As filed with the Securities and Exchange Commission on July 22, 1996
Registration No.333-08179
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ICN PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 33-0628076
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
3300 Hyland Avenue
Costa Mesa, California 92626
(714) 545-0100
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Copies To:
David C. Watt
Executive Vice President, General Counsel and Corporate Secretary
ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, California 92626
(714) 545-0100
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Approximate date of commencement of proposed sale to the public:
From time to time after this 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, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [X]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462 (b) 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 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. [ ]
<TABLE>
Calculation of Registration Fee
<CAPTION>
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Title of Each
Class of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered (1) Registered (1) Share (2) Price (2) Registration Fee (2)
- ------------------ ------------------ ------------------ ------------------ ---------------------
<S> <C> <C> <C> <C>
Common Stock, 233,274(2) $23.06(3) $5,379,298.44(3) $1,854.93(3)
$.01 par value
964,833(4) $23.19(5) $22,374,477.27(5) $7,715.34(5)
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<FN>
(1) Also includes associated Preferred Stock Purchase Rights.
(2) These shares (the "Initial Shares") were included in the initial
filing of this Registration Statement on July 16, 1996.
(3) The offering price per share for the Initial Shares was estimated
pursuant to Rule 457(c)solely for the purpose of calculating the
registration fee and was based upon the average of the high and low
price of shares of Common Stock as reported on the New York Stock
Exchange on July 9, 1996 (which date was within five business
days prior to the date of the initial filing of this Registration
Statement). Registration fee for the amount of $1,854.93 was paid
on July 16, 1996.
(4) These shares (the "Additional Shares") are additional shares being
included in Amendment No. 1 to this Registration Statement.
(5) The offering price per share for the Additional Shares is estimated
pursuant to Rule 457(c) solely for the purpose of calculating the
registration fee and is based upon the average of the high and low
price of shares of Common Stock as reported on the New York Stock
Exchange on July 16, 1996 (which date is within five business days
prior to the date of the filing of Amendment No. 1 to this
Registration Statement).
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT 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 SECURITIES AND
EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
REDHERRING
Information contained herein is subject to completion or
amendment. A Registration Statement relating to these securities
has been filed with the Securities and Exchange Commission.
These Securities may not be sold nor may offers to buy be
accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
Subject to Completion, Dated July 22 ,1996
PROSPECTUS
ICN PHARMACEUTICALS, INC.
1,198,107 SHARES OF COMMON STOCK
This Prospectus relates to 1,198,107 shares (the "Shares") of
Common Stock, $ .01 par value, including associated Preferred
Stock Purchase Rights (the "Common Stock), of ICN Pharmaceuticals,
Inc., a Delaware corporation (the "Company" or "ICN"), that may
from time to time be sold by the Stockholders identified herein
(the "Selling Stockholders"). The Company will not receive any
of the proceeds from the sale of the Shares. However, under
certain, circumstances certain of the Selling Stockholders will be required
to pay to the Company the amount, if any, by which the proceeds
from the sale of their Shares exceeds certain agreed upon price
thresholds. Conversely, under certain circumstances, the Company
will be required to pay each Selling Stockholder the amount, if
any, by which the proceeds from the sale of such Selling
Stockholders Shares is less than certain agreed upon price
thresholds. The Company has agreed to bear all expenses (other
than selling commissions and fees and expenses of counsel and
other advisors to the Selling Stockholders) in connection with the
registration and sale of the Shares being offered by the Selling
Stockholders. See "Selling Stockholders" and "Plan of
Distribution."
The Shares may be sold from time to time by the Selling
Stockholders or, in certain cases, by transferees or assignees.
Such sales may be made in the over - the - counter market, on the
New York Stock Exchange or other exchanges (if the Common Stock is
listed for trading thereon), or otherwise at prices and at terms
then prevailing, at prices related to the then current market
price or at negotiated prices. The Shares may be sold by any one
or more of the following methods: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the securities as
agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its
account; (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers; and (d) privately negotiated
transactions. In addition, any Shares that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Shares covered by this Prospectus were originally issued
in private placements made by the Company under Rule 4(2) of the
Securities Act of 1933, as amended (the "Securities Act"), in
connection with the acquisitions by the Company of (i) 40% of the
outstanding common stock of SeaLite Sciences, Inc. ("SeaLite"),
the owner of patented diagnostic technology which can be used to
produce extremely sensitive test kits, in December 1995, (ii)
all the outstanding common stock of Gly-Derm, Inc. ("Gly-Derm"), a
Michigan based skin care company, in February 1996 and (iii) the
Dosimetry Service Division ("Dosimetry") of Siemens Medical
Systems, Inc. ("Siemens Medical"), in July 1996. The acquisition of
Gly-Derm and Dosimetry, together with the consummated and proposed
acquisitions discussed under "Recent Developments," do not,
individually or in the aggregate, constitute the acquisition of
significant businesses as defined by Regulation S-X promulgated
by the Securities and Exchange Commission (the "Commission").
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in the
distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act and any commissions
received by such broker-dealers, agents or underwriters and any
profit on the resale of the Shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities
Act.
The Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "ICN." On July 19, 1996, the closing
sale price per share, as reported by the NYSE, was $24.75.
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of this Prospectus is July __, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Commission. Such
reports, proxy statements and other information filed by the
Company may be inspected and copies obtained (at prescribed
rates) at the public reference facilities maintained by the
Commission in Washington, D.C. at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the Commission's
Regional Offices in New York, at 7 World Trade Center 13th Floor,
New York, New York 10048 and in Chicago, at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material can be obtained (at prescribed rates), by
writing to the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549. Such material can
also be inspected at the NYSE, 20 Broad Street, New York, New
York 10005, on which the Common Stock is listed.
This Prospectus is part of a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") filed by the Company with the
Commission under the Securities Act with respect to the Shares.
This Prospectus does not contain all the information set forth or
incorporated by reference in the Registration Statement and the
exhibits and schedules relating thereto, certain portions of
which have been omitted as permitted by the Commission's rules
and regulations. For further information with respect to the
Company and the Shares offered hereby, reference is made to the
Registration Statement and the exhibits thereto which are on file
at the offices of the Commission and may be obtained upon payment
of the fee prescribed by the Commission as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following reports and documents filed by the Company
with the Commission pursuant to the Exchange Act are incorporated
into this Prospectus by reference as of their respective dates:
1. Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 as amended by Form 10-K/A-
1, dated April 29, 1996.
2. Quarterly Report on Form 10-Q for the three months
ended March 31, 1996.
3. The description of the Common Stock and associated
Preferred Stock Purchase Rights contained in the
Registration Statement on Form 8-A, dated November
10, 1994.
All reports and other documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the
termination of the offering of the Shares pursuant to this
Prospectus (this "Offering") shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the
date of filing of such reports and documents. Any statement
contained herein or in a report or document incorporated or
deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently
filed report or document that is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Prospectus.
The making of a modifying or superseding statement shall not
be deemed an admission for any purpose that the modified or
superseded statement, when made, constituted a misrepresentation,
an
untrue statement of a material fact or an omission to state
a material fact that is required to be stated or that is
necessary to make a statement not misleading in light of the
circumstances in which it was made.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, ON THE REQUEST OF
SUCH PERSON, A COPY OF ANY OR ALL OF THE REPORTS AND DOCUMENTS
INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS THERETO,
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH REPORTS OR DOCUMENTS). WRITTEN REQUESTS FOR SUCH
COPIES SHOULD BE DIRECTED TO DAVID C. WATT, EXECUTIVE VICE
PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY, ICN
PHARMACEUTICALS, INC., 3300 HYLAND AVENUE, COSTA MESA, CALIFORNIA
92626. TELEPHONE INQUIRIES MAY BE DIRECTED TO DAVID C. WATT AT
(714) 545-0100.
THE COMPANY
On November 1, 1994, the stockholders of ICN
Pharmaceuticals, Inc. ("Old ICN"), SPI Pharmaceuticals, Inc.
("SPI"), Viratek, Inc. ("Viratek"), and ICN Biomedicals, Inc.
("Biomedicals") (collectively, the "Predecessor Companies")
approved the combination of the Predecessor Companies ("the
Merger"). On November 10, 1994, SPI, Old ICN and Viratek merged
into ICN Merger Corp., and Biomedicals merged into ICN Subsidiary
Corp., a wholly-owned subsidiary of ICN Merger Corp. In
conjunction with the Merger, ICN Merger Corp. was renamed ICN
Pharmaceuticals, Inc. For accounting purposes, SPI is the
acquiring company and as a result, the Company reports the
historical financial data of SPI in its financial results.
Subsequent to the Merger, the results of the Company include the
combined operations of all Predecessor Companies.
ICN is a multinational research-based pharmaceutical company
that develops, manufactures, distributes and sells
pharmaceutical, nutrition, research and diagnostic products. The
Company pursues a strategy of international expansion which
includes (i) research and development of proprietary products
with the potential to be significant contributors to the
Company's global operations; (ii) penetration of major
pharmaceutical markets by means of targeted acquisitions; and
(iii) expansion in these major markets through the development or
acquisition of pharmaceutical products that meet the particular
needs of each market.
The Company distributes and sells a broad range of
prescription and over-the-counter pharmaceutical and nutritional
products in over 60 countries worldwide, primarily in North
America, Latin America, Western Europe and Eastern Europe. These
pharmaceutical products treat viral and bacterial infections,
diseases of the skin, myasthenia gravis, cancer, cardiovascular
disease, diabetes and psychiatric disorders. The Company's
leading product is the broad spectrum antiviral agent ribavirin,
which is marketed in the United States, Canada and most of Europe
under the trade name Virazole(registered trademark).
Virazole(registered trademark) is currently approved for
commercial sale in over 40 countries for one or more of a variety
of viral infections, including respiratory syncytial virus
("RSV"), herpes simplex, influenza, chicken pox, hepatitis and
HIV. In the United States, Virazole(registered trademark) is
approved only for use in hospitalized infants and young children
with severe lower respiratory infections due to RSV.
