE") THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY BE
TRADED, EXCHANGED OR OTHERWISE TRANSFERRED ONLY TOGETHER WITH THE COMMON SHARES
OF INTELLIGENT POLYMERS LIMITED ISSUED HEREWITH. THE HOLDER HEREOF MAY, BUT
NEED NOT, SUBMIT THIS CERTIFICATE FOR THE REMOVAL OF THIS LEGEND AFTER THE
SEPARATION DATE.
(FORM OF WARRANT CERTIFICATE)
VOID AFTER 5:00 p.m., Warrant No. _____
New York City Time, Warrant to Purchase _____
on the Separation Date Common Shares, no par value
BIOVAIL CORPORATION WARRANTS TO PURCHASE COMMON
SHARES, NO PAR VALUE
This Warrant Certificate certifies that for value received
___________________________________________________________________________
or registered assigns is entitled to purchase from Biovail Corporation
International (the "Company"), on any business day beginning on October 1, 1999
(the "Exercise Commencement Date"), the number of the Company's Common Shares,
no par value (the "Common Shares"), set forth above, each of which Common Shares
shall be fully paid and nonassessable, at the exercise price per Common Share
of U.S.$_____ (the "Exercise Price"). The number of Common Shares purchasable
upon exercise of the Warrants evidenced hereby and the Exercise Price shall be
subject to adjustment from time to time as set forth in the Warrant Agreement
referred to on the reverse side hereof (the "Warrant Agreement"). Subject to
the terms of the Warrant Agreement, this Warrant may be exercised in whole or
in increments of one Common Share at any time on or after the Exercise
Commencement Date and before 5:00 p.m., New York City time, on September 30,
<PAGE> 18
2
2002 (the "Expiration Date"), by surrender of this Warrant Certificate at the
office of the warrant agent for the Warrants (the "Warrant Agent"), with the
Election to Purchase on the reverse side hereof completed and duly executed and
accompanied by payment, in cash or certified or official bank check payable to
the order of the Company.
The Exercise Price and the number of Common Shares purchasable
upon exercise of this Warrant are subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement.
Immediately after 5:00 p.m., New York City time, on the
Expiration Date, this Warrant will become null and void and of no value.
REFERENCE IS MADE TO THE PROVISIONS OF THIS WARRANT CERTIFICATE
SET FORTH ON THE REVERSE SIDE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH ON THE
FRONT OF THIS CERTIFICATE.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.
This Warrant shall be governed by and construed in accordance
with the laws of the State of New York as applicable without giving effect to
conflicts of law principles thereof.
Copies of the Warrant Agreement are on file at the office of
the Warrant Agent at 450 West 33rd Street, New York, NY 10001, Attention:
____________________, and may be obtained by any holder upon written request
and without cost.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be executed by its duly authorized officer, and its corporate
seal is hereunto affixed.
Dated:
Chase Mellon Shareholder Services, L.L.C.,
as Warrant Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
<PAGE> 19
3
BIOVAIL CORPORATION INTERNATIONAL
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
[Reverse Side]
The warrant evidenced by this Warrant Certificate is part of a
duly authorized issue of warrants to purchase Common Shares, no par value, of
Biovail Corporation International (the "Company"), issued pursuant to the
Warrant Agreement between the Company and the Warrant Agent named therein,
dated as of October __, 1997 as amended at any time (the "Warrant Agreement").
The Warrant Agreement is hereby incorporated by reference and made a part of
this Warrant Certificate as fully as though completely set forth herein. The
holder of this Warrant Certificate agrees to be bound by the Warrant Agreement.
In the event of any inconsistency or discrepancy between the Warrant Certificate
and the Warrant Agreement, the Warrant Agreement shall govern. Reference is
made to the Warrant Agreement for a complete description of the rights,
limitations of rights, obligations and duties of the Company, the Warrant Agent
and the holders of Warrants.
If upon any exercise of the Warrant evidenced hereby the
number of Common Shares purchased shall be less than the total number of Common
Shares evidenced hereby, the Warrant Agent shall issue to the holder hereof, or
his proper transferee, a new Warrant Certificate evidencing the rights of the
holder hereof to purchase the balance of the Common Shares purchasable
hereunder upon the same terms and conditions herein set forth. Warrants may be
exercised only as to whole Common Shares.
The Warrant may not be transferred or exercised except in
compliance with the Warrant Agreement and applicable federal, state and
provincial securities laws.
Upon due presentation for registration of transfer of this
Warrant Certificate to the office of the Warrant Agent with the Form of
Transfer set forth below duly completed and executed, a new Warrant Certificate
of like tenor and evidencing rights to purchase a like number of Common Shares
shall be issued without charge to the transferee designated in the Form of
Transfer in exchange for this Warrant Certificate.
<PAGE> 20
4
The Company and the Warrant Agent may deem and treat the
registered holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing made hereon by
anyone) for the purpose of exercise of the Warrant and for all other purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice
to the contrary.
Upon receipt by the Warrant Agent of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant Certificate
and, in the case of loss, theft or destruction, upon receipt of an indemnity
bond satisfactory to the Warrant Agent (obtained by the holder at the holder's
expense) or, in the case of mutilation, upon surrender of this Warrant
Certificate, the Warrant Agent shall execute and deliver a new Warrant
Certificate of like tenor and date and the lost, stolen, destroyed or mutilated
Warrant Certificate thereupon shall become void.
<PAGE> 21
EXHIBIT B
TO WARRANT AGREEMENT
ELECTION TO PURCHASE
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise _________
of the purchase of _________ Common Shares, no par value, of Biovail Corporation
International (the "Common Shares") and herewith makes payment of U.S. $ _______
(such payment being in cash, or certified or official bank check payable to the
order of Biovail Corporation International), all at the exercise price and on
the terms and conditions specified in the Warrant Certificate and the Warrant
Agreement referred to therein, surrenders this Warrant Certificate and all
right, title and interest therein to Biovail Corporation International and
requests that certificates for such Common Shares be issued in the name of:
- -------------------------------------------------------------------------------
(Name)
- -------------------------------------------------------------------------------
(Address)
- -------------------------------------------------------------------------------
(Social Security or other taxpayer identifying number)
and, if different from above, be delivered to;
- -------------------------------------------------------------------------------
(Name)
- -------------------------------------------------------------------------------
(Address)
and, if the number of Common Shares so purchased are not all of the Common
Shares issuable upon exercise of the Warrants evidenced by this certificate,
that a new certificate evidencing Warrants to purchase the balance of such
Common Shares be registered in the name of, and delivered to, the undersigned
at the address stated below.
<PAGE> 22
2
Dated: , 19
---------------------------- --
Name of Registered Owner:
------------------------------------------------------
- -------------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Social Security or other taxpayer identifying number)
Signature:
---------------------------------------------------------------------
IMPORTANT: ALL SIGNATURES MUST BE GUARANTEED IN THE SPACE PROVIDED BELOW
BY A FINANCIAL INSTITUTION THAT IS A MEMBER OF THE SECURITIES
TRANSFER AGENTS MEDALLION PROGRAM ("STAMP"), THE STOCK
EXCHANGE MEDALLION PROGRAM ("SEMP") OR THE NEW YORK STOCK
EXCHANGE INC. MEDALLION SIGNATURE PROGRAM ("MSP").
SIGNATURE GUARANTEE:
Name:
--------------------------------------------------------------------------
(please print)
By:
----------------------------------------------------------------------------
Title:
-------------------------------------------------------------------------
<PAGE> 23
EXHIBIT C
TO WARRANT AGREEMENT
FORM OF TRANSFER
(To be signed only upon transfer of Warrant in accordance with Section 12 of
the Warrant Agreement)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfer unto ________________________ whose address is _______________________
right represented by the Warrant to
purchase ________________ Common Shares, no par value, of BIOVAIL INTERNATIONAL
to which the Warrant relates, and appoints the Warrant Agent attorney to
transfer such right on the books of BIOVAIL CORPORATION INTERNATIONAL with full
power of substitution.
Dated: , 19
---------------------------- --
------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate)
------------------------------------------
(Address)
<PAGE> 24
2
IMPORTANT: ALL SIGNATURES MUST BE GUARANTEED IN THE SPACE PROVIDED BELOW
BY A FINANCIAL INSTITUTION THAT IS A MEMBER OF THE SECURITIES
TRANSFER AGENTS MEDALLION PROGRAM (STAMP), THE STOCK EXCHANGE
MEDALLION PROGRAM (SEMP) OR THE NEW YORK STOCK EXCHANGE, INC.
MEDALLION SIGNATURE PROGRAM ("MSP:).
SIGNATURE GUARANTEE:
Name:
--------------------------------------------------------------------------
(please print)
By:
----------------------------------------------------------------------------
Title:
-------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 4.4
THE SECURITIES OF INTELLIGENT POLYMERS LIMITED ("INTELLIGENT POLYMERS") ARE
SUBJECT TO AN OPTION OF THE HOLDER OR HOLDERS OF A MAJORITY OF THE SPECIAL
SHARES OF INTELLIGENT POLYMERS AS DESCRIBED IN THE BYE-LAWS OF INTELLIGENT
POLYMERS TO PURCHASE SUCH SECURITIES AT AN AGREED UPON PRICE EXERCISABLE BY
NOTICE AT ANY TIME COMMENCING ON THE CLOSING DATE OF THE UNIT OFFERING AND
ENDING ON THE EARLIER OF (i) SEPTEMBER 30, 2002 AND (ii) THE 90TH DAY AFTER THE
DATE INTELLIGENT POLYMERS PROVIDES SUCH HOLDER OR HOLDERS WITH QUARTERLY
FINANCIAL STATEMENTS OF INTELLIGENT POLYMERS SHOWING CASH OR CASH EQUIVALENTS
OF LESS THAN U.S.$3 MILLION. COPIES OF THE BYE-LAWS OF INTELLIGENT POLYMERS
ARE AVAILABLE AT THE OFFICES OF INTELLIGENT POLYMERS AT CONYERS DILL & PEARMAN,
CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON HM 11, BERMUDA AND WILL BE FURNISHED
TO ANY SHAREHOLDER OF INTELLIGENT POLYMERS ON REQUEST AND WITHOUT COST.
NUMBER OF UNITS
_________
UNIT CUSIP
_________
INTELLIGENT POLYMERS LIMITED
(INCORPORATED UNDER THE LAWS OF BERMUDA)
Authorized Capitalization:
__________ Common Shares, Par Value
U.S.$.01 Per Share, and 12,000 Special Shares,
Par Value U.S.$1.00 Per Share
------------------------------------------------
BIOVAIL CORPORATION INTERNATIONAL
(INCORPORATED UNDER THE LAWS OF ONTARIO, CANADA)
Authorized Capitalization:
60,000,000 Common Shares, No Par Value
EACH UNIT CONSISTING OF (A) ONE COMMON SHARE, PAR VALUE
U.S.$.01 OF INTELLIGENT POLYMERS LIMITED AND (B) ONE WARRANT TO PURCHASE ONE
COMMON SHARE, NO PAR VALUE OF BIOVAIL CORPORATION INTERNATIONAL ("BIOVAIL").
<PAGE> 2
2
THIS CERTIFIES Cede & Co. is the owner of _________ Units that
as described above are transferable only on the books of Intelligent Polymers
and Biovail by the holder thereof in person or by his or her duly authorized
attorney on surrender of this certificate properly endorsed.
Each Unit consists of (a) one Common Share, par value
U.S.$.01, of Intelligent Polymers (the "Intelligent Polymers Common Shares")
and (b) one warrant, (the "Warrant") to purchase one Common Share of Biovail,
no par value (the "Biovail Common Shares").
The Intelligent Polymers Common Shares and the Warrants
comprising the Units will be traded only as Units until September 30, 1999 or
such earlier date as the holder's or holders' of the Special Shares right to
purchase all of the outstanding Intelligent Polymers Common Shares is exercised
or expires (the "Separation Date").
On the Separation Date, the record holder of this Unit
Certificate shall be entitled to receive a certificate or certificates for the
number of Intelligent Polymers Common Shares equal to the number of Intelligent
Polymers Common Shares represented by this Unit Certificate immediately prior
to the Separation Date from ChaseMellon Shareholder Services L.L.C., which is
the Transfer Agent (in such capacity, the "Transfer Agent") for Intelligent
Polymers. A form of Intelligent Polymers Common Share certificate is attached
hereto as Exhibit A. The Intelligent Polymers Common Shares are subject to all
of the provisions of the Memorandum of Association and Bye-Laws of Intelligent
Polymers to all of which the holder of this Unit Certificate consents by
acceptance hereof. Copies of the Memorandum of Association of Intelligent
Polymers are on file at the offices of the Transfer Agent at 450 West 33rd
Street, New York, NY 10001 and at the offices of Intelligent Polymers at
Conyers Dill & Pearman, Clarendon House, 2 Church Street, Hamilton HM 11,
Bermuda, Attention: David J. Doyle and are available for inspection by any
holder of the Units during business hours.
The Intelligent Polymers Common Shares are subject to a
purchase option set forth in the Bye-Laws of Intelligent Polymers.
On the Separation Date the record holder of this Unit
Certificate shall also be entitled to receive a certificate or certificates for
the number of Warrants equal to the number of Warrants represented by this Unit
Certificate immediately prior to the Separation Date from ChaseMellon
Shareholder Services, L.L.C., which is the Warrant Agent (in such capacity, the
"Warrant Agent") for Biovail pursuant to a warrant agreement dated as of
October __, 1997 (the "Warrant Agreement") between Biovail and the Warrant
Agent. The terms of the Warrants are governed by the terms of the Warrant
Agreement and are subject to the terms and conditions contained therein, to all
of which terms and conditions the holder
<PAGE> 3
3
of this Unit Certificate consents by acceptance hereof. A form of certificate
representing the Warrants is attached hereto as Exhibit B. Copies of such
Warrant Agreement are on file at the offices of the Warrant Agent at 450 West
33rd Street, New York, NY 10001 and are available for inspection by any holder
of Units during business hours. The Warrants shall be void unless exercised by
5:00 p.m., New York time, on September 30, 2002.
The terms of this Unit Certificate shall be governed by the
laws of the State of New York without giving effect to conflicts of law
principles thereof.
This Unit Certificate is not valid unless countersigned and
registered by the Transfer Agent and Registrar of this Unit Certificate.
ON AND AFTER THE SEPARATION DATE THIS UNIT CERTIFICATE SHALL
BE VOID.