The Company believes it has substantial opportunities to
realize growth from its internally developed compounds. These
compounds are the result of significant investments in its
research and development activities related to nucleic acids
conducted over three decades. The Company believes that the
approval of Virazole(registered trademark) for the treatment of
chronic hepatitis C would be important to the Company because of
the potential size of the chronic hepatitis C market both in the
United States and abroad. On June 1, 1994, a New Drug
Application ("NDA") was filed with the United States Food and
Drug Administration (the "FDA") for the use of
Virazole(registered trademark) for the treatment of chronic
hepatitis C in the United States. Similar applications for
approval to market Virazole(registered trademark) for chronic
hepatitis C were filed in the European Union, Canada, Sweden,
Norway, Finland, Australia and New Zealand. Following the
submission of the NDA, the FDA raised serious questions regarding
the safety and efficacy of Virazole(registered trademark).
Similar questions were raised by foreign reviewers.
Subsequently, the Company withdrew its NDA for
Virazole(registered trademark) and the applications for
Virazole(registered trademark) submitted in other world markets.
On July 28, 1995, the Company entered into an agreement
(described below) with a subsidiary of Schering-Plough
Corporation (collectively with such subsidiary, "Schering") to
license ribavirin (Virazole(registered trademark)) as a treatment
for chronic hepatitis C in combination with Schering's alpha
interferon (the "Combination Therapy"). The FDA subsequently
approved a protocol for the testing of the Combination Therapy,
and Schering is currently conducting Phase III clinical trials of
the Combination Therapy. To obtain FDA approval of
Virazole(registered trademark) for use in Combination Therapy,
the Company and Schering must demonstrate that Combination
Therapy is safer and more effective in treating chronic hepatitis
C than alpha interferon alone. Schering is also testing the
Combination Therapy pursuant to protocols approved by the
European Union. The Company continues to believe that
Virazole(registered trademark) has potential in the treatment of
hepatitis C in Combination Therapy and is taking all steps
necessary to capitalize on its full potential.
Pursuant to an Exclusive License and Supply Agreement (the
"License Agreement") with Schering, the Company licensed
ribavirin to Schering for use in Combination Therapy. The
License Agreement provided the Company an initial non-refundable
payment by Schering of $23,000,000, and future royalty payments
to the Company for marketing of ribavirin, including certain
minimum royalty rates. Schering will have exclusive marketing
rights for ribavirin for hepatitis C worldwide, except that the
Company will retain the right to co-market the drug in the
countries of the European Union. In addition, Schering will
purchase up to $42,000,000 in Common Stock upon the achievement
of certain regulatory milestones. Under the License Agreement,
Schering will be responsible for all clinical developments
worldwide.
The Company believes it is positioned to expand its presence
in the pharmaceutical markets in Eastern Europe. In 1991, a 75%
interest was acquired in Galenika Pharmaceuticals, a large drug
manufacturer and distributor in Yugoslavia. Galenika
Pharmaceuticals was subsequently renamed ICN Galenika
("Galenika"). This acquisition added new products and
significantly expanded the sales volume of the Company. With the
investment in Galenika Pharmaceuticals, the Company became one of
the first Western pharmaceutical companies to establish a direct
investment in Eastern Europe. Galenika continues to be a
significant part of the Company's operations although its sales
and profitability have, at times, been substantially diminished
owing principally to the imposition of sanctions on Yugoslavia by
the United Nations. However, in December 1995, the United
Nations Security Council adopted a resolution that suspended
economic sanctions imposed on the Federal Republic of Yugoslavia
since May of 1992. The suspension of economic sanctions has
enabled Galenika to resume exporting certain of its product lines
to Russia, other Eastern Europe Markets, Africa, the Middle East
and the Far East. Additionally, during 1995, in pursuing its
Eastern Europe expansion strategy, the Company acquired a 75%
interest in Oktyabr, a pharmaceutical company in the Russian
Republic. The Company subsequently acquired an additional 15%
interest in Oktyabr, increasing its interest in Oktyabr to 90%.
In addition to its pharmaceutical operations, the Company
also develops, manufacturers and sells a broad range of research
chemical products, diagnostic reagents and radiation monitoring
services. The Company markets these products internationally to
major scientific, academic, health care and governmental
institutions through catalog and direct mail marketing programs.
The principal executive offices of the Company are located
at 3300 Hyland Avenue, Costa Mesa, California 92626. The
telephone number at such address is (714) 545-0100.
RISK FACTORS
AN INVESTMENT IN THE SHARES INVOLVES A HIGH DEGREE OF RISK
AND MAY NOT BE APPROPRIATE FOR INVESTORS WHO CANNOT AFFORD TO
LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE PURCHASERS OF THE
SHARES SHOULD BE FULLY AWARE OF THE RISK FACTORS SET FORTH
HEREIN. THIS PROSPECTUS CONTAINS OR INCORPORATES STATEMENTS THAT
CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THOSE
STATEMENTS APPEAR IN A NUMBER OF PLACES IN THIS PROSPECTUS AND IN
THE DOCUMENTS INCORPORATED BY REFERENCE AND MAY INCLUDE
STATEMENTS REGARDING, AMONG OTHER MATTERS, THE COMPANY'S GROWTH
OPPORTUNITIES, THE COMPANY'S ACQUISITION STRATEGY, REGULATORY
MATTERS PERTAINING TO GOVERNMENTAL APPROVAL OF THE MARKETING OR
MANUFACTURING OF CERTAIN OF THE COMPANY'S PRODUCTS AND OTHER
FACTORS AFFECTING THE COMPANY'S FINANCIAL CONDITION OR RESULTS OF
OPERATIONS. PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH
FORWARD LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE
PERFORMANCE AND INVOLVE RISKS, UNCERTAINTIES AND OTHER FACTORS
WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO
DIFFER MATERIALLY FROM THE FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED IN SUCH FORWARD LOOKING KNOWN
AND UNKNOWN STATEMENTS. SUCH FACTORS INCLUDE THE VARIOUS RISK
FACTORS DESCRIBED BELOW.
DEPENDENCE ON FOREIGN OPERATIONS
Approximately 75% and 75% of the Company's net sales for
1995 and the three months ended March 31, 1996, respectively,
were generated from operations outside the United States. The
Company operates directly and through distributors in North
America, Latin America (principally Mexico), Western Europe and
Eastern Europe and through distributors elsewhere in the world.
Foreign operations are subject to certain risks inherent in
conducting business abroad, including possible nationalization or
expropriation, price and exchange controls, limitations on
foreign participation in local enterprises, health-care
regulation and other restrictive governmental actions. Changes
in the relative values of currencies take place from time to time
and may materially affect the Company's results of operations.
Their effects on the Company's future operations are not
predictable.
RISK OF OPERATIONS IN YUGOSLAVIA
Galenika represents a material part of the Company's
business. Approximately 46% and 45% of the Company's net sales
for 1995 and the three months ended March 31, 1996, respectively,
were from Galenika. In addition, approximately 49% and 36% of
the Company's operating income for 1995 and the three months
ended March 31, 1996, respectively, were from Galenika. The
current political and economic circumstances in Yugoslavia create
certain business risks particular to that country. Between May
1992 and December 1995, Yugoslavia had been operating under
sanctions imposed by the United Nations which had severely
limited the ability to import raw materials for manufacturing and
had prohibited all exports. While the sanctions were suspended
in December 1995, certain risks such as hyperinflation, currency
devaluations, wage and price controls and potential government
action could continue to have a material adverse effect on the
Company's results of operations.
Galenika is subject to price controls in Yugoslavia. The
size and frequency of government-approved price increases are
influenced by local inflation, devaluations, cost of imported raw
materials and demand for Galenika products. During 1995,
Galenika received fewer price increases than in the past due to
lower relative levels of inflation. As inflation increases, the
size and frequency of price increases are expected to increase.
Price increases obtained by Galenika are based on economic events
preceding such an increase and not on expectations of ongoing
inflation. A lag in approved price increases could reduce the
gross margins that Galenika receives on its products. Although
the Company expects that Galenika will limit sales of products
that have poor margins until an acceptable price increase is
received, the impact of an inability to obtain adequate price
increases in the future could have an adverse impact on the
Company as a result of declining gross profit margins or
declining sales in an effort to maintain existing gross margin
levels.
RISK OF OPERATIONS IN EASTERN EUROPE AND RUSSIA
The Company has an investment in Russia through its 90%
interest in the Russian pharmaceutical company Oktyabr. The
Company has purchased a 40% investment in a U.S. Company which
formed a joint venture with a joint stock company in Kazakhstan
to convert a former Soviet scientific production complex in
Kazakhstan into a pharmaceutical manufacturing and distribution
plant and also acquired approximately 88% interest in Lekstredstva, a
Russian pharmaceutical company. In addition, the Company
recently won a competitive bid to purchase up to a 59% interest
in Alkaloida Chemical Co., a Hungarian state-owned pharmaceutical
company. The Company is also considering several other strategic
acquisitions and investments in Eastern Europe. Although the
Company believes that investment in Russia and Eastern Europe
offers access to growing world markets, the economic and
political conditions in such countries are unstable. See "Recent
Developments."
NO ASSURANCE OF SUCCESSFUL DEVELOPMENT AND COMMERCIALIZATION
OF FUTURE PRODUCTS
The Company's future growth will depend, in large part, upon
its ability to develop or obtain and commercialize new products
and new formulations of or indications for current products. The
Company is engaged in an active research and development program
involving compounds owned by the Company or licensed from others
which the Company may, in the future, desire to develop
commercially. There can be no assurance that the Company will be
able to develop or acquire new products, obtain regulatory
approvals to use such products for proposed or new clinical
indications in a timely manner, manufacture its potential
products in commercial volumes or gain market acceptance for such
products. In addition, the Company may require financing over
the next several years to fund costs of development and
acquisitions of new products and, if Virazole(registered
trademark) is approved for treatment of chronic hepatitis C in
Combination Therapy (for which there can be no assurance), to
expand the production and marketing of Virazole(registered
trademark) in the countries of the European Union where the
Company has retained marketing rights under the License
Agreement. It may be desirable that the Company enter into
licensing arrangements with other pharmaceutical companies in
order to market effectively any new products or new indications
for existing products such as the License Agreement with Schering
for the marketing of Virazole(registered trademark) for
Combination Therapy (if approved). There can be no assurance
that the Company will be successful in raising such additional
capital or entering into such marketing arrangements, if
required, or that such capital will be, raised, or such marketing
arrangements will be, on terms favorable to the Company.