INTELLIGENT POLYMERS LIMITED
By:
------------------------------
Name:
Title:
BIOVAIL CORPORATION INTERNATIONAL
By:
------------------------------
Name:
Title:
Countersigned
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Unit Registrar and Transfer Agent
By:
------------------------------
Name:
Title:
<PAGE> 4
4
[REVERSE OF UNIT CERTIFICATE]
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
CTST - as custodian
U/G/M/A - Uniform Gifts to Minors Act
</TABLE>
For Value Received ______________ hereby sell(s), assign(s)
and transfer(s) unto:
- --------------------------------------------------------------------------------
Please insert Social Security or other
Identifying Number of Assignee
- --------------------------------------------------------------------------------
Please Print or Typewrite Name and
Address Including Zip Code of Assignee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
of the Units represented by this written Certificate, and do(es) hereby
irrevocably constitute and appoint ________Attorney to transfer the said Unit
with full power of substitution in the premises.
Dated:
-------------------------- ------------------------------------
Signature
------------------------------------
Signature
<PAGE> 5
EXHIBIT A
TO UNIT CERTIFICATE
[FORM OF FACE OF INTELLIGENT POLYMERS COMMON SHARES]
The securities of Intelligent Polymers Limited, a Bermuda company ("Intelligent
Polymers") evidenced hereby are subject to an option of the holder or holders
of a majority of the Special Shares of Intelligent Polymers, as described in
the Bye-Laws of Intelligent Polymers, to purchase such securities at an agreed
upon price, exercisable by notice given at any time beginning on the closing
date of the offering of common stock, par value, $0.01 per share (the
"Intelligent Polymers Common Shares") of Intelligent Polymers and the warrants
(the "Warrants") to purchase common shares of Biovail Corporation International
("Biovail Common Shares") which comprise the Units, (the "Unit Offering") and
ending on the earlier of (i) September 30, 2002 and (ii) the 90th day after the
date Intelligent Polymers provides such holder or holders with quarterly
financial statements of Intelligent Polymers showing cash or cash equivalents
of less than U.S.$3,000,000. Copies of the Bye-Laws of Intelligent Polymers
are available at the offices of Intelligent Polymers at Conyers Dill & Pearman,
Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, and will be
furnished to any shareholder of Intelligent Polymers on request and without
cost.
Until September 30, 1999 or such earlier date as the Purchase
Option is exercised or expires unexercised (the "Separation Date"), the shares
represented by this Certificate may be traded, exchanged, or otherwise
transferred only together with the Warrant issued herewith. The holder hereof
may, but need not, submit this Certificate for the removal of this legend after
the Separation Date.
INTELLIGENT POLYMERS LIMITED
Incorporated Under The Laws Of Bermuda
COMMON SHARES
FULLY PAID AND NON-ASSESSABLE COMMON SHARES,
PAR VALUE OF U.S.$0.01 PER SHARE
OF INTELLIGENT POLYMERS LIMITED
CUSIP
See Reverse For Certain Definitions
<PAGE> 6
2
THIS CERTIFIES that
is the owner of Common Shares of
INTELLIGENT POLYMERS LIMITED (the "Company"), transferable on the books of the
Company by the holder hereof, in person or by duly authorized attorney, upon
surrender of this Certificate properly endorsed. This certificate and the
shares represented hereby are subject to the laws of Bermuda, and to the
Memorandum of Association and Bye-Laws of the Company as now or hereafter
amended (copies of which are on file at the offices of the Company and the
Transfer Agent), which are made a part hereof with the same force and effect as
if they were set forth herein, to all of which the holder, by acceptance
hereof, assents. This certificate is not valid unless countersigned by the
Transfer Agent and registered by the Registrar.
IN WITNESS WHEREOF, the Company has caused the facsimile
signatures of its duly authorized officers and the facsimile of its corporate
seal to be hereunto affixed.
Dated:
Countersigned and Registered:
Transfer Agent and Registrar
By:
-----------------------
Name:
Title:
----------------------- -----------------------
Authorized Officer Authorized Officer
<PAGE> 7
[FORM OF REVERSE OF INTELLIGENT POLYMERS COMMON SHARES]
INTELLIGENT POLYMERS LIMITED
The Company will furnish without charge to each shareholder
who so requests a copy of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of shares of the
Company or series thereof, and the qualifications, limitations or restrictions
of such preferences and/or rights.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in common
</TABLE>
UNIF GIFT MIN ACT...............Custodian.........................
(cust) (Minor)
under Uniform Gifts to Minors Act
.................................................
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received, __________________ hereby sells, assigns
and transfers unto
Please insert Social Security
or other identifying number
of assignee
- -------------------------
<PAGE> 8
2
- --------------------------------------------------------------------------------
Please print or typewrite name and address
including postal zip code of assignee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares
- -------------------------------------------------------------------------
represented by the within Certificate, and do hereby irrevocably constitute and
appoint
- --------------------------------------------------------------------------------
attorney, to transfer the said same on the books of the within named Company,
with full power of substitution in the premises.
Dated:
-------------------------
----------------------------------------
Signature
----------------------------------------
Signature
Notice: The signature to this
assignment must correspond
with the name as written upon
the face of the Certificate,
in every particular, without
alteration or enlargement, or
any change whatever.
In presence of:
- ----------------------------------------
<PAGE> 9
3
<TABLE>
<CAPTION>
<S> <C>
Important: All signatures must be guaranteed by a firm which is a financial institution and a
member of the Securities Transfer Agent's medallion Program ("STAMP"), the Stock
Exchange Medallion Program ("SEMP") or the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP").
Signature Guarantee:
-----------------------------------------------------------
Name of Firm
------------------------------------------------------------
Authorized Signature
------------------------------------------------------------
Name of Authorized Signatory
(Please print)
------------------------------------------------------------
Address of Firm
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
Area Code and Telephone Number of Firm
</TABLE>
<PAGE> 10
EXHIBIT B
TO UNIT CERTIFICATE
UNTIL SEPTEMBER 30, 1999 OR SUCH EARLIER DATE AS THE PURCHASE
OPTION (AS DEFINED IN THE WARRANT AGREEMENT) IS EXERCISED OR EXPIRES
UNEXERCISED (THE "SEPARATION DATE") THE WARRANTS REPRESENTED BY THIS
CERTIFICATE MAY BE TRADED, EXCHANGED OR OTHERWISE TRANSFERRED ONLY TOGETHER
WITH THE COMMON SHARES OF INTELLIGENT POLYMERS LIMITED ISSUED HEREWITH. THE
HOLDER HEREOF MAY, BUT NEED NOT, SUBMIT THIS CERTIFICATE FOR THE REMOVAL OF
THIS LEGEND AFTER THE SEPARATION DATE.
(FORM OF WARRANT CERTIFICATE)
VOID AFTER 5:00 p.m., Warrant No. _____
New York City Time, Warrant to Purchase _____
on the Separation Date Common Shares, no par value
BIOVAIL CORPORATION INTERNATIONAL WARRANTS TO PURCHASE COMMON
SHARES, NO PAR VALUE
This Warrant Certificate certifies that for value received ____
________________________________________________________________________________
or registered assigns is entitled to purchase from Biovail Corporation
International (the "Company"), on any business day beginning on October 1, 1999
(the "Exercise Commencement Date"), the number of the Company's Common Shares,
no par value (the "Common Shares"), set forth above, each of which Common
Shares shall be fully paid and nonassessable, at the exercise price per Common
Share of U.S.$_____ (the "Exercise Price"). The number of Common Shares
purchasable upon exercise of the Warrants evidenced hereby and the Exercise
Price shall be subject to adjustment from time to time as set forth in the
Warrant Agreement referred to on the reverse side hereof (the "Warrant
Agreement"). Subject to the terms of the Warrant Agreement, this Warrant may
be exercised in whole or in increments of one Common Share at any time on or
after the Exercise Commencement Date and before 5:00 p.m., New York City time,
on September 30,
<PAGE> 11
2
2002 (the "Expiration Date"), by surrender of this Warrant Certificate at the
office of the warrant agent for the Warrants (the "Warrant Agent"), with the
Election to Purchase on the reverse side hereof completed and duly executed and
accompanied by payment, in cash or certified or official bank check payable to
the order of the Company.
The Exercise Price and the number of Common Shares purchasable
upon exercise of this Warrant are subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement.
Immediately after 5:00 p.m., New York City time, on the
Expiration Date, this Warrant will become null and void and of no value.
REFERENCE IS MADE TO THE PROVISIONS OF THIS WARRANT
CERTIFICATE SET FORTH ON THE REVERSE SIDE HEREOF, AND SUCH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH ON THE
FRONT OF THIS CERTIFICATE.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.
This Warrant shall be governed by and construed in accordance
with the laws of the State of New York as applicable without giving effect to
conflicts of law principles thereof.
Copies of the Warrant Agreement are on file at the office of
the Warrant Agent at 450 West 33rd Street, New York, NY 10001, Attention:
____________________, and may be obtained by any holder upon written request
and without cost.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be executed by its duly authorized officer, and its corporate
seal is hereunto affixed.
Dated:
Chase Mellon Shareholder Services, L.L.C.,
as Warrant Agent
By:
--------------------------------------
Name:
Title:
<PAGE> 12
3
BIOVAIL CORPORATION
INTERNATIONAL
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
[Reverse Side]
The warrant evidenced by this Warrant Certificate is part of a
duly authorized issue of warrants to purchase Common Shares, no par value, of
Biovail Corporation International (the "Company"), issued pursuant to the
Warrant Agreement between the Company and the Warrant Agent named therein,
dated as of October __, 1997 as amended at any time (the "Warrant Agreement").
The Warrant Agreement is hereby incorporated by reference and made a part of
this Warrant Certificate as fully as though completely set forth herein. The
holder of this Warrant Certificate agrees to be bound by the Warrant Agreement.
In the event of any inconsistency or discrepancy between the Warrant
Certificate and the Warrant Agreement, the Warrant Agreement shall govern.
Reference is made to the Warrant Agreement for a complete description of the
rights, limitations of rights, obligations and duties of the Company, the
Warrant Agent and the holders of Warrants.
If upon any exercise of the Warrant evidenced hereby the
number of Common Shares purchased shall be less than the total number of Common
Shares evidenced hereby, the Warrant Agent shall issue to the holder hereof, or
his proper transferee, a new Warrant Certificate evidencing the rights of the
holder hereof to purchase the balance of the Common Shares purchasable
hereunder upon the same terms and conditions herein set forth. Warrants may be
exercised only as to whole Common Shares.
The Warrant may not be transferred or exercised except in
compliance with the Warrant Agreement and applicable federal, state and
provincial securities laws.
Upon due presentation for registration of transfer of this
Warrant Certificate to the office of the Warrant Agent with the Form of
Transfer set forth below duly completed and executed, a new Warrant Certificate
of like tenor and evidencing rights to purchase a like number of Common Shares
shall be issued without charge to the transferee designated in the Form of
Transfer in exchange for this Warrant Certificate.
<PAGE> 13
The Company and the Warrant Agent may deem and treat the
registered holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing made hereon by
anyone) for the purpose of exercise of the Warrant and for all other purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice
to the contrary.
Upon receipt by the Warrant Agent of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant Certificate
and, in the case of loss, theft or destruction, upon receipt of an indemnity
bond satisfactory to the Warrant Agent (obtained by the holder at the holder's
expense) or, in the case of mutilation, upon surrender of this Warrant
Certificate, the Warrant Agent shall execute and deliver a new Warrant
Certificate of like tenor and date and the lost, stolen, destroyed or mutilated
Warrant Certificate thereupon shall become void.
<PAGE> 14
ELECTION TO PURCHASE
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise
__________ of the Warrants for the purchase of _____________ Common Shares, no
par value, of Biovail Corporation International (the "Common Shares") and
herewith makes payment of U.S.$____ (such payment being in cash, or certified
or official bank check payable to the order of Biovail Corporation
International), all at the exercise price and on the terms and conditions
specified in the Warrant Certificate and the Warrant Agreement referred to
therein, surrenders this Warrant Certificate and all right, title and interest
therein to Biovail Corporation International and requests that certificates for
such Common Shares be issued in the name of:
- --------------------------------------------------------------------------------
(Name)
- --------------------------------------------------------------------------------
(Address)
- --------------------------------------------------------------------------------
(Social Security or other taxpayer identifying number)
and, if different from above, be delivered to;
- --------------------------------------------------------------------------------
(Name)
- --------------------------------------------------------------------------------
(Address)
and, if the number of Common Shares so purchased are not all of the Common
Shares issuable upon exercise of the Warrants evidenced by this certificate,
that a new certificate evidencing Warrants to purchase the balance of such
Common Shares be registered in the name of, and delivered to, the undersigned
at the address stated below.
<PAGE> 15
2
Dated: __________________________, 19__
Name of Registered Owner:
------------------------------------------------------
- --------------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Social Security or other taxpayer identifying number)
Signature:
---------------------------------------------------------------------
IMPORTANT: ALL SIGNATURES MUST BE GUARANTEED IN THE SPACE PROVIDED BELOW
BY A FINANCIAL INSTITUTION THAT IS A MEMBER OF THE SECURITIES
TRANSFER AGENTS MEDALLION PROGRAM ("STAMP"), THE STOCK
EXCHANGE MEDALLION PROGRAM ("SEMP") OR THE NEW YORK STOCK
EXCHANGE INC. MEDALLION SIGNATURE PROGRAM ("MSP").
SIGNATURE GUARANTEE:
Name:
--------------------------------------------------------------------------
(please print)
By:
----------------------------------------------------------------------------
Title:
-------------------------------------------------------------------------
<PAGE> 16
FORM OF TRANSFER
(To be signed only upon transfer of Warrant in accordance with Section 12 of
the Warrant Agreement)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfer unto ________________________ whose address is
________________________________the right represented by the Warrant to
purchase ____________________ Common Shares, no par value, of BIOVAIL
CORPORATION INTERNATIONAL to which the Warrant relates, and appoints the
Warrant Agent attorney to transfer such right on the books of BIOVAIL
CORPORATION INTERNATIONAL with full power of substitution.
Dated: __________________, 19__
---------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
---------------------------------------
(Address)
<PAGE> 17
3
IMPORTANT: ALL SIGNATURES MUST BE GUARANTEED IN THE SPACE PROVIDED BELOW
BY A FINANCIAL INSTITUTION THAT IS A MEMBER OF THE SECURITIES
TRANSFER AGENTS MEDALLION PROGRAM (STAMP), THE STOCK EXCHANGE
MEDALLION PROGRAM (SEMP) OR THE NEW YORK STOCK EXCHANGE, INC.
MEDALLION SIGNATURE PROGRAM ("MSP:).
SIGNATURE GUARANTEE:
Name:
--------------------------------------------------------------------------
(please print)
By:
----------------------------------------------------------------------------
Title:
-------------------------------------------------------------------------
<PAGE> 1
Exhibit 4.7
INCORPORATED IN BERMUDA
INTELLIGENT POLYMERS LIMITED
This is to certify that Biovail Corporation International
of 2488 Dunwin Drive
Mississauga, Ontario
Canada L5L 1J9
is/are the registered shareholders of:
<TABLE>
<CAPTION>
No. of Shares Type of Share Par Value
- ------------ ------------- ---------
<S> <C> <C>
12,000 Special Shares US$ 1.0000
</TABLE>
<TABLE>
<CAPTION>
Date of Record Certificate Number % Paid
- -------------- ------------------ ------
<S> <C> <C>
09/10/97 1 0.00
</TABLE>
The above shares are subject to the Memorandum of Association and
Bye-Laws of the Company and transferrable in accordance therewith.