LIMITED PATENT PROTECTION
The Company may be dependent on the protection afforded by
its patents relating to Virazole(registered trademark) and no
assurance can be given as to the breadth or degree of protection
which these patents will afford the Company. The Company has
patent rights in the United States expiring in 1999 relating to
the use of Virazole(registered trademark) to treat specified
human viral diseases. If future development of
Virazole(registered trademark) in Combination Therapy is
successful and approval is granted in the United States, an
additional award of exclusivity will be granted of up to three
years from date of approval (Waxman-Hatch Act); however, there
can be no assurance that such development will be successful or
that such approval will be obtained. While the Company has
patents in certain foreign countries covering use of
Virazole(registered trademark) in the treatment of certain
diseases, which coverage and expiration varies and which patents
expire at various times through 2006, the Company has no, or
limited, patent rights with respect to Virazole(registered
trademark) and/or its use in certain foreign countries where
Virazole(registered trademark) is currently, or in the future may
be, approved for commercial sale, including France, Germany and
Great Britain. However, the Company and Schering intend to file
applications for approval of Combination Therapy through a
centralized procedure in the European Union (which includes
France, Germany and Great Britain). If such approval is granted,
the Company and Shering would be afforded either six or ten years
(depending upon the particular country) of protection for the
Combination Therapy against competition . There can be no
assurance that the loss of the Company's patent rights with
respect to Virazole(registered trademark) upon expiration of the
Company's patent rights in the United States, Europe and
elsewhere will not result in competition from other drug
manufacturers or will not otherwise have a significant adverse
effect upon the business and operations of the Company.
As a general policy, the Company expects to seek patents,
where available, on inventions concerning novel drugs,
techniques, processes or other products which it may develop or
acquire in the future. However, there can be no assurance that
any patents applied for will be granted, or that, if granted,
they will have commercial value or as to the breadth or the
degree of protection which these patents, if issued, will afford
the Company. The Company intends to rely substantially on its
unpatented proprietary know-how, but there can be no assurance
that others will not develop substantially equivalent proprietary
information or otherwise obtain access to the Company's know-how.
Patents for pharmaceutical compounds are not available in certain
countries in which the Company markets its products.
Marketing approvals in certain foreign countries provide an
additional level of protection for products approved for sale in
such countries.
UNCERTAIN IMPACT OF ACQUISITION PLANS
The Company intends aggressively to continue its strategy of
targeted expansion through the acquisition of compatible
businesses and product lines and the formation of strategic
alliances, joint ventures and other business combinations.
Should the Company complete any material acquisition, the
Company's success or failure in integrating the operations of the
acquired company may have a material impact on the future growth
or success of the Company. See "Recent Developments."
POTENTIAL LITIGATION EXPOSURE
ICN is a defendant in various lawsuits including certain
consolidated class action lawsuits alleging, among other things,
violations of federal securities laws. The plaintiffs in these
lawsuits allege that ICN made, or aided and abetted other
defendants in making, misrepresentations of material facts and
omitted to state material facts concerning the business,
financial condition and future prospects of the Company,
primarily concerning developments regarding Virazole(registered
trademark), including statements made in the 1980's concerning
the efficacy and safety of the drug and the market for the drug
in the treatment of AIDS and AIDS related diseases, and
statements made in 1994 and 1995 concerning the Company's NDA for
the use of Virazole(registered trademark) for the treatment of
chronic hepatitis C (the "Hepatitis C NDA").
The Commission is conducting a private investigation (the
"Commission Investigation") with respect to certain matters
pertaining to the status and disposition of the Hepatitis C NDA,
including whether, during the period June 1994 through February
1995, the Company, persons or entities associated with it and
others (including Mr. Milan Panic, Chairman, President and Chief
Executive Officer of the Company), in the offer and sale or in
connection with the purchase and sale of Common Stock, engaged in
possible violations of federal securities laws, by having
possibly: (i) made false or misleading statements or omitted
material facts with respect to the status and disposition of the
Hepatitis C NDA; (ii) purchased or sold Common Stock while in
possession of material, non-public information concerning the
status and disposition of the Hepatitis C NDA; or (iii) conveyed
material, non-public information concerning the status and
disposition of the Hepatitis C NDA, to other persons who may have
purchased or sold Common Stock. The Company is cooperating with
the Commission in its investigation.
The Company has received a Subpoena (the "Subpoena") from a
Grand Jury in the United States District Court, Central District
of California requesting the production of documents covering a
broad range of matters over various time periods. The Company
and Milan Panic are subjects of the investigation. The Company
is cooperating with the production of documents pursuant to the
Subpoena.
DEPENDENCE ON KEY PERSONNEL
The Company believes that its continued success will depend
to a significant extent upon the efforts and abilities of its
management, including Milan Panic, its Chairman, President and
Chief Executive Officer. The loss of their services could have a
material adverse effect on the Company. The Company cannot
predict what effect, if any, the Commission's Investigation and
the Subpoena may have on Mr. Panic's ability to continue to
devote services on a full time basis to the Company. See " -
Potential Litigation Exposure," above.
POTENTIAL PRODUCT LIABILITY EXPOSURE AND LACK OF INSURANCE
The Company could be exposed to possible claims for personal
injury resulting from allegedly defective products. Even if a
drug were approved for commercial use by an appropriate
governmental agency, there can be no assurance that users will
not claim that effects other than those intended may result from
the Company's products. The Company generally self-insures
against potential product liability exposure with respect to its
marketed products, including Virazole(registered trademark).
While to date no material adverse claim for personal injury
resulting from allegedly defective products, including
Virazole(registered trademark), has been successfully maintained
against the Company or any of its predecessors, a substantial
claim, if successful, could have a material adverse effect on the
Company.
GOVERNMENT REGULATION
FDA approval must be obtained in the United States and
approval must be obtained from comparable agencies in other
countries prior to marketing or manufacturing new pharmaceutical
products for use by humans in such respective jurisdictions.
Obtaining FDA approval for new products and manufacturing
processes can take a number of years and involves the expenditure
of substantial resources. Numerous requirements must be
satisfied, including preliminary testing programs on animals and
subsequent clinical testing programs on humans, to establish
product safety and efficacy. No assurance can be given that
authorization of the commercial sale of any new drugs or
compounds by the Company for any application will be secured in
the United States or any other country, or that, if such
authorization is secured, those drugs or compounds will be
commercially successful.
The FDA in the United States and other regulatory agencies
in other countries also periodically inspect manufacturing
facilities. Failure to comply with applicable regulatory
requirements can result in, among other things, sanctions, fines,
delays or suspensions of approvals, seizures or recalls of
products, operating restrictions and criminal prosecutions.
Furthermore, changes in existing regulations or adoption of new
regulations could prevent or delay the Company from obtaining
future regulatory approvals.
The Company is subject to price control restrictions on its
pharmaceutical products in the majority of countries in which it
operates. To date, the Company has been affected by pricing
adjustments in Spain and by the lag in allowed price increases in
Yugoslavia and Mexico, which have created lower sales in U.S.
dollars and reductions in gross profit. Future sales and gross
profit could be materially affected if the Company is unable to
obtain price increases commensurate with the levels of inflation.
COMPETITION
The Company operates in a highly competitive environment.
The Company's competitors, many of whom have substantially
greater capital resources and marketing capabilities and larger
research and development staffs and facilities than the Company,
are actively engaged in marketing products similar to those of
the Company and in developing new products similar to those
proposed to be developed and sold by the Company. Others may
succeed in developing products that are more effective than those
marketed or proposed for development by the Company. Progress by
other researchers in areas similar to those being explored by the
Company may result in further competitive challenges. In early
1996, MedImmune, Inc. began marketing in the United States
RespiGam, a prophylactic drug for the treatment of RSV. The
Company is aware of several other ongoing research and
development programs which are attempting to develop new
prophylactic and therapeutic products for treatment of RSV.
Although the Company will follow publicly disclosed developments
in this field, on the basis of currently available data, it is
unable to evaluate whether RespiGam or the other technology being
developed in these programs poses a threat to the Company's
current market position in the treatment of RSV or its revenue
streams. The Company may also face increased competition from
manufacturers of generic pharmaceutical products when certain of
the patents covering certain of its currently marketed products
expire.
RECENT DEVELOPMENTS
In June 1996, the Company acquired a 72.4% interest in
Lekstredstva, a Russian pharmaceutical company, for approximately
$5.7 million in cash. The Company has subsequently acquired
an additional approximately 16% interest in Lekstredstva from existing
stockholders and intends to make additional purchases to increase its
interest in Lekstredstva to 95%, subject to approval from
Russia's Anti-Monopoly Committee. It is estimated that these purchases
will cost approximately $600,000 in the aggregate.
In July 1996, the Company acquired the Dosimetry Service
division of Siemens Medical for 964,833 Shares, subject to
certain post-closing cash adjustments. Dosimetry is a
leading provider of worldwide commercial services used to
measure occupational exposure to radiation. Siemens Medical
has the right, exercisable on or before September 16, 1996,
to require the Company to repurchase on September 27, 1996,
all of the Shares then owned by it for approximately $23.51
per Share, in cash.
In June 1996, the Company won a competitive bid to purchase
up to a 59% interest in Alkaloida Chemical Co., a Hungarian state-
owned pharmaceutical company, for approximately $21.9 million in
cash. The Company anticipates that this transaction will close
in September 1996, subject to the negotiation of a definitive
agreement.
In May 1996, the Company purchased a 40% investment in KAMED
Financial, Inc. ("KF"), a Delaware company, for an anticipated
investment of $3,000,000. KF formed a joint venture with
Biomedpreparat ("BP"), a Kazak joint stock company which is owned
by the State Property Committee and by the employees of BP, to
convert BP from a Soviet scientific production complex located in
Kazakhstan into a pharmaceutical manufacturing and distribution
plant. KF has a 51% interest in the joint venture.
Neither the acquisitions of Gly-Derm nor Dosimetry (which were
consummated in 1996), nor the completed or proposed acquisitions
discussed above, individually or in the aggregate, constitute the
acquisition of significant businesses as defined by Regulation S-
X promulgated by the Commission.
As previously discussed, in January 1995, an action was
commenced by a former employee against the Company and the
Company's Chairman. The complaint asserted causes of action for
sex discrimination and harassment and for violations of the
California Department of Fair Employment and Housing statute and
a provision of the California Government Code. On June 30, 1996,
the Company settled the case without admitting any wrongdoing.
Terms of the settlement are sealed under court order.
USE OF PROCEEDS
Since this Prospectus relates to the offering of Shares by
the Selling Stockholders, the Company will not receive any of the
proceeds from the sale of the Shares offered hereby. However,
under certain circumstances, the Selling Stockholders (other than
Siemens Medical) will be required to pay to the Company the amount,
if any, by which the proceeds from the sale of their Shares exceeds
certain agreed upon price thresholds. Conversely, under certain
circumstances the Company will be required to pay each Selling
Stockholder the amount, if any, by which the proceeds from the sale
of such Selling Stockholder's Shares is less than certain agreed upon
price thresholds. See "Selling Stockholder -- Price Protection"
SELLING STOCKHOLDERS
An aggregate of 1,198,107 Shares are being offered for the
account of the Selling Stockholders identified in the table
below. The following table provides certain information, as of
the date of this Prospectus, with respect to the Shares owned by
the Selling Stockholders (which information has been furnished to
the Company by the Selling Stockholders). Because the Selling
Stockholders may sell all or part of the Shares which they hold
pursuant to this Prospectus and because this Offering is not
being underwritten on a firm commitment basis, no estimate can be
given as to the amount of Shares that will be held by the Selling
Stockholder upon termination of this Offering. See "Plan of
Distribution."
As of June 30, 1996, (as adjusted to give effect to the
issuance of 964,833 Shares to Siemens Medical as described
under "Recent Developments"), the Company had outstanding
approximately 32,799,833 shares of Common Stock.
SELLING STOCKHOLDER INFORMATION
NAME Number of Percentage of
Shares of Outstanding Shares of
Common Stock Common Stock
Marvin E. Klein, Trustee
Marvin E. Klein Revocable Trust 29,683 *
7/74
Dr. Maurice Belkin, Trustee
Maurice Belkin Revocable Trust 42,830 *
Irving F. Keene and Diane F.
Keene, Trustees of the Diane F. 24,735 *
Keene Insurance Trust
dated December 29, 1989
Helene Davidson and Diane F.
Keene, Trustees of the Diane F. 4,946 *
Keene Grantor Trust
Sidney H. Weber 3,385 *
Steven J. Cohen 1,236 *
Sylvia Glover 1,236 *
Patricia Ann Wendel 13,208 *
Phyllis F. Fine 2,139 *
Jennifer L. Markusic 1,236 *
Noel H. Upfall 12,394 *
Jeffrey M. Weber 1,938 *
Robert T. Goldman 961 *
Daisy P. Ramos 961 *
Daniel B. Seff 961 *
Judith C. Redmond Trustee 387 *
Richard S. Schwartz 387 *
Marvin D. Siegel 387 *
SeaLite Sciences, Inc. 89,264 *
Siemens Medical Systems, Inc. 964,833 3%
_____________ _____
Total 1,198,107
=============
*Less than 1% of the outstanding shares of Common Stock.
All of the Selling Stockholders (other than SeaLite and
Siemens Medical) (the "Gly-Derm Selling Stockholders")
acquired their Shares as partial consideration for the
Company's acquisition of Gly-Derm. SeaLite acquired its
Shares as consideration for the Company's acquisition of its
equity interest in SeaLite. Siemens Medical acquired its
Shares in consideration for the Company's acquisition of
Dosimetry. The registration effected hereby is being
effected pursuant to certain registration rights granted by
the Company at the time of the issuance of the Shares. In
the case of the Shares held by the Gly-Derm Selling
Stockholders, the registration rights extend to transferees
and assigns. If applicable, this Offering would include
sales of Shares by such transferees and assigns.
PRICE PROTECTION/PUT OPTION
Gly Derm
- --------
Pursuant to a Common Stock Undertaking Agreement (the "Gly-Derm
Undertaking Agreement") between Gly-Derm, the Gly-Derm Selling
Stockholders and the Company, if, during the Guaranty Period (as
defined below), Shares are sold by any Gly-Derm Selling
Stockholder pursuant to the Registration Statement at a price
(after deducting customary sales commissions) greater than
approximately $20.83, subject to adjustment under certain
circumstances (the "Gly-Derm Guaranty Price"), such Gly-Derm
Selling Stockholder has agreed to pay to the Company such excess.
Conversely, if, during the Guaranty Period, Shares are sold by
any Gly-Derm Selling Stockholder pursuant to the Registration
Statement at a price (after deducting customary sales
commissions) less than the Guaranty Price, the Company has agreed
to pay such deficit to such Gly-Derm Selling Stockholder. The
obligations of the Company pursuant to these provisions are
required to be paid in Common Stock (valued based upon market
prices of the Common Stock for a specified period prior to such
sale) and the obligations of the Gly-Derm Selling Stockholder
pursuant to the provisions are required to be paid, at the
election of the applicable Gly-Derm Selling Stockholder, in cash,
Common Stock (valued at the prices received by the Gly-Derm
Selling Stockholder upon disposition) or a combination thereof.
Similar provisions apply to sales by the Gly-Derm Selling
Stockholders of Shares pursuant to Rule 144 or as otherwise
approved in advance by the Company (the Company being obligated
under certain circumstances to repurchase Shares based upon then
market price if it does not approve certain requested
dispositions of Shares by Gly-Derm Selling Stockholders).
The Guaranty Period is defined in the Gly-Derm Undertaking
Agreement as the period ending the earlier of (i) 120 days after the
effective date of the Registration Statement (provided that the
Registration Statement remains effective for 120 days), or (ii)
May 28, 1998.
In the event that a Gly-Derm Selling Stockholder is
permitted to sell Shares pursuant to the Registration Statement,
or Rule 144 is available, at the time the Guaranty Period expires
and the then market price of the Common Stock (as defined) is
greater than the Guaranty Price, the Gly-Derm Selling Stockholder
is required to pay the Company the excess in cash, Common Stock
(valued based upon market prices of the Common Stock for a
specified period prior to such sale) or a combination thereof.
If Rule 144 is not available, or the Registration Statement is
not effective, within 30 days after the expiration of the
Guaranty Period, each Gly-Derm Selling Stockholder has a right to
require the Company to repurchase all of his or her Shares at the
Guaranty Price.
The Shares owned by the Gly-Derm Selling Stockholders are
presently held by First Trust of California National Association,
as escrow agent. Of these Shares held in escrow, 1/6 are being
held in escrow in the event the Company has indemnification
claims against the Gly-Derm Selling Stockholders under the
agreement pursuant to which the Company acquired Gly-Derm (the
"Gly-Derm Acquisition Agreement"). The remaining Shares are
being held in escrow in the event the Gly-Derm Selling
Stockholders are required to make payments to the Company
pursuant to the Gly-Derm Undertaking Agreement as described above.
The Shares do not include any shares of Common Stock which
the Gly-Derm Selling Stockholders may be entitled to receive
pursuant an earn-out provision contained in the Gly-Derm
Acquisition Agreement. The maximum earn-out payable by the
Company is $2.6 million, of which the first $1 million is payable
in cash and the balance is payable 50% in cash and 50% in shares
of Common Stock (based upon the market price of the Common Stock
at the time of payment).
SeaLite
- -------
Under the terms of the agreement pursuant to which the
Company issued Shares to SeaLite (the "SeaLite Agreement"), if
the aggregate proceeds (net of broker or dealer fees, discounts
and expenses, and all transfer and other taxes) from sales of
Shares by SeaLite to unaffiliated persons during the Protected
Period (as defined below) is greater than approximately $20.72
times the number of Shares sold, SeaLite is required to pay to
the Company an amount in cash equal to such excess. Conversely,
if the aggregate proceeds (net of broker or dealer fees,
discounts and expenses, and all transfer and other taxes) from
sale of Shares to unaffiliated persons during the Protected
Period is less than approximately $20.72 times the number of
Shares sold, the Company is required to pay to SeaLite an amount
in cash equal to such deficit.
Protected Period means the period from the consummation of
the SeaLite Agreement until ninety (90) days after the earlier of
(i) the effective date of the Registration Statement or (ii) the
date on which the Shares issued to SeaLite are eligible to be
sold under Rule 144.
Siemens Medical Systems, Inc.
Pursuant to a Common Stock Undertaking Agreement (the
"Siemens Undertaking Agreement") between Siemens and the
Company, Siemens Medical has the right, exercisable on or
before September 16, 1996, to require the Company to
repurchase on September 27, 1996, all of the Shares then
owned by it for approximately $23.51 per Share in cash.
The descriptions set forth above of the Gly-Derm
Undertaking Agreement, the SeaLite Agreement and the Siemens
Undertaking Agreement are summaries and as such are subject
to and qualified in their entirety by reference to the text
of the Gly-Derm Undertaking Agreement, the SeaLite Agreement
and the Siemens Undertaking Agreement, respectively, copies
of which are attached as exhibits to the Registration
Statement.