Given under the Common Seal of the Company
- ------------------------ ------------------------
Director Assistant Secretary
<PAGE> 1
Exhibit 5.1
October [ ], 1997
Biovail Corporation International
2488 Dunwin Drive
Mississauga Ontario
L5L 1J9
Attention: Mr. Robert A. Podruzny
Dear Sirs:
I have acted as Canadian in-house general counsel to Biovail Corporation
International ("Biovail") in connection with the proposed issue of up to
3,737,500 units (the "Units"), each Unit consisting of 1 Common Share, with a
par value of $0.01 each, of Intelligent Polymers Limited and one warrant
("Warrant") to acquire one common share without par value of Biovail.
I refer to the registration statement and the related prospectus (respectively,
the "Registration Statement" and the "Prospectus") first filed on September 17,
1997 by Biovail under the Securities Act, 1933 (as amended) (the "Act") in
respect of the foregoing.
In connection with this opinion, I have examined and have assumed the truth and
accuracy of the contents of such documents and certificates of officers of and
advisers to Biovail and of public officials as to factual matters and have
conducted such searches in public registries in Canada as I have deemed
necessary or appropriate for the purposes of this opinion but I have made no
independent investigation regarding such factual matters. In my examination I
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such documents. I have
<PAGE> 2
-2-
further assumed that none of the resolutions and authorities of the
shareholders or directors of Biovail upon which I have relied has been varied,
amended or revoked in any respect or has expired and that the Warrants and the
common shares of Biovail will be issued in accordance with such resolutions and
authorities and as contemplated by and described in the Registration Statement,
in the Prospectus and in the Underwriting Agreement, a copy of which is
attached as an exhibit to the Registration Statement. I further assume that
Biovail will comply with its obligations under and the representations and
warranties contained in the Underwriting Agreement and in all of the other
agreements which are attached as exhibits to the Registration Statement.
I am admitted to practice law only in the Province of Ontario, Canada and
accordingly express no opinion on the laws of any jurisdiction other than the
laws of Ontario and the laws of Canada as they relate to the matters therein,
in force as at the date hereof. In giving this opinion I have relied as to
certain matters governed by New York law on the advice of Cahill Gordon &
Reindel, U.S. Counsel to the Companies.
I assume the transactions contemplated in the Registration Statement and in the
Prospectus are lawful under the laws of the United States, the relevant states
thereof including New York State and all other applicable laws (if any). Since
the transactions contemplated by the Registration Statement are governed by the
laws of jurisdictions outside Canada, we express no opinion herein as to
matters of enforceability.
Based upon the foregoing I am of the opinion that:
(i) Biovail is duly incorporated and validly existing
under the laws of Ontario, Canada.
(ii) The issue of the Warrants has been duly authorised by
Biovail.
(iii) The Common Shares issuable upon exercise of the
Warrants have been duly authorised and, when issued
upon such exercise and upon payment of the exercise
price in accordance with the terms of the Warrant
Agreement, will be duly authorised, legally issued,
fully paid and non-assessable.
<PAGE> 3
- 3 -
I hereby consent to the filing of this opinion with the United States
Securities and Exchange Commission as an exhibit to the Registration Statement.
This opinion is to be construed in accordance with and governed by the laws of
the Province of Ontario.
Yours very truly,
Kenneth C. Cancellara
<PAGE> 1
Exhibit 5.2
October [ ], 1997
(212) 701-3000
Intelligent Polymers Limited
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
Biovail Corporation International
2488 Dunwin Drive
Mississauga, Ontario
Canada L5L 1J9
Dear Sirs:
We have acted as counsel to Biovail Corporation International, a
company established under the laws of Ontario, Canada ("Biovail"), and
Intelligent Polymers Limited, a company established under the laws of
Bermuda ("Intelligent Polymers"; together with Biovail, the "Registrants"),
in connection with the offering of units (the "Units"), each Unit consisting
of one Common Share, par value $.01, of Intelligent Polymers and one Warrant
to purchase one Common Share, no par value, of Biovail. The Registration
Statement on Form F-1/F-3 (Nos. 333-35833 and 333-35839) relating to the
Units was filed with the Securities and Exchange Commission (the
"Commission") by the Registrants under the Securities Act of 1933, as
amended (the "Securities Act") on October 6, 1997, (such registration
statement, as amended at the time it is declared
<PAGE> 2
effective, is herein referred to as the "Registration Statement" and
the prospectus included in the Registration Statement is herein referred to
as the "Prospectus").
In connection with this opinion, we have examined and have assumed the
truth and accuracy of the contents of such documents and certificates of
officers of and advisers to Biovail and of public officials as to factual
matters as we have deemed necessary or appropriate for the purposes of this
opinion but we have made no independent investigation regarding such factual
matters. In our examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such documents. We
have further assumed that none of the resolutions and authorities of the
shareholders or directors of Biovail upon which we have relied has been varied,
amended or revoked in any respect or has expired and that the Warrants and the
common shares of Biovail will be issued in accordance with such resolutions and
authorities and as contemplated by and described in the Registration Statement,
in the Prospectus and in the Underwriting Agreement, a copy of which is
attached as an exhibit to the Registration Statement. We further assume that
Biovail will comply with its obligations under and the representations and
warranties contained in the Underwriting Agreement and in all of the other
agreements which are attached as exhibits to the Registration Statement.
We are of the opinion that when duly executed, issued and delivered by
Biovail and countersigned by the Warrant Agent and when payment of the purchase
price for the Units has been made, the Warrants will be legally issued and will
constitute valid and binding obligations of Biovail.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to our firm under
each of the captions "Taxation-United States Taxation" and "Legal Matters" in
the Registration Statement and related Prospectus. In consenting to such
reference, we do not admit to being experts within the meaning of the
Securities Act or the rules and regulations of the Commission thereunder, as we
have not certified any part of the Registration Statement.
Very truly yours,
Cahill Gordon & Reindel
<PAGE> 1
Exhibit 8.1
October [ ], 1997
(212) 701-3000
Intelligent Polymers Limited
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
Biovail Corporation International
2488 Dunwin Drive
Mississauga, Ontario
Canada L5L 1J9
Dear Sirs:
We have acted as counsel to Biovail Corporation International, a
company established under the laws of Ontario, Canada ("Biovail"), and
Intelligent Polymers Limited, a company established under the laws of
Bermuda ("Intelligent Polymers"; together with Biovail, the "Registrants"),
in connection with the offering of units (the "Units"), each Unit consisting
of one Common Share, par value $.01, of Intelligent Polymers and one Warrant
to purchase one Common Share, no par value, of Biovail. The Registration
Statement on Form F-1/F-3 (Nos. 333-35833 and 333-35839) relating to the
Units was filed with the Securities and Exchange Commission (the
"Commission") by the Registrants under the Securities Act of 1933, as
amended (the "Securities Act") on October [ ], 1997, (such registration
statement, as amended at the time it is declared
<PAGE> 2
effective, is herein referred to as the "Registration Statement" and the
prospectus included in the Registration Statement is herein referred to
as the "Prospectus").
We are of the opinion that our legal opinion is as set forth in statements
in the Registration Statement and the Prospectus under the caption
"Taxation-United States Taxation" to the extent they constitute matters of law
or legal conclusion with respect thereto.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to our firm under
each of the captions "Taxation-United States Taxation" and "Legal Matters" in
the Registration Statement and related Prospectus. In consenting to such
reference, we do not admit to being experts within the meaning of the
Securities Act or the rules and regulations of the Commission thereunder, as we
have not certified any part of the Registration Statement.
Very truly yours,
Cahill Gordon & Reindel
<PAGE> 1
Exhibit 8.2
September 17, 1997
Biovail Corporation International
2488 Dunwin Drive
Mississauga Ontario
L5L 1J9
Attention: Mr. Robert A. Podruzny
Dear Sirs:
We have acted as Canadian counsel to Biovail Corporation International
("Biovail") in connection with the proposed issue of up to 3,737,500 units (the
"Units"), each Unit consisting of 1 Common Share, with a par value of $0.01
each, of Intelligent Polymers Limited and 1 warrant ("Warrant") to acquire 1
common share without par value of Biovail.
We refer to the registration statement and the related prospectus
(respectively, the "Registration Statement" and the "Prospectus") filed today
by Biovail under the Securities Act, 1933 (as amended) (the "Act") in respect
of the foregoing.
In connection with this opinion, we have examined and have assumed the truth
and accuracy of the contents of such documents and certificates of officers of
and advisers to Biovail and of public officials as to factual matters and have
conducted such searches in public registries in Canada as we have deemed
necessary or appropriate for the purposes of this opinion but we have made no
independent investigation regarding such factual matters. In our examination
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such documents. We have further assumed that
none of the resolutions and authorities of the shareholders or directors of
Biovail upon which we
<PAGE> 2
-2-
have relied has been varied, amended or revoked in any respect or has expired
and that the Warrants and the common shares of Biovail will be issued in
accordance with such resolutions and authorities and as contemplated by and
described in the Registration Statement, in the Prospectus and in the
Underwriting Agreement, a copy of which is attached as an exhibit to the
Registration Statement. We further assume that Biovail will comply with its
obligations under and the representations and warranties contained in the
Underwriting Agreement and in all of the other agreements which are attached as
exhibits to the Registration Statement.
We are admitted to practice law only in the Province of Ontario, Canada and
accordingly express no opinion on the laws of any jurisdiction other than the
laws of Ontario and the laws of Canada as they relate to the matters therein,
in force as at the date hereof.
We assume the transactions contemplated in the Registration Statement and in
the Prospectus are lawful under the laws of the United States, the relevant
states thereof including New York State and all other applicable laws (if any).
Since the transactions contemplated by the Registration Statement are governed
by the laws of jurisdictions outside Canada, we express no opinion herein as to
matters of enforceability.
Based upon the foregoing we are of the opinion that the statements in the
Registration Statement and in the Prospectus under the heading "Canadian
Federal Income Tax Considerations", to the extent that they constitute matters
of law or legal conclusions with respect thereto, and which have been prepared
or reviewed by us, are correct in all material respects.
We hereby consent to the filing of this opinion with the United States
Securities and Exchange Commission as an exhibit to the Registration Statement
and to the references to our firm under the aforesaid heading.
This opinion is to be construed in accordance with and governed by the laws of
the Province of Ontario.
Yours very truly,
<PAGE> 1
Exhibit 8.3
[LETTERHEAD OF CONYERS DILL & PEARMAN]
September , 1997
Intelligent Polymers Limited
Clarendon House
2 Church Street
Hamilton
Bermuda
Dear Sirs:
We have acted as Bermuda counsel for Intelligent Polymers Limited
("Intelligent Polymers"), a Bermuda exempted company, in connection with the
proposed issue and sale of up to units ("Units"), each Unit consisting of
one share of common stock of Intelligent Polymers and one warrant to purchase
one common share of Biovail Corporation International ("Biovail").
In our capacity as Bermuda counsel to Intelligent Polymers, we
participated in the preparation of the registration statement ("Registration
Statement") on Form F-1/F3 registration nos. and with respect to the Units
which was filed with the Securities and Exchange Commission ("Commission")
under the Securities Act of 1933 as amended ("Act") of the United States of
America together with all exhibits to the Registration Statement and the forms
of prospectus (the "Prospectus") also filed with the Commission together with
all amendments thereto duly filed in accordance with the Act.
For the purposes of giving this opinion, we have examined and relied upon
the Registration Statement. We have also reviewed a copy of the memorandum of
association and bye-laws of Intelligent Polymers certified as a true copy
thereof by the secretary of Intelligent Polymers on September , 1997, minutes
of meetings of Intelligent Polymers's board of directors and minutes of
shareholders' meetings and such other documents and made such enquiries as to
questions of law as we have deemed necessary in order to render the opinion set
forth below:
We have assumed:
<PAGE> 2
-2-
(i) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not
certified) of all documents examined by us and the authenticity
and completeness of the originals from which such copies were
taken;
(ii) the correctness, accuracy and completeness of all factual
representations made in the Registration Statement and in the
other documents which we have reviewed; and
(iii) that there is no provision of the law of any jurisdiction, other
than Bermuda, which would have any implication in relation to the
opinions expressed herein.
We have made no investigation of and express no opinion in relation to the
laws of any jurisdiction other than Bermuda. This opinion is to be governed by
and construed in accordance with the laws of Bermuda and is limited to and is
given on the basis of the current law and practice in Bermuda.
The term "non assessibility" is not a legal concept under Bermuda law, but
when we describe shares as being "non assessable" (see paragraph 2 below) we
mean with respect to the shareholders of a company, in relation to fully paid
shares of the company and subject to any contrary provision in any agreement in
writing between the company and any one of its shareholders holding such shares
but only with respect to such shareholder, that such shareholder shall not be
bound by an alteration to the memorandum of association or the bye-laws of that
company after the date upon which they became such shareholders, if and insofar
as the alteration requires them to take, or subscribe for additional shares, or
in any way increases their liability to contribute to the share capital of, or
otherwise pay money to, such company.
On the basis of and subject to the foregoing, we are of the opinion that:
1. Intelligent Polymers has been duly incorporated and is an existing limited
liability exempted company under the laws of Bermuda, with corporate power and
corporate authority to own, lease and operate its properties and conduct its
business as described in the Prospectus.
<PAGE> 3
2. The Common Shares to be sold by Intelligent Polymers as a component of
the Units have been duly authorised, legally issued and, when duly paid for,
will be fully paid and non-assessable; such Intelligent Polymers Common Shares
are not subject to the pre-emptive rights of any shareholder of Intelligent
Polymers; all corporate action required to be taken for the authorization,
issue and the sale of the Intelligent Polymers Common Shares has been validly
taken and on personal liability will attach to holder thereof solely by reason
of the ownership thereof.
3. The statements in the Registration Statement and Prospectus under the
caption "Taxation-Bermuda Tax Considerations" have been prepared and reviewed
by us and are correct in all material respects.
4. We hereby consent to the filing of this opinion with the Commission and
as an exhibit to the Registration Statement and Prospectus and to the reference
to this Firm under the captions "Enforceability of Civil Liabilities under
United States Federal Securities Laws", "Taxation-Bermuda Tax Considerations"
and "Legal Matters".
Yours faithfully,
Conyers Dill & Pearman
<PAGE> 1
Exhibit 10.1
DEVELOPMENT AND LICENSE AGREEMENT
DEVELOPMENT AND LICENSE AGREEMENT (this Agreement) is made the
[ ] day of October 1997, between
BIOVAIL LABORATORIES INCORPORATED,
a Barbados corporation incorporated under the
International Business Companies Act, 1991-24,
whose head office is Chelston Park
Building 2, Collymore Rock
St Michael BHI
Barbados, West Indies
(hereinafter referred to as "BLI")
- and -
INTELLIGENT POLYMERS LIMITED,
a company incorporated under the laws of Bermuda
whose head office is
Clarendon House
2 Church Street
Hamilton HM I I
Bermuda
(hereinafter referred to as "Polymer")
- - and -
BIOVAIL CORPORATION INTERNATIONAL
a company incorporated under the laws of Canada
having its principal place of business at
2488 Dunwin Drive, Mississauga, Ontario,
<PAGE> 2
-2-
Canada L5L 1J9
(hereinafter referred to as "BCI")
WHEREAS:
BLI has acquired and developed expertise, know-how and technology relating to
the formulation of controlled release medicines, and has expertise in the
commercialization of pharmaceutical and drug delivery products, including
controlled release medicines, throughout the world; and
BLI is knowledgeable in the development, registration and licensing of
pharmaceutical products; and
BCI is a company engaged in research and development into various drug delivery
systems and in the development of pharmaceutical and drug delivery products;
and
Polymer is a company established for the purpose of contributing to and
participating in the development and commercialization of pharmaceutical and
drug delivery products, including controlled release medicines, and to
facilitate the introduction of such products into the pharmaceutical market;
Polymer is desirous of obtaining access to the Biovail Technology to develop
certain Products; and
Polymer wishes to grant to BLI the right to Market the Products so Developed in
exchange for the Royalties and other consideration specified in this Agreement;
and
BLI has agreed to make available to Polymer the Biovail Technology and to
Develop certain Products using the Biovail Technology on the terms, conditions
and limitations of this Agreement with a view to the successful development,
formulation and marketing of the Products and to cause BCI to perform its
obligations under this Agreement;
BCI has agreed to assist in the Development of those Products; and
BLI has agreed to assist in the commercialization of the Products by, inter
alia, arranging for and entering into Licenses for the Marketing of the
Products.
<PAGE> 3
-3-
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS
In this Agreement the following definitions shall apply:
1.1 ADDITIONAL PRODUCT means BLI's formulation of a once-daily controlled
release nifedipine which is intended to be AB rated bioequivalent to
Procardia XL currently marketed in the U.S.A. by Pfizer Inc. AB RATED
BIOEQUIVALENT means that the Product may be substituted for the
corresponding brand name medicine by a pharmacist in filling a
prescription for the brand name medicine.
1.2 AFFILIATED COMPANY means any company that is Controlled directly or
indirectly by one of the parties, or any company that directly or
indirectly controls one of the parties, or any company that is directly or
indirectly controlled by a company which also directly or indirectly
controls one of the parties, so that Affiliated Company shall include any
parent or subsidiary of one of the parties, or any direct or indirectly
held subsidiary of one of the parties. AFFILIATE has a corresponding
meaning.
1.3 AGREEMENT means this agreement, all schedules to this Agreement and all
instruments supplemental to this Agreement or in amendment or confirmation
of this Agreement; HEREOF, HERETO and HEREUNDER and similar expressions
mean and refer to this Agreement and not to any particular article or
section; and ARTICLE, PARAGRAPH, or SCHEDULE mean and refer to the
specified article, paragraph, or schedule of or to this Agreement.
1.4 ANDA means an Abbreviated New Drug Application filed with the FDA to
obtain Regulatory Approval for an AB-rated generic drug.
1.5 ANDA PRODUCT means a Product for which Regulatory Approval has been
granted on the basis of an ANDA.
1.6 APPLICATION FOR REGULATORY APPROVAL means an application made to a
Regulatory Authority for permission to Market and/or Manufacture the
Product in any country in which that Regulatory Authority has
jurisdiction.
1.7 AVAILABLE FUNDS means the sum of:
<PAGE> 4
-4-
(a) the aggregate amount of funds received by Polymer upon
the completion of the offering contemplated by the Prospectus;
(b) interest and all other income earned from time to time
as a result of any temporary investment of the funds described in
sub-paragraph (a) above or interest or income thereon;
(c) any other revenues received by Polymer from BLI or any
other Person under any agreements between Polymer, on the one
hand, and BLI or such Person, on the other hand, whether of a
capital or income nature, including, without limitation, funds
received by Polymer pursuant to Sections 4 and 9 of this
Agreement; and
(d) any portion of the Litigation Reserve which was not
expended pursuant to paragraph 5.6 or which remains after the
Parties agree not to seek Regulatory Approval of the Additional
Product in the U.S.A.
less the sum of:
(e) all necessary or appropriate expenses incurred in
operating the business of Polymer (other than amounts paid under
this Agreement), including, without limitation, legal and
administrative expenses, amounts paid by Polymer from time to
time under the Services Agreement and reasonable reserves for
present and future obligations of Polymer; and
(f) prior to Regulatory Approval of the Additional Product,
the Litigation Reserve, and after Regulatory Approval of the
Additional Product, that portion of the Litigation Reserve that
was expended pursuant to paragraph 5.6; and
(g) an amount in respect of working capital to be retained
by Polymer as it shall determine, not in excess of US $1 million.
1.8 BIOVAIL means BCI and BLI collectively.
1.9 BIOVAIL TECHNOLOGY means the Patent Rights and the Know-How.
<PAGE> 5
-5-
1.10 BUSINESS DAY means any day other than a Saturday, Sunday or statutory
holiday in the Territory.
1.11 GMP means the Good Manufacturing Practices, as prescribed from time to
time by the FDA and CGMP means current Good Manufacturing Practices.
1.12 CONTROL means the ownership, directly or indirectly, of more than fifty
percent (50%) of the voting rights attached to the issued voting shares of
a party to this Agreement, or the ability to elect a majority of the Board
of Directors of a Party to this Agreement, or the possession of a
contractual right to control the activities of a Party to this Agreement.
1.13 DESIGNATED PRODUCTS means those Products that Polymer may add to Schedule
1.37 from time to time as provided in paragraph 2.16 of this Agreement.
1.14 DEVELOP means to perform all of the work required to be done for any
Product to prepare and file an Application for Regulatory Approval for
that Product, to prosecute that Application for Regulatory Approval, and
to obtain Regulatory Approval for that Product, and includes, without
limitation, such animal toxicology studies, formulation development, in
vitro and analytical testing, clinical trials and evaluations, including,
as appropriate, Phase I, II and III clinical studies, manufacturing
scale-up, process validation studies, and such other clinical tests or
studies as BLI may from time to time reasonably deem appropriate under
Article 2 for the purposes set out therein, and DEVELOPED has a
corresponding meaning.
1.15 DEVELOPMENT COSTS means all of the expenses incurred by BLI or BCI in
connection with the performance of their obligations under this Agreement,
including, without limitation, research expenses (including salaries,
benefits and supplies), general and administrative expenses, capital asset
costs and all other costs and expenses.
1.16 EFFECTIVE DATE means the date of this Agreement set out on page 1.
1.17 EXCLUDED PRODUCT means a pharmaceutical formulation or presentation of
any Product that is not identical to,
<PAGE> 6
-6-
or capable of substitution for, a Product Developed by BLI for
Polymer under the terms of this Agreement.
1.18 FDA means the Food and Drug Administration of the United States of
America or any successor agency.
1.19 FINANCIAL NOTICE means a notice delivered by Polymer to BLI, along with
quarterly financial statements of Polymer, advising BLI that Polymer has
cash or cash equivalents of less than US$3 million.
1.20 FIRST COMMERCIAL SALE means, for any Product, and in any country in the
Territory, the actual first arm's length sale of that Product by BLI, or
an Affiliate or Licensee of BLI to a third party pursuant to a License for
that Product from Polymer to BLI effective in that country.
1.21 IND means a preliminary application made to the FDA seeking permission to
commence the tests and studies necessary for Regulator Approval of a
Product.
1.22 KNOW-HOW means all scientific, technical, medical and marketing data,
information, expertise, trade secrets, manufacturing, mixing and
production procedures, technical assistance, and shop rights, whether
generally known to others or not, and relating to a Product or to the
processing, preparing, manufacturing, making, testing, or to the
registering, use or sale, of a Product, and includes:
(a) characteristics, selection, judgment of properties and
data relating to materials used or useful in the processing
preparing, manufacturing, making and testing of such
pharmaceutical compounds;
(b) information and data relating to processes, techniques,
equipment and methods used or useful in the processing,
preparing, manufacturing, making, testing or packaging of such
pharmaceutical compounds;
but does not include Clinical Information.
1.23 LICENSE means an agreement relating to the Manufacture or Marketing of
the Product between BLI or Polymer, or an Affiliate of BLI or Polymer, and
some other person.
<PAGE> 7
-7-
1.24 LICENSEE means a Person licensed by Polymer or BLI, or any Affiliate of
Polymer or BLI, to Manufacture and/or Market the Product.
1.25 LICENSE PERIOD means, for any Product and in any country in the
Territory, the longest of a period of time commencing on the date of
Regulatory Approval of the Product in that country and continuing until:
(a) the expiration of any patents in that country covering
that Product;
(b) if there are no such patents, 10 years from the date of
the first commercial sale of that Product in that country; or
(c) the minimum time period specified in any license
agreement granting BLI or BCI rights to use any technology
relating to the Product in that country.
1.26 LITIGATION RESERVE means an amount of one and one-half million US dollars
(US$1.5 million) to be retained by Polymer and used only for the purposes
specified in paragraph 5.6, except that any portion of the Litigation
Reserve remaining after Regulatory Approval of the Additional Product
shall become part of the Available Funds.
1.27 MANUFACTURE means to process, prepare, make, test, package or label the
Product, and Manufacturing and Manufactured have corresponding meanings.
1.28 MARKET means to promote, distribute, test, market, advertise, sell or
offer to sell, and MARKETING has a corresponding meaning.
1.29 NDA means a New Drug Application filed with the FDA, and may include new
drug applications, product license applications and establishment license
applications.
1.30 NDA PRODUCT means any Product for which Regulatory Approval is obtained
based on an NDA.
1.31 NET SALES means the total of all amounts received by BLI, BCI or Polymer,
or by an Affiliate or Licensee of BLI, BCI or Polymer for any Product sold
to arm's length Purchasers (but excluding sales by BLI, BCI or
<PAGE> 8
-8-
Polymer to an Affiliate or Licensee of BLI, BCI or Polymer,
respectively, for resale to Purchasers, and excluding the price of
samples sold by BLI, BCI or Polymer, or an Affiliate or Licensee
of BLI, BCI or Polymer, respectively) net of:
(a) distributors', wholesalers' or trade discounts or
rebates, and rebates paid to customers for distribution services;
(b) price adjustments to customers' inventories to address
market price declines;
(c) any royalty or other similar payment due by the seller
of any relevant Product to any third party (which is not an
Affiliate or Subsidiary of BLI, BCI or Polymer) in respect of the
sale of such Product pursuant to a license, sales or other
agreement or understanding;
(d) charge-backs or rebates actually allowed and taken on
such sales in such amounts as are customary in the trade and are
specifically related to the Products (excluding cash discounts,
except for normal trade discounts not exceeding 5% of gross sales
for early payment of invoices);
(e) trade samples and other free goods;
(f) duties and taxes on any sale to the extent separately
included in the amount billed;
(g) transportation charges separately itemized;
(h) credits for product returns;
(i) other allowances or deductions agreed on with and
actually given to Purchasers.
1.32 PARTY means either Polymer, BCI or BLI, and PARTIES means any two or more
of them.
1.33 PATENT RIGHTS means, collectively, any patent application or issued
patent, including any continuation, divisional, re-issue and
re-examination applications, filed by, or issued or granted to BLI or BCI
or any Affiliate of BLI or BCI or licensed to BLI or BCI or any Affiliate
of BLI or BCI which describes or claims any
<PAGE> 9
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Product, any intermediate used or useful in Manufacturing any Product,
or any use of any Product including, without limitation, the patents
and patent applications listed in Schedule 1.33.
1.34 PERSON means an individual, partnership, joint venture, trustee, trust,
corporation, unincorporated organization or other entity or a government,
state or agency or political subdivision thereof, and pronouns have a
similarly extended meaning.
1.35 PRODUCT DEVELOPMENT means all of the work required to be done for any
Product to prepare and file an Application for Regulatory Approval for
that Product, to prosecute that Application for Regulatory Approval and to
obtain Regulatory Approval for that Product, and includes, without
limitation, such animal toxicology studies, formulation development, in
vitro and analytical testing, clinical trials and evaluations including,
as appropriate, Phase I, II and III clinical studies, manufacturing
scale-up, process validation studies, and such other supplemental or
additional clinical tests or studies as BLI may from time to time
reasonably deem appropriate under Article 2 for those purposes.
1.36 PRODUCT DEVELOPMENT PROGRAM means a program relating to any Product and
specifying work plans and budgets for the work to be done by BLI under the
terms of this Agreement to Develop that Product.
1.37 PRODUCTS means the once-daily controlled release formulations of the drug
compounds identified in the left hand column of Schedule 1.37 hereto,
which drug compounds are also contained in the brand name formulation of
the drug compound identified in the right-hand column of Schedule 1.37,
and PRODUCT means any one of them, and includes once-daily controlled
release products added pursuant to the provisions of paragraphs 2.15 and
2.16 of this Agreement.
1.38 PRODUCT LICENSING FEE means any one-time, infrequent, not in the ordinary
course or special payments fee or amount that BLI, BCI or Polymer may
actually receive from a Licensee, pursuant to the terms of a license
agreement, as consideration for entering into a license for a Product, and
excludes any amounts paid to any of BLI, BCI or Polymers by a Licensee:
<PAGE> 10
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(a) for tests or studies performed for a Licensee;
(b) as advances on Manufacturing charges;
(c) as compensation for expansion of Manufacturing
capabilities; and
(d) which is refundable to a Licensee or is to be credited
against charges for services or products provided by BLI or BCI.
1.39 PROSPECTUS means the prospectus included in the registration statement on
Forms F-I and F-3 (Registration Nos. 333-35833 and 333-35839 filed with
the Securities and Exchange Commission on September 17, 1997, in the form
that such registration statement was declared effective by the U.S.
Securities and Exchange Commission.
1.40 PURCHASERS means any Person, firm or company other than BLI, BCI,
Polymer, their Affiliated Companies, and their Licensees hereunder who
purchase Products in arm's length transactions.
1.41 REGULATORY APPROVAL means approval to Market pharmaceutical products
issued by government health authorities.
1.42 REGULATORY AUTHORITY means a government health authority or other body
having jurisdiction to grant Regulatory Approvals within the Territories.
1.43 SERVICE AGREEMENT means the Services Agreement effective as of the date
hereof among BLI and Polymer, pursuant to which BLI has agreed to provide
certain services to Polymer as Polymer may from time to time request.