PLAN OF DISTRIBUTION
The Selling Stockholders are offering the Shares for their
own account, and not for the account of the Company. The
Company will not receive any proceeds from the sale of the
Shares by the Selling Stockholders. However, under certain
circumstances, the Selling Stockholders (other than Siemens
Medical) will be required to pay to the Company the amount,
if any, by which the proceeds from the sale of their Shares
exceed certain agreed upon price thresholds. Conversely,
under certain circumstances the Company will be required to
pay each Selling Stockholder (other than Siemens Medical)
the amount, if any, by which the proceeds from the sale of
such Selling Stockholder's Shares is less than certain
agreed upon price thresholds. See "Selling Stockholder --
Price Protection."
The Shares may be sold from time to time by the Selling
Stockholders or, in certain cases, by their transferees or
assigns. Such sales may be made in the over-the-counter market,
on the New York Stock Exchange or other exchanges (if the Common
Stock is listed for trading thereon), or otherwise at prices and
at terms then prevailing, at prices related to the then current
market price or at negotiated prices. The Shares may be sold by
any one or more of the following methods: (a) a block trade in
which the broker or dealer so engaged will attempt to sell the
securities as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases
by a broker as principal and resale by such broker or dealer for
its account; (c) ordinary brokerage transactions and transactions
in which the broker solicits purchasers; and (d) privately
negotiated transactions. In addition, any Shares that qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather
than pursuant to this Prospectus.
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in
the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act and any commissions
received by such broker-dealer, agent or underwriter and any
profit on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the
Securities Act.
Under the Exchange Act and the regulations thereunder, any
person engaged in a distribution of the Shares offered by this
Prospectus may not simultaneously engage in market making
activities with respect to the Common Stock during any applicable
"cooling off" periods prior to the commencement of such
distribution. In addition, and without limiting the foregoing,
such Selling Stockholder will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder
including, without limitation, Rules 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of Common
Stock by such Selling Stockholder.
In the Gly-Derm Undertaking Agreement, the Company has agreed
to indemnify the Gly-Derm Selling Stockholders and each person
controlling a Gly-Derm Selling Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof),
including any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss,
damage, liability or action, arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact
contained in the Registration Statement, or based on 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, or any violation by the Company of the Securities
Act or any rule or regulation thereunder applicable to the
Company and relating to action or inaction required of the
Company in connection with the Registration Statement; provided
that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission
based upon written information furnished to the Company by the
Gly-Derm Stockholders and stated to be specifically for use in
the Registration Statement. The Gly-Derm Selling Stockholders
have each agreed to indemnify the Company, each of its directors
and officers and each person who controls the Company within the
meaning of the Securities Act and the rules and regulations
thereunder, against all claims, losses, damages and liabilities
(or actions in respect thereof), including any legal or any other
expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action,
arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in the
Registration Statement or 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, in each
case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged
omission) is made in the Registration Statement in reliance upon
and in conformity with written information furnished to the
Company by the Gly-Derm Selling Stockholders and stated to be
specifically for use in the Registration Statement; provided,
however, that the obligations of the Gly-Derm Selling
Stockholders are limited to an amount equal to the proceeds to
the Gly-Derm Selling Stockholders of Shares sold pursuant to the
Registration Statement or otherwise as contemplated by the
Gly-Derm Undertaking Agreement.
In the Siemens Undertaking Agreement, the Company and Siemens
Medical agreed to mutual indemnification arrangements substantially
the same as the indemnification arrangements described above.
There can be no assurance that the Selling Stockholders will
sell any or all of the Shares offered by them hereunder. To the
extent required, the Company will use its best efforts to file,
during any period in which offers or sales are being made, one or
more supplements to this Prospectus to describe any material
information with respect to the plan of distribution not
previously disclosed in this Prospectus or any material change to
such information in this Prospectus.
The registration effected hereby is being effected pursuant
to certain registration rights previously granted by the Company
to the Gly-Derm Selling Stockholders in the Gly-Derm Undertaking
Agreement, to SeaLite in the SeaLite Agreement and to Siemens
Medical in the Siemens Undertaking Agreement. The Company
will bear the expense of such registration, other than selling
commissions and fees and expenses of counsel and other advisors
to the Selling Stockholders.
LEGAL MATTERS
The legality of the Shares offered hereby will be passed
upon for the Company by David C. Watt, Executive Vice President,
General Counsel and Corporate Secretary of the Company. As of
July 15, 1996, Mr. Watt beneficially owned 100,332 shares of
Common Stock, including 98,337 shares which he has the right
to acquire upon the exercise of currently exercisable stock
options.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated balance sheets as of December 31, 1995 and
1994, and the consolidated statements of income, retained
earnings and cash flows for each of the three years in the period
ended December 31, 1995, incorporated by reference in this
Prospectus, have been included herein in reliance on the report,
which includes, as it relates to 1994 and 1993, an emphasis of
matter paragraph related to certain transactions between
affiliates, of Coopers & Lybrand L.L.P., independent public
accountants, given on the authority of that firm as experts in
auditing and accounting. With respect to the unaudited interim
financial information for the periods ended March 31, 1996 and
1995, incorporated by reference in this Prospectus, the
independent accountants have reported that they have applied
limited procedures in accordance with professional standards for
a review of such information. However, their separate report
included in the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 1996, and incorporated by reference
herein, states that they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the
degree of reliance on their report on such information should be
restricted in light of the limited nature of the review
procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act for
their report on the unaudited interim financial information
because that report is not a "report" or a "part" of the
Registration Statement prepared or certified by the accountants
within the meaning of Sections 7 and 11 of the Securities Act.
Any financial statements and schedules hereafter
incorporated by reference in the Registration Statement of which
this Prospectus is a part, that have been audited and are the
subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon
the authority of such firms as experts in accounting and auditing
to the extent covered by consents filed with the Commission.
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS,
IN CONNECTION WITH THIS OFFERING, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses of the
Registrant in connection with the distribution of the securities
being registered hereunder. The Selling Stockholders will not
bear any of these expenses.
<TABLE>
<CAPTION>
<S> <C>
SEC Filing Fee................................. $ 7,715.34
Legal Fees and Expenses........................ $ 40,000.00
Accounting Fees and Expenses................... $ 15,000.00
Miscellaneous.................................. $ 2,500.00
-----------
Total $ 65,215.34
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware
empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact
that he or she is or was a director, officer, employee or agent
of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation or enterprise. Depending on the character of the
proceeding, a corporation may indemnify against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the person indemnified acted
in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, had no cause
to believe his or her conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification
may be made in respect to any claim, issue or matter as to which
such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought
shall determine that despite the adjudication of liability such
person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
Section 145 further provides that to the extent a director
or officer of a corporation has been successful in the defense of
any action, suit or proceeding referred to above or in the
defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection therewith.
However, if the director or officer is not successful in the
defense of any action, suit or proceeding as referred to above or
in the defense of any claim, issue or matter therein, he shall
only be indemnified by the corporation as authorized in the
specific case upon a determination that indemnification is proper
because he or she met the applicable standard set forth above as
determined by a majority of the disinterested Board of Directors
or by the stockholders.
The Registrant's bylaws provide indemnification to its
officers and directors against liability they may incur in their
capacity as such, which indemnification is similar to that
provided by Section 145, unless a determination is reasonably and
promptly made by a majority of the disinterested Board of
Directors that the indemnitee acted in bad faith and in a manner
that the indemnitee did not believe to be in or not opposed to
the best interests of the Registrant, or, with respect to any
criminal proceeding, that the indemnitee believed or had
reasonable cause to believe that his or her conduct was unlawful.
The Registrant carries directors' and officers' liability
insurance, covering losses up to $5,000,000 (subject to a
$500,000 deductible).
The Registrant, as a matter of policy, enters into
indemnification agreements with its directors and officers
indemnifying them against liability they may incur in their
capacity as such. The indemnification agreements require no
specific standard of conduct for indemnification and make no
distinction between civil and criminal proceedings, except in
proceedings where the dishonesty of an indemnitee is alleged.
Such indemnification is not available if an indemnitee is
adjudicated to have acted in a deliberately dishonest manner with
actual dishonest purpose and intent where such acts were material
to the adjudicated proceeding. Additionally, the indemnity
agreements provide indemnification for any claim against an
indemnitee where the claim is based upon the indemnitee obtaining
personal advantage or profit to which he or she was not legally
entitled, the claim is for an accounting of profits made in
connection with a violation of Section 16(b) of the Securities
Exchange Act of 1934, or similar state law provision, or the
claim was brought about or contributed to by the dishonesty of
the indemnitee.
Section 102(b) (7) of the Delaware General Corporation Law,
as amended, permits a corporation to include in its certificate
of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director,
provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174
of the Delaware General Corporation Law (relating to unlawful
payment of dividend and unlawful stock purchase and redemption),
or (iv) for any transaction from which the director derived an
improper personal benefit. The Registrant has provided in its
certificate of incorporation, as amended, that its directors
shall be exculpated from liability as provided under Section
102(b) (7).
The foregoing summaries are necessarily subject to the
complete text of the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation and the agreements
referred to above and are qualified in their entirety by
reference thereto.
ITEM 16. EXHIBITS
4.1 Amended and Restated Certificate of Incorporation of
Registrant, previously filed as Exhibit 3.1 to
Registration Statement No. 33-83952 on Form S-1, which is
incorporated herein by reference, as amended by the
Certificate of Merger, dated November 10, 1994, of ICN
Pharmaceuticals, Inc., SPI Pharmaceuticals, Inc., and
Viratek, Inc. with and into ICN Merger Corp.
4.2 Bylaws of the Registrant, previously filed as Exhibit 3.2
to Registration Statement No. 33-83952 on Form S-1,
which is incorporated herein by reference.
4.3 Form of Rights Agreement, dated as of November 2, 1994
between the Registrant and American Stock Transfer &
Trust Company as Trustee, previously filed as Exhibit 4.3
to Registration Statement on Form 8-A, dated November
10, 1994.