1.44 SUB-LICENSEE means any Person licensed by BLI to Manufacture and/or
Market a Product in any country in the Territory.
1.45 TERM means the period of time that this Agreement will remain in force
unless earlier terminated in accordance with the provisions of Section 12.
1.46 TERRITORY means all countries of the world except for Canada.
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1.47 Words importing the singular include the plural and vice-versa and words
importing gender include all genders.
1.48 The division of this Agreement into Articles, Sections and Schedules and
the insertion of headings are for convenience of reference only and shall
not affect the interpretation or construction of this Agreement.
2. DEVELOPMENT OF PRODUCTS
2.1 BLI shall, in accordance with the terms and conditions of this Agreement,
use diligent efforts to (i) conduct toxicity studies, formulation
development and clinical studies for, and pursue Regulatory Approval in
the Territory of, the Products other than the Additional Product, and (ii)
conduct clinical testing for and pursue Regulatory Approval in the
Territory of, the Additional Product, and to that end BLI, BCI and Polymer
agree as follows:
ENGAGEMENT OF BLI
2.2 Polymer hereby engages BLI to use diligent efforts to (i) conduct
toxicity studies, formulation development and clinical studies for, and
pursue Regulatory Approval in the Territory of, the Products other than
the Additional Product, and (ii) conduct clinical testing for and pursue
Regulatory Approval in the Territory of, the Additional Product, all in
accordance with the terms of this Agreement. BLI hereby accepts that
engagement.
2.3 BLI shall use diligent efforts to (i) conduct toxicity studies,
formulation development and clinical studies for, and pursue Regulatory
Approval in the Territory of, the Products other than the Additional
Product, and (ii) conduct clinical testing for and pursue Regulatory
Approval in the Territory of, the Additional Product and shall undertake
such other activities as the parties may reasonably agree from time to
time.
DEVELOPMENT WORK BY BCI
2.4 BLI hereby engages BCI to perform such research, development and
experimentation activities and such related
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tests and studies as BLI may from time to time during the Term of this
Agreement delegate or assign to BCI. BCI agrees to perform such of the
activities, tests and studies as may be delegated or assigned to it by
BLI.
2.5 Each of BLI and BCI agrees that Polymer may enforce the terms of this
Agreement directly against BCI with respect to the performance of any
activity, test or study delegated or assigned to BCI by BLI as if Polymer
had itself engaged BCI to carry out such activity, test or study. Polymer
accepts the performance of any such activity, test or study by BCI as
performance by BLI itself, and acknowledges that BCI may fulfil any of the
obligations of BLI under this Agreement. Each of BLI and BCI fully and
unconditionally guarantees the performance by the other of its obligations
under this Agreement.
PRODUCT DEVELOPMENT PRIORITIES
2.6 Polymer and BLI shall negotiate in good faith, as soon as reasonably
possible after the Effective Date, to determine the relative priorities
for the Development of each of the Products. Biovail shall then develop
budgets for each of the stages of Product Development for each Product,
consistent with these priorities.
PRODUCT DEVELOPMENT PROGRAM
2.7 For each of the Products, BLI shall prepare and submit to Polymer a
Product Development Program consistent with the priorities and budgets
established under paragraph 2.6. BLI shall diligently perform or cause
BCI or any other qualified person to perform the tasks and activities set
out in the Product Development Program.
2.8 Each of BLI, BCI and Polymer shall diligently carry out their respective
obligations under the Product Development Program and shall report any
significant deviations therefrom to the Other in a timely manner.
2.9 BLI shall produce all information and data necessary to file any IND or
NDA for any Product developed hereunder.
<PAGE> 13
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MODIFICATIONS TO SCHEDULING AND PRIORITIES
2.10 Polymer acknowledges that technological and commercial uncertainties may
make it necessary for BLI to modify or change the relative priorities
assigned to Product Development Programs pursuant to paragraph 2.6. BLI
shall notify Polymer of any such changes or modifications planned by BLI.
If the Parties are unable to agree on those proposed changes or
modifications, BLI may, in its sole discretion, determine from time to
time:
(a) the resources of BLI and BCI (whether facilities,
equipment, personnel or otherwise) to be devoted or dedicated to
the Development of each Product;
(b) the priority to be given to any part of a Product
Development Program;
(c) the allocation of the resources of BLI or BCI (whether
facilities, equipment, personnel or otherwise) that are to be
made available to Polymer for each of the stages of any Product
Development Program; and
(d) the portion of Available Funds allocated to each
activity within the budget for each individual Product under this
Agreement.
2.11 Polymer acknowledges that each of BLI and BCI has and shall have from
time to time during the term of this Agreement other projects in various
stages of development for their own accounts and for the account of third
parties, as well as commitments to third parties to develop other
products. Polymer acknowledges that such projects and commitments shall
require the expenditure of BLI's and BCI's own funds and the commitment of
BLI's and BCI's resources to development projects which do not involve the
Products or Polymer. Nothing in this Agreement requires BLI or BCI to
devote any designated or minimum amount of resources to the Products. The
development of the Products shall be subject to the provisions of
paragraph 2.10.
2.12 Notwithstanding the provisions of paragraph 2.11 above, if at any time
during the Term of this Agreement BLI is persistently unable or unwilling
to devote its own re-
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sources or those of BCI to the Products in the manner contemplated by this
Agreement and in a manner consistent with reasonable commercial practice,
Polymer may, upon 60 days' written notice to BLI, and upon BLI's failure
to take, or to agree to take, within such period, reasonable steps to
remedy such situation, engage other Persons to continue the Development of
the Products and to utilize any of the Available Funds therefor.
THIRD-PARTY AGREEMENTS
2.13 Polymer acknowledges that BLI may perform research and development work
with respect to any Excluded Product in any country for third parties or
for BLI's own account, or with respect to any other products, using the
Biovail Technology, any of the data or information created or generated
during the Development of any of the Products or any other technology
available to Biovail. All such research and development work shall be
paid for with funds other than the Available Funds. Any additional Patent
Rights, Know-how or other benefits derived from such research and
development work shall be the absolute and exclusive property of BLI
2.14 BLI may, in the Development of the Products, use any intellectual
property or technology of any third person that BLI is lawfully entitled
to use, and may in its sole discretion attempt to obtain any other rights
to use, or licenses under, any intellectual property or technology of any
third person that BLI determines to be necessary or useful to enable BLI
to fulfil its obligations under this Agreement.
SUBSTITUTED PRODUCTS
2.15 If at any time during the Term of this Agreement:
(a) BLI determines that the Development of any Product
cannot be completed within the priorities and budgets established
under paragraph 2.6;
(b) any Applicafion for Regulatory Approval for any Product
is not filed or appears unlikely to be filed within three (3)
years of the Effective Date;
<PAGE> 15
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BLI shall so notify Polymer. BLI and Polymer shall co-operate in good
faith to identify new products to be added to Schedule 1.37, and to
modify the list of priorities and budgets accordingly. If BLI and
Polymer are unable to agree on such new products or modified
priorities, BLI shall continue to Develop the remaining Products in
accordance with the Terms of this Agreement.
OTHER PRODUCTS
2.16 Polymer shall have the right from time to time, with the consent of BLI,
to add other Products (the "Designated Products") to Schedule 1.37 to this
Agreement for Development hereunder; provided that:
(a) The Board of Directors of Polymer shall (i) recommend
in writing that such other Products be developed hereunder and
(ii) acknowledge in writing that Polymer is willing to apply a
portion of the Available Funds to the development of such other
Products;
(b) At BLI's request, Polymer shall irrevocably agree to
expend sufficient funds from the Available Funds to develop such
other Products pursuant to the terms of this Agreement.
2.17 Upon the compliance by Polymer with the requirements of paragraph 2.16,
the Designated Products shall be added to Schedule 1.37 which shall be
deemed to be amended accordingly.
FAILURE TO DEVELOP
2.18 In no event shall BLI or BCI be liable to Polymer for (a) any partial or
total failure to develop any Product in the manner anticipated by BLI, BCI
or Polymer or (b) any result or outcome or evaluations, trials, tests or
decisions (by BLI, BCI or Polymer) relating to Product Development.
<PAGE> 16
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NO WARRANTIES
2.19 Each of BLI and BCI disclaims any express or implied warranty (i) that
the use of any Products will be free from claims of patent infringement,
interference or unlawful use of proprietary information of any third party
or infringement of any intellectual property rights generally and (ii) as
to the accuracy, reliability, technological or commercial value,
comprehensiveness or merchantability of such Products or their suitability
or fitness for any purpose including, without limitation, the design,
development, manufacture, use or sale of such Products. Each of BCI and
BLI disclaims all other warranties of whatever nature, express or implied.
DEDICATION OF FUNDS
2.20 Polymer acknowledges that all of the Available Funds shall be paid to BLI
in accordance with the terms of this Agreement to be used by BLI to the
extent necessary to complete the Development of the Products. Polymer
shall not, except as provided in paragraphs 2.12, 7.4 and 7.15, enter into
any agreement or understanding with, or make any payment to, any Person
that is not a Subsidiary or Affiliate of BLI, with respect to the
development of, or to the making, testing or studying of any Product,
without the prior written consent of BLI.
PROPERTY OF BLI
2.21 All INDs, NDAs, and NDAs filed hereunder, and all information, data and
technology developed pursuant to the terms of this Agreement, shall remain
the property of BLI. BLI shall, at the request of Polymer on reasonable
notice to BLI, give Polymer reasonable access to, and the right to use,
all such documents, information, data and technology to the extent
necessary to enable Polymer to fulfil its obligations and exercise its
rights under this Agreement.
2.22 Notwithstanding the license granted by this Agreement, all data and
information generated, developed or acquired by or for BLI during or for
any Product Develop-
<PAGE> 17
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ment Program shall be the property of BLI, and shall
not be used by Polymer except for the purpose of Mar
keting the Product in accordance with the terms of the
license granted by paragraph 7.1 of this Agreement.
None of such data or information may be used by Polymer
for or in association with the Manufacture or Marketing
of any other product.
3. REGISTRATION OF PRODUCTS
3.1 BLI shall prepare and file any IND necessary to enable BLI and BCI to
carry out their obligations under this Agreement for any Product.
NDAS AND ANDAS
3.2 As soon as reasonably possible after completion of the necessary tests
and studies for any Product, BLI shall prepare an Application for
Regulatory Approval of that Product, in the form of an NDA or ANDA as
required. BLI shall be solely responsible for all aspects of the
prosecution of such NDA or ANDA. BLI shall not, however, be liable or
responsible to Polymer in the event that any NDA or ANDA is not approved
or if there is any delay (whether foreseen or unforeseen) in obtaining
Regulatory Approval of any Product.
REGISTRATION PROCEDURES
3.3 BLI shall keep Polymer fully advised of all steps taken by BLI, and by
BCI on behalf of BLI, the prosecution of each Application for Regulatory
Approval referred to in paragraph 3.2 above, and of the progress of each
Application for Regulatory Approval. BLI shall provide to Polymer regular
reports in respect of each such Application for Regulatory Approval
undertaken by BLI. In particular, BLI shall advise Polymer of the dates
of submission and approval of INDs, NDAs, and ANDAs.
3.4 BLI shall have the right to select (in its reasonable discretion) the
order in which Applications for Regulatory Approval for any Product are
filed with the FDA but shall be guided in its choice by priorities
determined under paragraph 2.6 and by the marketing and sales needs of
Polymer as communicated by Polymer to
<PAGE> 18
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BLI in discussions and consultations between Polymer and BLI from time to
time.
COSTS
3.5 The costs and expenses of any and all regulatory filings and proceedings
relating to the FDA or any other government authority shall be borne
solely by Polymer, and shall be paid for by Polymer, or reimbursed to BLI,
as the case may be, from the Available Funds.
4. ADDITIONAL FUNDING
4.1 Polymer shall deliver to BLI on or before the tenth (10) day of each
month a statement specifying the Available Funds spent to date and the
amount of Available Funds remaining. At any time that the amount of
Available Funds falls below three million dollars (US Funds),
(US$3,000,000), Polymer shall deliver to BLI a Financial Notice certifying
that amount.
4.2 No later than 90 days after delivery of the Financial Notice, to the
extent BLI has not exercised the Purchase Option or extended the
termination date of the Purchase Option or extended the termination date
of the Purchase Option in each case as provided herein, Polymer and BLI
will commence good faith negotiations as to any terms on which BLI might
provide additional funding for any or all of the Products, taking into
account relevant issues including but not limited to the amount and timing
of such funding, possible alterations in the terms of the Biovail Option
if the Biovail Option has not yet been exercised or the possibility of
granting Biovail a renewed Biovail Option if the Biovail Option has not
yet been exercised, and the terms of this Agreement, including those that
relate to Manufacturing and Licensing.
4.3 If the parties successfully negotiate new funding terms within sixty (60)
days after the commencement of such negotiations, the Purchase Option can
be extended for so long as BLI provides funding, but not beyond September
30, 2002. During such period of negotiation between BLI and Polymer,
Polymer shall have the right but shall not be required to expend any
Available Funds on Development Costs.
<PAGE> 19
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4.4 In the event that Polymer and BLI fail to reach an agreement under
paragraph 4.2 within sixty (60) days after the commencement of such
negotiations, BLI shall grant to Polymer an exclusive License under all
remaining Products under the Biovail Technology (as reasonably agreed to
by BLI and Polymer) to use, manufacture (except where such right is held
by a third party), obtain manufacturing for, sell or otherwise market such
products in the Territory for the License Period. BLI shall in addition
grant to Polymer an exclusive License in the Territory for all of its
patent rights, other intellectual property and supply arrangements
relating thereto (as reasonably agreed to by BLI and Polymer as being
necessary to develop further any such product) for the License Period, and
a nonexclusive, royalty-free license after the expiry of the License
Period. The provisions of Articles 3, 7, 8, 9 and 11 of this Agreement
shall not apply to any Products in respect of which BLI grants to Polymer
a License under the Biovail Technology pursuant to this paragraph.
5. PAYMENT FOR PRODUCT DEVELOPMENT
INITIAL PAYMENT
5.1 Polymer shall pay to BLI, out of Available Funds, on the date of closing
of the Unit Offering (as defined in the Prospectus), the sum of three and
one-half million dollars (U.S.) (US$3.5 million) for the right to use the
Biovail Technology. No amount of that payment shall be refunded to
Polymer or credited against any royalties or other amount payable by
Polymer to BLI under this Agreement.
REIMBURSEMENT OF DEVELOPMENT COSTS
5.2 Polymer shall make quarterly payments to BLI in advance, and on or before
the first day of each calendar quarter, in the amount of the Development
Costs expected to be incurred in that calendar quarter, as set out in the
budgets prepared by BLI in accordance with the provisions of this
Agreement. Biovail shall provide to Polymer within forty-five (45) days
of the end of each calendar quarter, a detailed report specifying the
Product Development work done and all Development Costs incurred during
the preceding calendar quarter
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and the amount to be charged to Polymer for that work. Any difference
between the amount paid in advance by Polymer and the amount to be charged
to Polymer shall be paid by Polymer to BLI within thirty (30) days of the
receipt by Polymer of such detailed report, or credited to Polymer on the
next quarterly payment, as the case may be, provided, however, that the
aggregate of all such amounts paid shall not exceed the aggregate amount
of Available Funds.
5.3 The amounts to be charged to and paid by Polymer pursuant to this
Agreement are the full amounts of the Development Costs, billed to Polymer
at a rate of BLI's or BCI's fully absorbed costs plus forty-five per cent
(45%) of those costs, except for costs which are associated with payments
to third party contract research organizations for services performed
under this Agreement, which shall be billed at BLI's or BCI's actual cost
plus fifteen per cent (15%) of those costs.
SUFFICIENCY OF FUNDS; ETC.
5.4 Neither Polymer nor BLI makes any warranty, express or implied, that the
Available Funds will be sufficient for the completion of the Product
Development work for any of the Products.
ADDITIONAL PRODUCT (NIFEDIPINE XL)
5.5 Within fifteen (15) days after the Effective Date of this Agreement,
Polymer shall pay to BLI out of Available Funds:
(a) the sum of $1.25 million U.S. Dollars in respect of the
Product Development costs for the Additional Product incurred by
BLI and BCI during the months of May and June 1997; and
(b) an amount calculated in accordance with the method set
out in paragraph 5.2 for the Product Development costs incurred
by BLI and BCI between July 1, 1997 and the date of closing of
the Unit Offering as defined in the Prospectus.
<PAGE> 21
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5.6 Polymer shall set aside and maintain in a separate interest bearing
account, satisfactory to BLI, the Litigation Reserve and shall use the
funds in that Litigation Reserve only for the purposes of financing any
possible litigation against Polymer or against BLI arising from an
Application for Regulatory Approval of the Additional Product in the
U.S.A. Polymer shall, at the written request of BLI, provide to BLI an
accounting of the disposition of any funds from that Litigation Reserve,
and shall promptly reimburse BLI from the Litigation Reserve for any
expenses incurred by BLI relating to any such litigation.
5.7 Biovail shall have full carriage and control of any such litigation, and
shall be reimbursed by Polymer from the Litigation Reserve, for the cost
of such litigation, until such time as Biovail, in its sole discretion,
determines that such carriage and control should be assumed by Polymer.
Polymer shall, at the request of Biovail, assume such carriage and
control, and the cost of the litigation.
6. REPORTS AND RECORDS FOR PRODUCT DEVELOPMENT
QUARTERLY REPORT
6.1 Within 45 days after the end of each calendar quarter during which any
Available Funds were expended in respect of development of any Products,
BLI shall provide to Polymer a reasonably detailed report setting forth:
(a) the total Development Costs incurred during that
quarter:
(b) a summary of the Development work performed hereunder
by BLI, BCI, their Affiliates or Subsidiaries, and their
respective agents during that quarter; and
(c) the status of all Product Development Programs at the
end of that quarter.
FINAL REPORT
6.2 Within 90 days after the expenditure by Polymer of all Available Funds,
BLI shall provide to Polymer a final
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report setting forth a reconciliation of all Development Costs paid by
Polymer through the date of such expenditure.
RECORDS
6.3 Each of BLI and BCl shall keep and maintain, in accordance with generally
accepted accounting principles as applied in Canada, proper and complete
records and books of account documenting all Development Costs. Polymer
shall have the right, at all reasonable times and at its own expense, to
examine or to have examined by a firm of chartered accountants or
similarly qualified persons reasonably acceptable to BLI and BCI, as the
case may be, pertinent books and records of BLI and BCI, for the sole
purpose of determining the correctness of Development Costs invoiced to
and paid by Polymer. Such examination shall take place not more
frequently than twice per year and not later than two years following the
date of the invoice in question.
7. MANUFACTURING AND MARKETING RIGHTS
LICENSE TO MANUFTCTURE AND MARKET
7.1 Subject to the provisions of paragraph 7.12 of this Agreement and in
consideration of the payments made to Polymer by BLI hereunder, BLI hereby
grants to Polymer an exclusive License, including as against BLI, BCI and
their respective Affiliates, to use the Biovail Technology and the
information and data compiled by BLI pursuant to the terms of this
Agreement to Manufacture and Market each of the Products throughout the
Territory during the License period, and a non-exclusive, royalty-free
license after the expiry of the License Period.
7.2 Pursuant to the License granted to Polymer under paragraph 7.1, and
subject to the manufacturing rights retained by Biovail as set out in
paragraphs 7.14 and 7.15, Polymer may, without any consent or
authorization from BLI or any Affiliated Company or Associated Company,
authorize or license any other Person, firm, corporation or legal entity
to Manufacture and/or Market the Products in any or all countries in the
Territory. For that purpose, Polymer may grant Licenses of any or
<PAGE> 23
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all of the rights conveyed to it by this Agreement of the same scope as, or
of narrower scope than, the license granted to Polymer by this Agreement,
and may license others to do any or all of the things that Polymer is
entitled to do under this Agreement.
LICENSE TO BLI FOR CANADA
7.3 In consideration of the Product Development work undertaken by BLI,
Polymer hereby grants to BLI an exclusive License to use the information,
data and technology developed pursuant to the terms of this Agreement to
Manufacture and Market each of the Products in Canada during the License
period, and a non-exclusive, royalty-free license after the expiry of the
License Period.
7.4 Pursuant to the License granted to BLI under paragraph 7.3, BLI may,
without any consent or authorization from Polymer or any Affiliated
Company or Associated Company, authorize or license any other Person,
firm, corporation or legal entity to Manufacture and/or Market any of the
Products in Canada. For the purpose, BLI may grant Licenses of any or all
of the rights conveyed to it by this Agreement of the same scope as, or of
narrower scope than, the license granted to BLI by this Agreement, and may
license others to do any or all of the things that BLI is entitled to do
under this Agreement.
7.5 BLI shall pay to Polymer or shall cause any Sub-Licensee of BLI to pay to
Polymer a royalty of three percent (3%) of the Net Sales of any Product
sold by BLI, its Affiliated Companies and its Sub-Licensees in Canada.
7.6 BLI's obligations under paragraph 7.5 of this Agreement with respect to
the Product shall expire, on the expiry of the License Period in Canada.
7.7 BLI and Polymer shall each notify the other in writing of the date of the
first commercial sale of each of the Products by itself its Affiliated
Companies, or its Licensees in each country in the Territory, or Canada.
<PAGE> 24
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REPORTS
7.8 The royalty payment required by paragraphs 7.5 and 9.2(b) shall be due
and payable within sixty (60) days of the end of March, June, September
and December with respect to sales of each of the Products in the three
(3) month periods ending on the last days of March, June, September and
December. Such royalties and other payments shall be paid to Polymer, in
U.S. dollars, to such bank account as Polymer may designate, subject to
any requisite exchange controls, or other governmental consent, being
obtained. If such consent is not obtained, the royalty shall be paid to
such other bank account of Polymer or in such other currency (in the
equivalent of the amount due in U.S. dollars calculated at the mean of the
buy and sell rates of exchange as quoted to BLI by its main banker at the
due date for payment or the date of actual payment, whichever is earlier)
as may be permitted by such exchange control. BLI shall on payment of
royalties submit a written statement summarizing on a country by country
basis the accrual of the royalties in question together with a copy of the
quotations of the main banker of BLI on the currency rates in question.
7.9 Within sixty (60) days of the end of each calendar quarter, BLI shall
send to Polymer a statement certified by a financial officer of BLI
disclosing the Net Sales of the Product for the just-ended calendar
quarter, the total amount of the deductions referred to in paragraph 1.31
and the royalties due to Polymer.
7.10 BLI, if required so to do by any applicable tax law, may deduct any
governmental withholding tax required to be deducted by it on payment of
royalties hereunder but shall account to the relevant tax authorities for
the sum so deducted and provide Polymer with proof of such payment from
such authorities. BLI shall provide reasonable assistance to Polymer in
securing any benefits available to Polymer with respect to governmental
tax withholdings by any relevant law or double tax treaty.
7.11 BLI shall keep at its registered office, and shall cause its Affiliated
Companies and Licensees to keep, full and accurate records of the sales of
each of the Products for each country for purposes of compliance with its
obligations hereunder. Such records shall be
<PAGE> 25
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made available following the First Commercial Sale of the Product
in Canada for inspection by Polymer or an independent certified public
or chartered accountant of Polymer's choice during normal business
hours after reasonable notice, up to two (2) years after the
termination or expiration of this Agreement, and at Polymer's expense.
Such inspection shall occur no more often than once a year.
FAILURE TO MARKET
7.12 If any Product is not Muketcd in the U.S.A. by Polymer, an Affiliate of
Polymer or a Licensee of Polymer within nine (9) months from the date of
Regulatory Approval of that Product in the U.S.A. (unless the Marketing of
such Product is impeded or prohibited by any applicable law, regulation or
order), the License granted to Polymer for that Product for the Territory
shall be terminated. BLI shall thereafter, upon written notice to
Polymer, have the exclusive right to Manufacture, Market and License that
Product, in and throughout the Territory, subject to the provisions of
paragraphs 7.3 to 7.11.
7.13 Polymer shall use its reasonable efforts at the request of BLI to cause
any Licensee of Polymer to enter into a trademark user agreement on the
terms and conditions reasonably acceptable to BLI for the relevant
trademark to facilitate the Marketing of the Product by the Licensee under
BLI's trademark.
MANUFACTURING
7.14 Notwithstanding any rights or License granted or acquired by Polymer
under this Agreement, BLI shall have the exclusive right to Manufacture
each Product for sale in the Territory for a period of five (5) years from
the date of the first Regulatory Approval for that Product in the
Territory.
7.15 After the expiry of the five (5) year period referred to in paragraph
7.14, and as to any Product for which Polymer has acquired Manufacturing
rights, Polymer may obtain manufacturing of the Product from any qualified
third party, subject to the provisions of paragraphs 8.19 and 8.21.
<PAGE> 26
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REGULATORY COMPLIANCE
7.16 Each of BLI and Polymer shall ensure that all Products sold by either of
them, or by their respective Licensees, shall comply in all respects with
all applicable laws, regulations and standards affecting the Products, or
the promotion, labelling and advertising of the Products, and comply with
all applicable regulatory provisions of any government or Regulatory
Authority having jurisdiction over the sale of the Products.
LICENSE PAYMENTS TO THIRD PARTIES
7.17 Any License or other rights acquired by Polymer for any Product under the
provisions of this Agreement shall be subject to the terms of any
applicable existing licenses granted to BLI with respect to any Products
under any of the other agreements to which BLI may be a party. BLI agrees
to assign, sublicense or cause to be assigned or sublicensed to Polymer
the rights and obligations under such agreements.
8. MANUFACTURE OF PRODUCTS
PRODUCTION
8.1 During any period of time in which:
(a) BLI has the exclusive right to Manufacture any Product,
and
(b) Polymer has the right to Market or authorize another to
Market that Product in any country in the Territory; and
(c) subject to the provisions of paragraphs 7.14 and 9.20
of this Agreement,
BLI shall produce and supply to Polymer and Polymer shall acquire from
BLI, Polymer's entire requirements for that Product, in accordance
with the terms of this Agreement.
8.2 Polymer shall, at the request of BLI enter into a Supply agreement with
BLI for the Product in question on
<PAGE> 27
-27-
terms consistent with those in this Agreement and containing
other terms and conditions commonly found in such agreements, to
be negotiated in good faith between BLI and Polymer.
8.3 Upon execution of this Agreement and thereafter at the beginning of each
calendar quarter Polymer shall provide BLI with a forecast showing the
amount of the Product, by dosage strength, and expressed both in local
currency and in units, that Polymer expects to order from BLI in the
subsequent twelve (12) month period.
8.4 Provided that Polymer has delivered forecasts as required by paragraph
8.3, and subject to the provisions of paragraph 8.5, BLI shall ensure that
it has manufacturing capabilities sufficient to permit BLI to meet
Polymers orders for the Product, provided there is not more than a twenty
(20) percent divergence between Polymer's forecasts and the actual orders
for the Product. Provided BLI has used its reasonable best efforts to
meet the requirements of Polymer as reflected in those forecasts, BLI
shall have no liability to Polymer for any failure or inability to supply
Polymer with quantities of Product in excess of the estimated requirements
of Polymer as set out in such forecasts.
8.5 BLI shall notify Polymer if BLI determines that it will be unable to meet
the estimated requirements of Polymer, as soon as practicable but in any
event within fifteen (15) days after receiving such estimates.
PURCHASE ORDERS
8.6 During the Term of this Agreement, Polymer shall submit to BLI, at least
one hundred and twenty (120) days prior to the required date of delivery,
purchase orders for Polymer's requirements of the Product, identifying the
quantities of Product required by strength. Each purchase order shall
specify a delivery date which shall be not less than one hundred and
twenty (120) days following the date of receipt by BLI of such order. All
purchase orders placed by Polymer hereunder shall be firm, in a form
approved by BLI, and shall be sent by facsimile or by courier to such
address(es) as BLI may notify Polymer in writing.
<PAGE> 28
-28-
8.7 BLI shall confirm acceptance of all purchase orders delivered in
accordance with the provisions of paragraph 8.6, in writing or by
facsimile, within two (2) weeks of BLI's receipt thereof, unless BLI has
notified Polymer pursuant to paragraph 8.5 that BLI will be unable to fill
all or part of any such purchase order.
8.8 BLI shall fill Polymer's accepted orders in accordance with the delivery
dates specified in Polymer's purchase orders unless BLI has notified
Polymer pursuant to paragraph 8.5 that BLI will be unable to fill all or
part of any such purchase order.
MANUFACTURING PRICE AND ROYALTY
8.9 Polymer shall pay to BLI for each dosage strength of each Product
supplied to Polymer by BLI a price that is equivalent to one hundred and
twenty-five percent (125%) of BLI's fully absorbed standard cost of that
Product, as determined by generally accepted accounting principles as used
and applied in Canada.
PRODUCT QUALITY
8.10 BLI shall ensure that the Product is Manufactured in accordance with
applicable GMP standards and with the applicable FDA regulations.
8.11 BLI shall perform all quality control tests and other inspections
required by applicable GMP standards and FDA regulations.
8.12 BLI shall furnish to Polymer, for each lot of Product delivered to
Polymer, a certificate that such lot meets the quality control standards
set forth in the approved Application for Regulatory Approval, and a
certificate of analysis for each lot.
8.13 Polymer shall notify BLI, within thirty (30) days of its actual receipt
of each shipment of the Product, of any non-compliance of the Product with
the requirements of paragraph 8.10. If no notice of non-compliance is
delivered to BLI within such thirty (30) day period, the Product so
delivered shall be deemed to comply with the provisions of paragraph 8.10.