4.4. Common Stock Undertaking, dated as of February 28, 1996,
by and among Gly-Derm, Inc., certain stockholders listed
therein and the Registrant.*
4.5 Stock Purchase Agreement by and among SeaLite Science,
Inc. and the Registrant.*
4.6 Common Stock Undertaking Agreement dated July 18, 1996, by
and among Siemens Medical Systems, Inc., and the
Registrant.
5. Opinion of David C. Watt, Executive Vice President,
General Counsel and Corporate Secretary of the
Registrant, regarding the legality of the securities
being registered.
15.1 Awareness Letter of Independent Accountant regarding
Unaudited Interim Financial Information.
15.2 Review Report of Independent Accountant for the period
ended March 31, 1996, previously filed as Exhibit 15 to
Quarterly Report on Form 10-Q for the quarter ended March
31, 1996, and incorporated herein by reference.
23.1 Consent of Coopers & Lybrand L.L.P. Independent Public
Accountants.
23.2 Consent of David C. Watt (contained in his opinion filed
as Exhibit 5).
24. Power of Attorney.*
*Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs (i)
and (ii) do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of offering.
(4) That, 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 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.
(5) 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 that
foregoing provisions, 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 that Act 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 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Costa Mesa and State of
California on July 22, 1996.
ICN PHARMACEUTICALS, INC.
/s/ Milan Panic
By: Milan Panic
Chairman, President and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITY INDICATED AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
/s/ Milan Panic
- -------------------------------
Milan Panic Chairman and Chief July 22, 1996
Executive Officer
(Principal Executive
Officer)
/s/ John E. Giordani
- -------------------------------
John E. Giordani Executive Vice July 22, 1996
President, Chief
Financial Officer
(Principal Financial
and Accounting
Officer)
*
- -------------------------------
Norman Barker, Jr. Director July 22, 1996
*
- -------------------------------
Senator Birch E. Bayh, Jr. Director July 22, 1996
*
- -------------------------------
Alan F. Charles Director July 22, 1996
*
- -------------------------------
Roger Guillemin, M.D., Ph.D. Director July 22, 1996
*
- -------------------------------
Adam Jerney Director, Executive July 22, 1996
Vice President, Chief
Operating Officer
*
- -------------------------------
Dale M. Hanson Director July 22, 1996
*
- -------------------------------
Weldon B. Jolley, Ph.D. Director July 22, 1996
*
- -------------------------------
Jean-Francois Kurz Director July 22, 1996
*
- -------------------------------
Thomas H. Lenagh Director July 22, 1996
*
- -------------------------------
Charles T. Manatt Director July 22, 1996
*
- -------------------------------
Stephen D. Moses Director July 22, 1996
*
- -------------------------------
Michael Smith, Ph.D. Director July 22, 1996
*
- -------------------------------
Roberts A. Smith, Ph.D. Director July 22, 1996
*
- -------------------------------
Richard W. Starr Director July 22, 1996
*By: /s/ David C. Watt
David C. Watt
As Attorney-in-Fact
INDEX TO EXHIBITS
4.1 Amended and Restated Certificate of Incorporation of
Registrant, previously filed as Exhibit 3.1 to
Registration Statement No. 33-83952 on Form S-1, which is
incorporated herein by reference, as amended by the
Certificate of Merger, dated November 10, 1994, of ICN
Pharmaceuticals, Inc., SPI Pharmaceuticals, Inc., and
Viratek, Inc. with and into ICN Merger Corp.
4.2 Bylaws of the Registrant, previously filed as Exhibit 3.2
to Registration Statement No. 33-83952 on Form S-1, which
is incorporated herein by reference.
4.3 Form of Rights Agreement, dated as of November 2, 1994
between the Registrant and American Stock Transfer &
Trust Company as Trustee, previously filed as Exhibit 4.3
to Registration Statement on Form 8-A, dated November 10,
1994.
4.4. Common Stock Undertaking, dated as of February 28, 1996,
by and among Gly-Derm, Inc., certain stockholders listed
therein and the Registrant.*
4.5 Stock Purchase Agreement by and among SeaLite Science,
Inc. and the Registrant.*
4.6 Common Stock Undertaking Agreement dated July 18, 1996, by
and among Siemens Medical Systems, Inc., and the Registrant.
5. Opinion of David C. Watt, Executive Vice President,
General Counsel and Corporate Secretary of the
Registrant, regarding the legality of the securities
being registered.
15.1 Awareness Letter of Independent Accountant regarding
Unaudited Interim Financial Information.
15.2 Review Report of Independent Accountant for the period
ended March 31, 1996, previously filed as Exhibit 15 to
Quarterly Report on Form 10-Q for the quarter ended March
31, 1996, and incorporated herein by reference.
23.1 Consent of Coopers & Lybrand L.L.P. Independent Public
Accountants.
23.2 Consent of David C. Watt (contained in his opinion filed
as Exhibit 5).
24. Power of Attorney.*
*Previously filed.
Exhibit 4.6
COMMON STOCK UNDERTAKING
------------------------
THIS COMMON STOCK UNDERTAKING ("Agreement") dated as
of July 18, 1996, is entered into by and among SIEMENS MEDICAL
SYSTEMS, INC., a Delaware corporation (hereinafter referred to
as the "Seller") and ICN PHARMACEUTICALS, INC., a Delaware
corporation (hereinafter referred to as "ICN").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, ICN and the Seller have entered into that
certain Asset Purchase Agreement dated as of June 13, 1996
(the "Purchase Agreement"), pursuant to which ICN desires to
purchase and the Seller desires to sell certain of the assets,
properties and rights comprising the Seller's Dosimetry
Service Business (the "Business"), and ICN desires to assume
from the Seller, and the Seller desires to transfer to ICN,
certain liabilities related to the Business; and
WHEREAS, the execution and delivery of this
Agreement with respect to the issuance of Common Stock of ICN,
$.01 par value per share ("Common Stock"), to be delivered by
ICN under the Purchase Agreement, is a condition to the
consummation of the transactions contemplated by the Purchase
Agreement.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Delivery of ICN Shares. ICN agrees that in
consideration of the transfer of the Transferred Assets and
the assumption of the Assumed Liabilities (as such terms are
defined in the Purchase Agreement) and consummation of the
transactions contemplated by the Purchase Agreement, on the
Closing Date (as defined in the Purchase Agreement), ICN has
delivered to the Seller that number of previously authorized
but unissued and unregistered shares of Common Stock (the "ICN
Shares") having a fair market value, as of the Closing Date,
equal to the Purchase Price (as defined in Section 1.05 of the
Purchase Agreement, the "Purchase Price"). Such fair market
value was computed based upon the average daily closing price
of the Common Stock on the New York Stock Exchange for the ten
trading days ending on the fourth trading day preceding the
Closing Date. The term "Guaranteed Share Price" shall mean
the quotient obtained by dividing the Purchase Price by the
number of ICN Shares issued to the Seller on the Closing Date.
2. Seller's Put.
------------
2.1 Seller's Put. Notwithstanding any
provision to the contrary herein, at any time after the
Closing Date, and on or before September 16, 1996, the Seller
shall have the absolute right, at its sole option, by
irrevocable written notice to ICN (the "Put Notice"), to
require ICN to purchase, for cash at a closing (the "Put
Closing") to be held on September 27, 1996 (the "Put Closing
Date") all the ICN Shares then owned by the Seller for a price
per share equal to the Guaranteed Share Price. The foregoing
right in the Seller to cause the repurchase of its ICN Shares
is referred to herein as the "Seller's Put Option."
2.2 No Set-Off. ICN shall not be entitled to
deduct or withhold from, or off-set against, any amounts owed
to the Seller pursuant to this Agreement for any amounts owed
or alleged to be owed by the Seller to ICN, (including amounts
owed pursuant to the exercise of the Seller's Put Option) for
any reason whatsoever, including claims under the Purchase
Agreement.
2.3 Adjustments to Guaranteed Share Price. In
the event that ICN issues additional shares of Common Stock
pursuant to a stock dividend, stock distribution or
subdivision, the Guaranteed Share Price shall, concurrently
with the effectiveness of such stock dividend, stock
distribution or subdivision, be proportionately reduced, and
in the event the outstanding shares of Common Stock of ICN
shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the
Guaranteed Share Price shall, concurrently with the
effectiveness of such combination or consolidation, be
proportionately increased.
3. Representations and Warranties of ICN. ICN
represents and warrants to the Seller as follows:
3.1 Authorization of the ICN Shares. The
issuance of the ICN Shares has been authorized by all
requisite corporate and stockholder action and the ICN Shares
have been authorized for listing on the New York Stock
Exchange upon official notice of issuance. Upon the delivery
of the certificates evidencing the ICN Shares in exchange for
the Transferred Assets and assumption of the Assumed
Liabilities in accordance with the terms of this Agreement and
the Purchase Agreement, the ICN Shares will be validly issued,
fully paid and nonassessable, and free and clear of all
security interests, liens, encumbrances, options, calls,
pledges, trusts, assessments, covenants, restrictions,
reservations, commitments, voting trusts and stockholders'
agreements, obligations and other burdens (collectively,
"Encumbrances"). Upon the consummation of the transactions
contemplated by the Purchase Agreement and registration of the
ICN Shares in the name of the Seller in the stock records of
ICN, the Seller will own all the ICN Shares free and clear of
all Encumbrances. ICN has full and lawful authority to issue,
transfer and deliver the ICN Shares to the Seller hereunder
and this Agreement, the Purchase Agreement and each agreement
ancillary thereto have been duly and validly authorized,
executed and delivered by ICN and are legally binding on ICN
in accordance with their respective terms, subject to laws of
general application relating to bankruptcy, insolvency and
relief of debtors.
3.2 Offering of the ICN Shares. Neither ICN
nor any person acting on its behalf has, in connection with
the transactions contemplated herein, and the issuance and
sale of the ICN Shares, offered the ICN Shares or any
substantially similar securities to, or solicited any offers
to acquire any thereof from, or otherwise approached or
negotiated in respect thereof with, any person or persons.
Neither ICN nor anyone acting on its behalf has directly or
indirectly sold or offered for sale, or will directly or
indirectly sell or offer for sale, the ICN Shares to, or
solicited any offer to buy any thereof from, any person in
violation of the Securities Act of 1933, as amended (the
"Act"), or of any state securities law. Based upon Seller's
representations made hereunder, the issuance and sale of the
ICN Shares in the manner contemplated by the Purchase
Agreement will be exempt from registration under the Act.
3.3 Information Concerning ICN. ICN has filed
all forms, reports and documents required to be filed by it
with the Commission, and has heretofore delivered to the
Seller true and complete copies of its Annual Report on Form
10-K for its fiscal year ended December 31, 1995, its
Quarterly Report on Form 10-Q for its fiscal quarter ended
March 31, 1996, its 1995 Annual Report to Stockholders, and
its proxy statement for the annual meeting of stockholders
held on May 29, 1996 (the forms, reports and other documents
referred to in this sentence being referred to herein
collectively, as the "SEC Reports"). As of their respective
dates, (i) the SEC Reports complied, and all similar documents
filed prior to the Closing will comply, in all material
respects, with the requirements of the Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, and the rules and regulations of the Commission
promulgated thereunder applicable to such SEC Reports and (ii)
none of the SEC Reports contains, nor will any similar
document filed after the date of this Agreement contain, any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of ICN included in the SEC Reports
(including any similar documents filed after the date of this
Agreement) comply as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto and have
been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the Commission) applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the
consolidated financial position of ICN and its consolidated
subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to
normal, year-end audit adjustments).
3.4 Absence of Certain Changes. Except as set
forth herein or in Schedule 3.4 hereto, and in ICN's quarterly
report on Form 10-Q for the quarter ended March 31, 1996,
since March 31, 1996 there has not been (a) any acquisition or
disposition by ICN or its subsidiaries of any asset or
property material to ICN and its subsidiaries taken as a
whole, other than in the ordinary course of business; (b) any
damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting, either in any
case or in the aggregate, the property, business or prospects
of ICN and its subsidiaries taken as a whole; (c) any
declaration, setting aside or payment of any dividend or any
other distribution in respect of securities of ICN; (d) any
direct or indirect redemption, purchase or other acquisition
of any securities of ICN, (e) any incurrence, directly or
indirectly, by ICN or any subsidiary, of any indebtedness
material to ICN and its subsidiaries taken as a whole, other
than in the ordinary course of business, (f) any modification
or cancellation of any agreement between ICN and any entity
controlling or under common control with ICN disclosed in the
documents referred to in Section 3.3, or any entry by ICN or
any subsidiary into any material transaction other than in the
ordinary course of business, or (g) any change in the
condition (financial or otherwise), assets, liabilities,
sales, income or business of ICN and its subsidiaries taken as
a whole, or in their relationships with suppliers, customers,
lessors or others, other than changes in the ordinary course
of business, which have not been, either in any case or in the
aggregate, materially adverse.
4. Representations and Warranties of the Seller.
The Seller represents and warrants to ICN as follows:
4.1 Experience. The Seller is knowledgeable,
sophisticated and experienced in making investments, and is
qualified to make decisions with respect to investment in the
ICN Shares.
4.2 Resale. The Seller understands that the
ICN Shares have not been registered under the Act, and hereby
agrees not to offer, sell or otherwise transfer such ICN
Shares unless and until registered under the Act or unless
pursuant to an exemption from the registration requirements of
the Act.
4.3 Rule 144. The Seller acknowledges that
the ICN Shares must be held indefinitely unless they are
subsequently registered under the Act or an exemption from
such registration is available. The Seller has been advised
or is aware of the provisions of Rule 144 and Rule 145
promulgated under the Act and that such Rules may not become
available for resale of the ICN Shares. Nothing in this
Section 4.3, or elsewhere in Articles 4 or 5, shall be deemed
to restrict or prohibit the Seller's ability to exercise the
Seller's Put Option.
4.4 Financial Condition. The Seller's
financial condition is such that it is able to bear all risks
of holding the ICN Shares for an indefinite period of time.
5. Restrictions on Transfer, Registration of Shares,
etc.
5.1 Restrictions on Transferability. The ICN
Shares shall not be transferable, except in compliance with
the provisions of the Act.
5.2 Certain Definitions. As used in this
Section 5 the following terms shall have the following
respective meanings:
"Commission" shall mean the Securities and
Exchange Commission or any other federal agency at the time
administering the Act.
"Restricted Securities" shall mean the
securities of ICN required to bear or bearing the legend set
forth in Section 5.3 hereof.
"Registrable Securities" shall mean the ICN
Shares or other securities issued with respect thereto upon
any stock split, stock dividend, recapitalization or similar
event.
The terms "register," "registered" and
"registration" shall refer to a registration effected by
preparing and filing a registration statement in compliance
with the Act and applicable rules and regulations thereunder,
and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses
incurred by ICN in compliance with Sections 5.5 and 5.6
hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of
counsel for ICN, blue sky fees and expenses, and the expense
of any special audits incident to or required by any such
registration.
"Selling Expenses" shall mean all underwriting
discounts and selling commissions applicable to the sale of
Registrable Securities and all fees and disbursements of
counsel for the Seller.
5.3 Restrictive Legend. Each certificate
representing (i) the ICN Shares, or (ii) any other securities
issued in respect of the ICN Shares upon any stock split,
stock dividend, recapitalization, merger, consolidation or
similar event, shall (unless otherwise permitted or unless the
securities evidenced by such certificate shall have been
registered under the Act) be stamped or otherwise imprinted
with a legend in the following form (in addition to any legend
required under applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAW.
THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ICN THAT SUCH REGISTRATION IS NOT
REQUIRED; PROVIDED, HOWEVER, THAT NOTHING IN THIS
PARAGRAPH SHALL BE DEEMED TO RESTRICT OR PROHIBIT THE
SELLER FROM SELLING THESE SECURITIES IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 2.1 OF THE COMMON STOCK
UNDERTAKING, DATED AS OF JULY 18, 1996, BETWEEN THE
SELLER AND ICN.
Upon request of the Seller, ICN shall remove
the foregoing legend from the certificate or issue to Seller a
new certificate therefor free of any transfer legend, if, with
such request, ICN shall have received either the opinion
referred to in Section 5.4(i) or the "no-action" letter
referred to in Section 5.4(ii) to the effect that any transfer
by the Seller of the securities evidenced by such certificate
will not violate the Act and applicable state securities laws.
5.4 Notice of Proposed Transfers. The Seller
by acceptance of the certificates representing Restricted
Securities agrees to comply in all respects with the
provisions of this Section 5.4. Prior to any proposed
transfer of any Restricted Securities (other than under
circumstances described in Sections 5.5 and 5.6 hereof or
pursuant to the Seller's Put Option), the Seller shall give
written notice to ICN of its intention to effect such
transfer. Each such notice shall describe the manner and
circumstances of the proposed transfer in sufficient detail,
and shall be accompanied (except in transactions in compliance
with Rule 144 or pursuant to Section 2.1) by either (i) a
written opinion of legal counsel who shall be reasonably
satisfactory to ICN, addressed to ICN and reasonably
satisfactory in form and substance to ICN's counsel, to the
effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Act, or (ii) a
"no action" letter from the Commission to the effect that the
distribution of such securities without registration will not
result in a recommendation by the staff of the Commission that
action be taken with respect thereto, whereupon the Seller
shall be entitled to transfer such Restricted Securities in
accordance with the terms of the notice delivered by the
Seller to ICN. Each certificate evidencing the Restricted
Securities transferred as above provided shall bear the
restrictive legend set forth in Section 5.3 above, except that
such certificate shall not bear such restrictive legend if the
opinion of counsel or "no-action" letter referred to above is
to the further effect that such legend is not required in
order to establish compliance with any provisions of the Act.
5.5 Requested Registration.
----------------------
(a) Request for Registration. In
accordance with Section 5.08 of the Purchase Agreement, ICN
agrees to file with the Commission within five days of the
date of this Agreement a registration statement on Form S-3 to
effect a registration under the Act with respect to all the
ICN Shares (the "Initial Requested Registration"). If at any
other time during the two-year period following the Closing
Date, as extended pursuant to Section 5.13, ICN shall receive
from the Seller a written request that ICN effect any
registration with respect to all or a part of the Registrable
Securities, and in connection with the Initial Requested
Registration, ICN will use its best efforts to effect each
such registration (including, without limitation, the
execution of any undertaking to file post-effective
amendments, appropriate qualification under applicable blue
sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Act). ICN shall
not be obligated to effect, or to take any action to effect,
any such registration pursuant to this Section 5.5: (i) in
any particular jurisdiction in which ICN would be required to
execute a general consent to service of process in effecting
such registration, qualification or compliance, unless ICN is
already subject to service in such jurisdiction and except as
may be required by the Act or applicable rules or regulations
thereunder; or (ii) after ICN has effected two such
registrations pursuant to this Section 5.5(a) and such
registrations have been declared or ordered effective and
shall have been kept effective for the period referred to in
Section 5.8(a); provided, that ICN shall not be required to
effect more than one such registration in any fiscal year of
ICN; and provided, further, that if any Registrable Securities
included in a request by the Seller under this Section 5.5(a)
have not been registered after ICN has effected such two
registrations because they were excluded pursuant to the
provisions of Section 5.5(b) below, then the Seller shall have
the right to request such additional registration or
registrations, on the same terms and conditions as provided in
this Section 5.5, as shall be necessary to effect the
registration of such excluded Registrable Securities; or (iii)
if the number of ICN Shares, in the aggregate, requested to be
included in any such registration by the Seller, is less than
the lower of the number of shares equal to 1/3 of the ICN
Shares or the remaining balance of ICN Shares not previously
registered hereunder. Subject to the foregoing clauses (i),
(ii) and (iii), ICN shall file a registration statement
covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request
of the Seller (it being understood and agreed that ICN has
agreed to file with the Commission a registration statement in
connection with the Initial Requested Registration within five
days of the date of this Agreement, and no further notice from
the Seller to ICN with respect thereto is required).