<PAGE> 29
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8.14 The provisions of paragraph 8.13 do not apply to any deficiencies in the
Product not reasonably detectable within thirty (30) days of actual
receipt of the Product by Polymer. Polymer shall notify BLI of any such
deficiencies within forty-five (45) days after they come to the attention
of Polymer. BLI shall have no liability to Polymer with respect to any
deficiencies of which BLI is not notified within such forty-five (45) day
period.
8.15 Each of BLI and Polymer shall:
(a) allow the other, on request, such request to be
provided ten (10) working days in advance, to inspect/audit its
facilities and records pertaining to the testing, storage and
Packaging of the Product to be sold by Polymer in the Territory
for compliance with applicable GMP and FDA standards and
regulations, provided such inspection or audit does not
unreasonably interfere with its business operations; and
(b) supply to the other all data and results relating to
all testing performed on the Product to be sold by Polymer in the
Territory.
8.16 BLI shall replace, at its own expense, and without any undue delay, any
Product that does not comply with the applicable GMP and FDA standards and
regulations.
8.17 If, following the timely delivery of a notice by Polymer pursuant to the
provisions of paragraph 8.13 hereof, Polymer and BLI do not agree that any
lot or lots of the Product referred to in the notice meets all the
requirements of paragraph 8.10 of this Agreement, that lot or those lots
of the Product shall be tested for such compliance, within thirty (30)
days after notice of the defect is delivered to BLI, by a reputable
independent pharmaceutical testing laboratory selected by mutual agreement
of BLI and Polymer. If BLI and Polymer are unable to agree on the
selection of that laboratory, the disagreement shall be resolved by
arbitration. The decision of such third party with respect to the
question of compliance shall be binding upon BLI and Polymer for the
purposes of paragraph 8.10 of this Agreement only. The costs of that
testing shall be borne by the losing Party.
<PAGE> 30
-30-
MANUFACTURING OPTION
8.18 Notwithstanding any other provisions of this Article 8, and upon the
expiry of the exclusive right of BLI under paragraph 7.14, Polymer may
manufacture, or obtain all but not less than all of its manufacturing
requirements of any Product Licensed to Polymer in the Territory from
another Person on terms which are more advantageous to Polymer than the
terms upon which BLI is willing to provide such manufacturing, as provided
for herein, subject to the terms and conditions of paragraphs 8.19 and
8.21.
8.19 At least 30 days before entering into any agreement with any other Person
providing for the Manufacture of the Product for Polymer by that other
Person, Polymer shall provide notice in writing to BLI of the terms of the
proposed agreement. That notice shall include an offer by Polymer to
purchase the Product from BLI on substantially the same terms and
conditions as have been offered by such other Person. BLI shall have the
right to accept or reject that offer in its sole discretion.
8.20 If BLI rejects or fails to accept such offer within 30 days of the date
of delivery of that notice, Polymer shall have the right (subject to the
provisions of paragraph 8.21) to enter into a Manufacturing Agreement with
such other Person or any other Person on terms and conditions which are in
the aggregate no more favorable to the proposed manufacturer than those
contained in the offer described in paragraph 8.19. Polymer shall at no
time during the Term of this Agreement enter into any Manufacturing
Agreement on terms more favourable to the proposed manufacturer than have
been offered to BLI, which offer shall again be subject to the provisions
of this paragraph 8.20.
8.21 The identity of any third-party manufacturer shall be subject to BLI's
reasonable approval as to such Person's capability to manufacture the
Products, which approval may be withheld only if any such manufacturer has
insufficient manufacturing capabilities to manufacture the Products in
accordance with the requirements of this Agreement (including lack
of compliance with GMP), or if such manufacturer's activities will have a
<PAGE> 31
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material adverse effect on BLI's overall competitive position in
the pharmaceutical industry.
8.22 If BLI refuses to approve a proposed manufacturer for any one or more of
the Products, BLI shall supply that Product to Polymer, in accordance with
the terms of this Agreement, for a price that is equivalent to the greater
of:
(a) prevailing market rates, or
(b) one hundred and fifteen per cent (115%) of BLI's fully
absorbed cost of that Product, as determined by generally
accepted accounting principles as used and applied in Canada.
RELEASE
8.23 BLI shall be released from the supply obligation and Polymer from the
purchasing obligation as set forth in paragraph 8.1, in the following
circumstances, and to the extent required by those circumstances:
(a) If the term of any agreement in respect of such supply
of Products shall expire in accordance with its terms and
provisions.
(b) If the Product delivered by BLI shall have repeatedly
failed to comply with the quality control specifications
established therefor and BLI fails satisfactorily to remedy such
failure after written notice to such effect from Polymer. Any
disagreement regarding Biovail's compliance with the quality
control specifications or with any Product meeting agreed
standards shall be resolved by an independent laboratory selected
by the parties hereto, or by arbitration.
(c) If any Regulatory Authority or other government
authority in any country in the Territory shall have prevented
the importation of the Product manufactured by BLI or any active
or inactive component of such Product and BLI determines not to
produce such Product in that country or at a place acceptable to
that Regulatory Authority or government authority.
<PAGE> 32
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POLYMER LICENSE ON RELEASE OF BLI
8.24 If any of the circumstances set forth in paragraph 8.23 occur and
continue to exist:
(a) BLI shall promptly grant to Polymer a license to use
the Biovail Technology and the data and information developed
under this Agreement to Manufacture, have Manufactured, and to
Market the Product in question in the Territory to the extent
necessary to enable Polymer to do so without infringing any of
BLI's Patent Rights and/or Know-How. Any such license shall
apply only to the specified Product and country, if applicable,
and to the directly related use of the Biovail Technology to
Manufacture that Product.
(b) To the extent that BLI may legally do so, having regard
to BLI's existing contractual and legal obligations, BLI shall
provide to Polymer the technical data necessary to enable Polymer
to manufacture any such Product. BLI shall deliver to Polymer
any documentation necessary to manufacture the Product, including
practical performance advice, shop practice, specifications as to
materials to be used and control methods, and shall authorize
reference to any relevant Biovail drug master files relating to
the Product.
(c) BLI shall assist Polymer in the preparation of the
systems, equipment and documentation necessary to manufacture the
Product and in the training of Polymer's personnel necessary for
such manufacturing. BLI shall permit Polymer's scientific staff
to visit BLI's manufacturing premises for certain specified
periods, the terms of which shall be mutually agreed to by BLI
and Polymer.
SUPPLY TO LICENSEES OF POLYMER
8.25 The rights and obligations of BLI and Polymer under paragraphs 8.1 to
8.24 shall apply, mutatis mutandis, to any Licensee of Polymer.
<PAGE> 33
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STANDARD PRICING
8.26 Each of Polymer and BLI shall apply a policy in establishing a net
selling price for each of the Products consistent with policies it applies
in the case of similar transactions entered into with third party sources,
or if there are no such sources, then on a basis which is commercially
reasonable.
9. BIOVAIL OPTION
BIOVAIL OPTION
9.1 With respect to any one Product which it so designates, BLI shall have
the right, in its sole discretion, to exercise the Biovail Option, which
is granted to BLI in consideration of the development work undertaken and
to be undertaken hereunder in relation to the Products, all as provided
for herein. BLI shall exercise such right by providing written notice
thereof to Polymer at any time up to sixty (60) days after Regulatory
Approval of that Product in the U.S.A.
PAYMENTS
9.2 In the event that BLI exercises the Biovail Option, BLI shall pay to
Polymer, at the Option of BLI, either:
(a) A one-time cash fee of $25 million, within 30 days of
the date of exercise of the Biovail Option, or
(b) Base royalties equal to 10% of Net Sales of the Product
during the License Period on the same basis as the royalties
payable by BLI under paragraph 7.5.
9.3 In the event that BLI exercises the Biovail Option, BLI shall re-acquire
all rights relating to that Product, including, without limitation, the
exclusive right to Manufacture and Market the Product in the Territory and
in Canada. Any license granted to Polymer in respect of that Product
shall be terminated.
<PAGE> 34
-34-
10. CONFIDENTIALITY; ACCESS TO INFORMATION
OBLIGATIONS OF CONFIDENTIALITY
10.1 During the term of this Agreement and for a period of five years
following its termination, Polymer shall maintain in confidence and shall
not disclose to any other person, except as permitted by this Agreement,
any of the Biovail Technology, and shall use such Biovail Technology only
to perform its continuing obligations under this Agreement or following
its termination, unless or except to the extent that the Biovail
Technology:
(a) was known to or used by Polymer prior to its
development or disclosure under this Agreement or any other
agreement between the parties;
(b) is lawfully disclosed to Polymer by a third party
unaffiliated with Polymer having the right to disclose that
technology; or
(c) either before or after the time of disclosure to
Polymer, such technology becomes known to the public other than
by an unauthorized act or omission of Polymer or of their
respective employees or agents (in which case the provisions
above shall not apply to either party unless it can be
established that such party or its agents disclosed such
information in an act or omission).
EXCEPTIONS
10.2 Nothing contained in paragraph 10.1 shall prevent Polymer, or BLI or BCI
acting on behalf of Polymer, from disclosing any Biovail Technology to the
extent that such Biovail Technology is required to be disclosed:
(a) in connection with the securing of necessary
governmental authorization for the testing or marketing of
Products,
(b) by law for the purpose of complying with governmental
regulations,
<PAGE> 35
-35-
(c) in connection with any license or sublicense permitted
under this Agreement, provided that any person to whom the
Biovail Technology is to be disclosed has executed a
confidentiality agreement in a form acceptable to BLI,
(d) to the extent necessary to give effect to the right of
Polymer to obtain manufacturing of the Product from a Third
Party, provided that any person to whom the Biovail Technology is
to be disclosed has executed a confidentiality agreement in a
form acceptable to BLI,
(e) as may be required by applicable laws, regulations, or
judicial determinations.
SURVIVAL
10.3 The obligations of the parties pursuant to this Section 10 shall survive
the termination of this Agreement for any reason.
11. PATENTS
PATENT PROTECTION
11.1 BLI may apply for any Patent Rights in its own name and at its own
expense, for any discoveries, inventions, improvements and innovations
relating to the Products, whether made in fulfilling the obligations of
BLI under this Agreement or otherwise.
PATENT FILLINGS
11.2 Without limiting the provisions of paragraph 1 1.1 hereof, BLI shall
cause appropriate applications for Patent Rights, and for any inventions
relating to any Products developed hereunder which BLI reasonably believes
to be patentable and technically significant, to be prepared and
prosecuted in the United States of America and in any other countries in
the Territory selected by Biovail in which patent protection appears to be
available and effective, as Polymer and BLI shall reasonably agree from
time to time, and shall cause such Patent Rights to be maintained.
All of the costs
<PAGE> 36
-36-
of preparing, filing, prosecuting and maintaining such
applications and patents, including the Patent Rights, shall be
treated as Development Costs.
INFRINGEMENT
11.3 In the event any party hereto is made aware of any alleged infringement
of any Patent Rights, it shall promptly notify the other party of such
infringement and the parties shall mutually agree upon an appropriate
strategy to pursue the alleged infringer. If one of the parties declines
to join any infringement action, that party nevertheless shall join the
other party if necessary as a plaintiff but shall be held free, clear and
harmless from any and all costs and expenses of any litigation by the
other party, who shall thereafter be solely entitled to retain any sums
recovered in such suit or in settlement thereof.
INFRINGEMENT PROCEDURES
11.4 In the event either party is charged by a third party with infringement
of a patent or patents in relation to the commercialization of a Product,
such party shall promptly notify the other party and the parties together
shall mutually agree upon a defense strategy.
11.5 If the alleged infringement arises from the use or sale of a Product, the
selling party shall hold the other party free, clear and harmless from any
and all costs, expenses and damages arising from such litigation.
11.6 If the alleged infringement arises from the manufacturing process used
for a Product:
(a) if BLI manufactures the product for Polymer hereunder,
BLI shall hold Polymer free, clear and harmless from any and all
costs, expenses (including attorneys' fees and disbursements) and
damages arising from such litigation; and
(b) if Polymer has obtained such manufacturing from any
other Person, Polymer shall hold BLI free, clear and harmless
from any and all costs, expenses (including attorneys' fees and
disbursements) and damages arising from such litigation.
<PAGE> 37
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11.7 If the circumstances in paragraphs 11.5 and 11.6(a) above both apply to
the infringement alleged by a third party, BLI and Polymer shall share
equally all costs, expenses and damages arising from such litigation.
12. TERM AND TERMINATION
12.1 This Agreement shall remain in effect for the life of any relevant
License or other payment or development obligation hereunder, whichever is
longer or until such other time as Polymer and BLI may mutually determine.
Thereafter, it shall continue automatically for additional periods of one
year each upon terms to be mutually agreed upon by the parties hereto,
unless terminated by Polymer or BLI upon 12 months' written notice.
12.2 The parties' respective obligations under Article 2 hereunder will
terminate upon the expenditure by Polymer of all Available Funds, unless
mutually agreed to by the parties hereto.
12.3 Notwithstanding the foregoing provisions of this Article 12, in the event
that the offering contemplated by the Prospectus is not consummated and is
withdrawn, this Agreement shall terminate and be of no further force and
effect.
13. DEFAULT
BREACH INCAPABLE OF REMEDY
13.1 In the event that there is a breath which is incapable of remedy of any
of the terms or provisions hereof by one party, the other party shall have
the right to terminate this Agreement on 30 days' notice by written notice
to the party which shall be in breach. For the purposes of this
Agreement, a breach incapable of remedy shall be present:
(a) when there is a change in the Control of Polymer or
BLI; or
(b) if an order is made or an effective resolution is
passed for the winding-up of BLI or Polymer other than for the
purposes of an amalgamation or reconstruction the terms of which
have been agreed by the parties; or
<PAGE> 38
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(c) if BLI or Polymer shall make any general adjustment or
rescheduling of any indebtedness or obligation for repayment of
borrowed monies or any general assignment for the benefit of
creditors; or
(d) If BLI or Polymer enters into any arrangement or
composition with its creditors; or
(e) if any encumbrancer takes possession of or a receiver
is appointed over any of the assets of BLI or Polymer.
13.2 In case of a breach incapable of remedy on the part of BLI described in
any of subparagraphs 13.1(b) through (e) above and where Polymer serves a
notice of termination upon BLI, Polymer shall be granted an exclusive
license under BLI's applicable Know-how (consistent with the terms of this
Agreement and containing such other terms as may be reasonably agreed to
by BLI and Polymer) to Market such Products in the U.S., and in the case
of any Product for which BLI has Manufacturing rights, a license to
Manufacture. Such license will continue as a non-exclusive, royalty-free
license upon termination of the applicable exclusive Period for each
Product.
13.3 In the event of any breach not described in any of sub-paragraphs 13.1
(b) through (e) above, which breach has not been remedied after a period
of 60 days after written notice thereof by BLI to Polymer or Polymer to
BLI, as applicable, the party not in breach shall have the right to
terminate those portions of this Agreement directly affected by or
corresponding to the breach upon written notice to the breaching party,
without affecting the remaining rights and obligations of the parties
under this Agreement.
RIGHTS
13.4 Except as set forth in paragraph 13.1 above, upon termination of this
Agreement, as a result of the default or breach by either party:
(a) The party not in default or breach shall have no
further obligations or liabilities of any kind whatsoever to the
other party other than those ex
<PAGE> 39
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pressly stated to survive any termination hereunder;
(b) Any sums that were due from the party in default or
breach to the party not in default or breach prior to the
exercise of the right to terminate this Agreement as set forth
herein shall be paid in full without any right of offset within
60 days of termination of this Agreement; and
(c) All confidentially provisions set out herein shall
remain in full force and effect.
14. MISCELLANEOUS
FORCE MAJEURE
14.1 Neither party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay results from
causes beyond its reasonable control, including, without limitation, acts
of God, fires, strikes, acts of war, or intervention of any Government
Authority, but any such delay or failure shall be remedied by such party
as soon as practicable.
RELATIONSHIP OF THE PARTIES
14.2 Nothing contained in this Agreement is intended or is to be construed to
constitute BLI and Polymer as partners or joint venturers or employees of
the other party. Neither party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf of or in
the name of the other party or to bind the other party to any contract,
agreement or undertaking with any third party.
COUNTERPARTS
14.3 This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which
when taken together shall constitute this Agreement.
<PAGE> 40
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NOTICES
14.4 Any notice or other communication required or permitted to be given to
either party under this Agreement shall be given in writing and shall be
delivered by hand or by registered mail, postage prepaid and return
receipt requested, or by reputable overnight delivery service or courier,
addressed to each party at the following addresses or such other address
as may be designated by notice pursuant to this paragraph 14.4:
If to Polymer:
Intelligent Polymer Limited
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
If to BLI:
Biovail Laboratories Incorporated
Chelston Park
Building 2, Collymore Rock
St. Michael BH1
Barbados, West Indies
If to BCI:
Biovail Corporation International
2438 Dunwin Drive
Mississauga, Ontario,
Canada L5L 1J9
14.5 Any notice or communication given in conformity with this Section 14
shall be deemed to be effective when received by the addressee, if
delivered by hand or delivery service or courier, and four days after
mailing, if mailed.
GOVERNING LAW
14.6 This Agreement shall be governed by and construed in accordance with the
laws of Bermuda.
<PAGE> 41
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SEVERABILITY
14.7 If any provision in this Agreement is deemed to be or becomes invalid,
illegal or unenforceable, (i) such provision will be deemed amended to
conform to applicable laws so as to be valid and enforceable or, if it
cannot be so amended without materially altering the intention of the
parties, it will be deleted, and (ii) the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be
impaired or affected in any way.
AMENDMENTS
14.8 No amendment, modification or addition hereto shall be effective or
binding on either party unless set forth in writing and executed by a duly
authorized representative of both parties.
WAIVER
14.9 No waiver of any right under this Agreement shall be deemed effective
unless contained in a writing signed by the party charged with such
waiver, and no waiver of any breach or failure to perform shall be deemed
to be a waiver of any future breach or failure to perform or of any other
right arising under this Agreement.
HEADINGS
14.10 The section headings contained in this Agreement are included for
convenience only and form no part of the agreement between the parties.
ASSIGNMENT, ETC.
14.11 Neither party may assign its rights and obligations hereunder without
the prior written consent of the other party; provided, however, that BLI
shall have the right to assign such rights and obligations hereunder to
any person or entity with which BLI is merged or consolidated or which
purchases all or substantially all of the assets of BLI.
<PAGE> 42
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14.12 BLI shall have the right to subcontract all or any portion of its duties
hereunder to third parties, subject to the prior written approval of
Polymer, which shall not be unreasonably withheld or delayed; provided,
however, that in any such event BLI shall continue to be bound by the
terms of this Agreement.
NO EFFECT ON OTHER AGREEMENTS
14.13 No provision of this Agreement shall be construed so as to negate,
modify or affect in any way the provisions of any other agreement between
the parties unless specifically referred to, and solely to the extent
provided, in any such other agreement.
SUCCESSORS
14.14 This Agreement will enure to the benefit of and be binding upon the
successors of the parties hereto.
<PAGE> 43
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.
INTELLIGENT POLYMERS LIMITED
By: _______________________
Name: Eugene Melnyk
Title: Chairman & CEO
BIOVAIL CORPORATION INTERNATIONAL
By:_________________________
Name: Bruce Brydon
Title: President & CEO
BIOVAIL LABORATORIES INCORPORATED
By:_________________________
Name: Eugene Melnykk
Title: President & CEO
<PAGE> 44
SCHEDULE 1.37 - PRODUCTS
<TABLE>
<S> <C> <C>
CORRESPONDING
NDA PRODUCTS INDICATIONS INNOVATORS' BRANDS
- -------------------- ------------------- ------------------
Buspirone CR Anxiety, Depression Buspar
Bupropion CR Depression Wellbutrin
Lovastatin/Niacin CR Hyperlipidemia Mevacor
Tramadol CR Chronic and Severe Ultram
Acute Pain
Metformin CR Diabetes Glucophage
ANDA PRODUCTS
- -------------
Nifedipine XL Hypertension and Procardia XL
Angina Pectoris
</TABLE>
<PAGE> 1
Exhibit 10.2
SERVICES AGREEMENT
This Agreement is made effective the 1st day of September, 1997 between:
INTELLIGENT POLYMERS LIMITED.,
a company incorporated under the laws of Bermuda whose head
office is
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
(hereinafter referred to as Polymer)
- and -
BIOVAIL CORPORATION INTERNATIONAL
a company incorporated under the laws of Canada having its
principal place of business at
2488 Dunwin Drive, Mississauga, Ontario
Canada L5L 1J9
(hereinafter referred to as "BCI")
- and -
BIOVAIL LABORATORIES INCORPORATED
a Barbados corporation incorporated under the
International Business Companies Act, 1991-24,
whose head office is Chelston Park
Building 2, Collymore Rock
St. Michael BHI
Barbados, West Indies
(hereinafter referred to as BLI)
WHEREAS:
BCI is a company engaged in research and development
into various drug delivery systems and in the commercialization
of pharmaceutical and drug delivery products; and
BLI is knowledgeable in the development, registration
and licensing of pharmaceutical products; and
<PAGE> 2
-2-
Polymer is a company established for the purpose of developing and
commercializing Products in order to facilitate its entry into the
pharmaceutical market;
BLI has acquired experience and expertise in the management and
administration of pharmaceutical companies, and the personnel required perform
those services;
BLI, BCI and Polymer are concurrently with this Agreement entering into a
Product Development and License Agreement (the "License Agreement");
Polymer has requested that BLI provide certain management and
administrative services to Polymer,
BLI is willing to provide such services on the terms set forth herein, and
BCI has agreed to assist in the provision of such services and to cause BCI to
perform its obligations under this Agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:
DEFINITIONS
1.1 Any capitalized terms not expressly defined herein shall
have the meaning assigned to such terms in the License
Agreement, or in the Prospectus.
SERVICES
1.2 BLI shall supply to Polymer such management and
administrative services as Polymer may from time to time request
and as BLI and Polymer may mutually agree upon.
1.3 Such services will be provided at reasonable times and
upon reasonable notice, in accordance with the requests and
requirements of Polymer and the ability of BLI to provide those
services.
<PAGE> 3
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COMPENSATION.
1.4 Polymer shall pay to BLI a fee of $100,000 (US) per
calendar quarterly, in arrears. BLI shall provide to Polymer an
invoice for such amount. Polymer shall pay the invoiced amount
within 30 days of its receipt of the invoice from BLI for the
services provided.
REIMBURSEMENT.
1.5 Upon the consummation of the Unit Offering, Polymer shall
reimburse BLI for all out-of-pocket expenses incurred by BLI in
connection with the services provided hereunder; including those
out-of-pocket expenses incurred pursuant to the Unit Offering,
in accordance with the provisions of the License Agreement.
TERM AND TERMINATION:
1.6 This Agreement shall terminate one year after the
termination of the Purchase Option (as defined in the Prospectus
relating to the Unit offering).
1.7 Polymer may, in its discretion, terminate this Agreement
at any time upon at least 90 days' written notice, delivered
prior to the start of any calendar quarter for a termination at
the end of that calendar quarter.
1.8 Either party may, in its discretion, terminate this
Agreement in the event that the other party (a) breaches any
material obligation under this Agreement, or under the License
Agreement, or under any license granted to BLI or Polymer under
the License Agreement, which breach continues for a period of 60
days after written notice thereof, or (b) enters into
liquidation or any proceeding, whether voluntary or involuntary,
in bankruptcy or reorganization or any arrangement for the
appointment of a receiver or trustee to take possession of such
party's assets or any other proceeding under any law for the
relief of creditors, or makes an assignment for the benefit of
its creditors.
<PAGE> 4
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1.9 Notwithstanding the foregoing, in the event that the
offering of units contemplated by the Prospectus is not
consummated and is withdrawn, this Agreement shall terminate and
be of no further force and effect.
INDEMNIFICATION OF BIOVAIL.
1.10 Polymer hereby agrees to indemnify, protect and hold BLI
and BCI harmless from any and all liabilities, costs or expenses
incurred by either BLI or BCI as a result of services rendered
by either BLI or BCI under this Agreement, including lawsuits of
and claims by third parties, except for liabilities, costs or
expenses resulting from BLI's or BCI's own negligence or willful
fault.
FORCE MAJEURE.
1.11 Neither BLI nor BCI shall be liable for delay in
performance of any of its obligations hereunder if such delay is
due to causes beyond its reasonable control including, without
limitation, acts of God, fires, strikes, acts of war, or
intervention of any government or authority; provided, however,
that any such delay or failure shall be remedied by Biovail as
soon as reasonably possible.
RELATIONSHIP OF THE PARTIES.
1.12 Nothing contained in this Agreement is intended or is to
be construed to constitute BLI, BCI and Polymer as partners or
joint venturers or BLI or BCI as employees or agents of Polymer.
Neither party hereto shall have any express or implied right or
authority to assume or create any obligations on behalf of or in
the name of the other party or to bind the other party to any
contract, agreement or undertaking with any third party.
COUNTERPARTS.
1.13 This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall
constitute this Agreement.
<PAGE> 5
-5-
NOTICES.
1.14 Any notice or other communication required or permitted
to be given to any party under this Agreement shall be given in
writing and shall be delivered by hand or by registered mail,
postage prepaid and return receipt requested, or by reputable
overnight delivery service or courier, addressed to each party
at the following addresses or such other address as may be
designated by notice pursuant to this Section 9.
If to Polymer:
Intelligent Polymer Limited
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
If to BLI:
Biovail Laboratories Incorporated
ChelstonPark
Building 2, Collymore Rock
St. Michael BH1
Barbados, West Indies
If to BCI:
Biovail Corporation International
2488 Dunwin Drive
Mississauga, Ontario,
Canada L5L 1J9
Any notice or communication given in conformity with this paragraph shall be
deemed to be effective when received by the addressee, if delivered by hand or
delivery service or courier, and four days after mailing, if mailed.
GOVERNING LAW.
1.15 This Agreement shall be governed by and construed in
accordance with the laws of Bermuda.
SEVERABILITY.
<PAGE> 6
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1.16 If any provision in this Agreement is deemed to be or
becomes invalid, illegal or unenforceable in any jurisdiction,
(i) such provision will be deemed amended in such jurisdiction
to conform to applicable laws of such jurisdiction so as to be
valid and enforceable or, if it cannot be so amended without
materially altering the intention of the parties, it will be
deleted, (ii) the validity, legality and enforceability of such
provision will not in any way be affected or impaired thereby in
any other jurisdiction and (iii) the remaining provisions of
this Agreement shall continue in full force without being
impaired or invalidated in any way.
AMENDMENTS.
1.17 No amendment, modification or addition hereto shall be
effective or binding on either party unless set forth in writing
and executed by a duly authorized representative of both
parties.
WAIVER.
1.18 No waiver of any right under this Agreement shall be
deemed effective unless contained in writing signed by the party
charged with such waiver, and no waiver of any breach or failure
to perform shall be deemed to be a waiver of any future breach
or failure to perform or of any other right arising under this
Agreement.
HEADING.
1.19 The section headings contained in this Agreement are
included for convenience only and form no part of the agreement
between the parties.
ASSIGNMENT.
1.20 No party may assign its rights and obligations hereunder
without the prior written consent of the other party, which
consent may not be unreasonably withheld; provided, however,
that BLI or BCI may assign such rights and obligations hereunder
to any person or entity with which Biovail is merged or
consolidated or which purchases all or substantially all of the
assets of BLI or BCI.
<PAGE> 7
-7-
Either BLI or BCI may subcontract all or any portion of its
respective duties hereunder to third parties, in its sole
discretion; provided however, that any such subcontractor shall
be bound by the terms of this Agreement.
NO EFFECT ON OTHER AGREEMENTS.
1.21 No provision of this Agreement shall be construed so as
to negate, modify or affect in any way the provisions of any
other agreement between the parties unless specifically referred
to, and solely to the extent provided, in any such other
agreement.
<PAGE> 8
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
INTELLIGENT POLYMERS LIMITED
By:
_______________________________
Name: Eugene Melnyk
Title: Chairman & CEO
BIOVAIL CORPORATION INTERNATIONAL
By:
_______________________________
Name: Bruce Brydon
Title: President & CEO
BIOVAIL LABORATORIES INCORPORATED
By:
_______________________________
Name: Eugene Melynk
Title: President & CEO
<PAGE> 1
Exhibit 21.1
SUBSIDIARIES OF BIOVAIL
CORPORATION INTERNATIONAL
<TABLE>
<CAPTION>
Company Subsidiary of Incorporation
- ------- ---------------------------
<S> <C>
Crystaal Corporation Canada
Biovail SA Switzerland
Biosytes NV Dutch Antilles
Trimel Holding Corporation Barbados
Biovail Laboratories Inc. Barbados
Biovail UK United Kingdom
Biovail Americas Corp Delaware
</TABLE>
<PAGE> 1
EXHIBIT 23.5
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement of Biovail Corporation International on Form F-3 of our
report dated February 21, 1997, appearing in the Annual Report on Form 20-F of
Biovail Corporation International for the year ended December 31, 1996 and to
the use in Amendment No. 1 to the Registration Statement of Intelligent Polymers
Limited on Form F-1 of our report dated September 9, 1997 appearing in the
Prospectus, which is part of this Registration Statement. We also consent to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ DELOITTE & TOUCHE
DELOITTE & TOUCHE
Toronto, Canada
October 6, 1997