Any registration statement filed pursuant
to the request of the Seller may, subject to the provisions of
Section 5.5(b) below, include other securities of ICN,
including its own securities and securities which are held by
persons who, by virtue of agreements with ICN, are entitled to
include their securities in any such registration.
(b) Underwriting. If the Seller intends
to distribute the Registrable Securities covered by its
request by means of an underwritten offering, it shall so
advise ICN as a part of its request made pursuant to Section
5.5. The Seller may include in any such underwriting all the
Registrable Securities it holds, subject to the allocation
provided hereinbelow.
If holders of securities of ICN who are
entitled, by contract with ICN, to have securities included in
such an underwritten offering (the "Other Shareholders")
request such inclusion, the Seller shall offer to include the
securities of such Other Shareholders in the underwriting and
may condition such offer on their acceptance of the further
applicable provisions of this Section 5. ICN shall (together
with the Seller and the Other Shareholders proposing to
distribute their securities through such underwriting) enter
into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for
such underwriting by the Seller who shall be reasonably
acceptable to ICN. Notwithstanding any other provision of
this Section 5.5, if the representative advises the Seller in
writing that the success of such offering would be materially
and adversely affected by inclusion of all the securities
requested to be included, the number of shares of Registrable
Securities and other securities that may be included in the
registration and underwriting shall be allocated among the
Seller and Other Shareholders in proportion as nearly as
practicable, to the respective amounts of Registrable
Securities and other securities which they had requested to be
included in such registration at the time of filing the
registration statement. No Registrable Securities or any
other securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in
such registration. If the Seller or any Other Shareholder who
has requested inclusion in such registration as provided above
disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to ICN, the
underwriter and the Seller. The securities so withdrawn shall
also be withdrawn from registration. If the underwriter has
not limited the number of Registrable Securities or other
securities to be underwritten, ICN may include its securities
for its own account in such registration if the underwriter so
agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such
registration and underwriting will not thereby be limited.
5.6 Company Registration.
--------------------
(a) If at any time during the three-year
period following the closing of the Purchase Agreement, as
extended pursuant to Section 5.13, ICN shall determine to
register any of its securities either for its own account or
the account of a security holder or holders exercising their
respective demand registration rights, other than a
registration relating solely to a Commission Rule 145
transaction, or a registration on any registration form which
does not permit secondary sales or does not include
substantially as much information as would be required to be
included in a registration statement covering the sale of
Registrable Securities, ICN will: (i) promptly give to the
Seller written notice thereof at least 20 days before the
filing of any registration statement (which shall include a
list of the jurisdictions in which ICN intends to attempt to
qualify such securities under the applicable blue sky or other
state securities laws); and (ii) include in such registration
(and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all or
a part of the Seller's Registrable Securities as shall be
specified in a written request or requests, made by the Seller
within fifteen (15) days after receipt of the written notice
from ICN described in clause (i) above, except (A) as set
forth in Section 5.6(b) below, (B) ICN shall not be required
to include Registrable Securities in any such registration if
in the opinion of ICN's investment bankers delivered to the
Seller in writing the inclusion of such Registrable Securities
would materially and adversely affect the success of the
offering in which such Registrable Securities are proposed for
inclusion, and (C) that ICN shall not be required to include
Registrable Securities in more than one such registration which
registration shall have been kept effective for the period
referred to in Section 5.8(a); provided, that if any
Registrable Securities included in a request by the Seller
under this Section 5.6(a) have not been registered after ICN
has effected one such registration because they were excluded
pursuant to the provisions of Section 5.6(b) below, then the
Seller shall have the right to request inclusion of such
Registrable Securities in such additional like registrations
by ICN, on the same terms and conditions as provided in this
Section 5.6(a), as shall be necessary to effect the
registration of such excluded Registrable Securities.
(b) Underwriting. If the registration of
which ICN gives notice is for a registered public offering
involving an underwriting, ICN shall so advise the Seller as
part of the written notice given pursuant to Section
5.6(a)(i). In such event the right of the Seller to
registration pursuant to Section 5.6 shall be conditioned upon
the Seller's participation in such underwriting and the
inclusion of the Seller's Registrable Securities in the
underwriting to the extent provided herein. The Seller,
together with ICN and the Other Shareholders distributing
their securities through such underwriting, if any, shall
enter into an underwriting agreement in customary form with
the underwriter or underwriters selected by ICN or the Other
Shareholders, as the case may be. Notwithstanding any other
provision of this Section 5.6, if the underwriter determines
that the success of such offering would be materially and
adversely affected by inclusion of all the securities
requested to be included, the underwriter may (subject to the
allocation priority set forth below) exclude from such
registration and underwriting some or all of the Registrable
Securities which would otherwise be underwritten pursuant
hereto. ICN shall so advise all holders of securities
requesting registration, and the number of shares or
securities that are entitled to be included in the
registration and underwriting shall be allocated in the
following manner. The securities of ICN held by officers and
directors of ICN shall be excluded from such registration and
underwriting to the extent required by such limitation, and,
if a limitation on the number of shares is still required, the
number of shares that may be included in the registration and
underwriting shall be allocated among the Seller and Other
Shareholders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities and other
securities which they had requested to be included in such
registration at the time of filing the registration statement.
If the Seller or any officer, director or Other Shareholder
disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to ICN and the
underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
5.7 Expenses of Registration. All
Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to this
Section 5 shall be borne by ICN, and all Selling Expenses
(except fees and disbursements of counsel, which shall be
borne by the party engaging such counsel) shall be borne by
the holders of the securities so registered pro rata on the
basis of the number of their shares so registered.
5.8 Registration Procedures. In the case of
each registration effected by ICN pursuant to Section 5, ICN
will keep the Seller advised in writing as to the initiation
of each registration and as to the completion thereof. At
its expense, ICN will:
(a) Keep such registration effective for
a period of one hundred twenty (120) days or until the Seller
has completed the distribution described in the registration
statement relating thereto, whichever first occurs and in
furtherance thereof, ICN shall prepare and file with the
Commission such amendments and supplements to the registration
statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective
for such period;
(b) Furnish such number of prospectuses
and other documents incident thereto, as the same shall be
amended or supplemented from time to time, as the Seller from
time to time may reasonably request;
(c) Use its best efforts to register or
qualify the Registrable Securities covered by such
registration statement under the securities or blue sky laws
of such jurisdictions as the underwriter for such offering or
any Seller may reasonably request; provided that ICN shall in
no event be required to qualify to do business as a foreign
corporation in any jurisdiction where it is not otherwise
required to be qualified, to amend its Restated Certificate of
Incorporation, as amended, or to change the composition of its
assets at the time to conform with the securities or blue sky
laws of such jurisdictions, to take any action that would
subject it to service of process in suits other than those
arising out of the offer and sale of the Registrable
Securities covered by the registration statement; or to
subject itself to taxation in any jurisdiction where it has
not theretofore done so;
(d) Promptly notify the Seller of any
stop order or similar proceeding initiated by state or federal
regulatory bodies and use its best efforts to expeditiously
remove such stop order or similar proceeding;
(e) Cause all Registrable Securities to
be listed on each securities exchange on which similar
securities issued by ICN are then listed and, if not so
listed, to be listed on the NASD's automated quotation system
on which similar securities issued by ICN are listed;
(f) Provide a transfer agent and
registrar for all such Registrable Securities not later than
the effective date of such registration statement;
(g) Otherwise use its best efforts to
comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering
the period of at least twelve months beginning with the first
day of ICN's first full calendar quarter after the effective
date of the Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Act and
Rule 158 under the Act;
(h) prior to filing any registration
statement, prospectus or amendment with the Commission, ICN
shall provide the Seller copies of all information to be
included therein concerning the Seller and give the Seller an
opportunity to furnish corrections or other modifications to
such information; and
(i) upon the effectiveness of any
registration statement hereunder, deliver to Seller the
opinion of the General Counsel of ICN to the effect that the
registration statement has been declared effective and to the
best knowledge of such counsel no stop order suspending the
effectiveness of the registration statements has been issued
and no proceeding for that purpose is pending or threatened by
the Commission.
5.9 Indemnification.
---------------
(a) ICN will indemnify the Seller and any
other person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with, the Seller, with respect to which registration,
qualification or compliance has been effected pursuant to this
Section 5, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering
circular or other document (including any related registration
statement, notification or the like) incident to any such
registration, qualification or compliance, or based on 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, or any violation by ICN of
the Act or any rule or regulation thereunder applicable to ICN
and relating to action or inaction required of ICN in
connection with any such registration, qualification or
compliance, and will reimburse the Seller, and any other
person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with, the Seller, each such underwriter and each
person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with
investigating and defending any such claims, loss, damage,
liability or action, provided that ICN will not be liable in
any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished
to ICN by the Seller or any underwriter and stated to be
specifically for use therein.
(b) The Seller will, if Registrable
Securities held by it are included in the securities as to
which such registration, qualification or compliance is being
effected, indemnify ICN, each of its directors and officers
and each underwriter, if any, of ICN's securities covered by
such a registration statement, each person who controls ICN or
such underwriter within the meaning of the Act and the rules
and regulations thereunder, against all claims, losses,
damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other
document, or 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, and
will reimburse ICN and such directors, officers, partners,
persons, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to
the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written
information furnished to ICN by the Seller and stated to be
specifically for use therein; provided, however, that the
obligations of the Seller hereunder shall be limited to an
amount equal to the proceeds to the Seller of securities sold
as contemplated herein.
(c) Each party entitled to
indemnification under this Section 5.9 (the "Indemnified
Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom provided that counsel for
the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved
by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 4.
No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in
question as an Indemnifying Party may reasonably request in
writing and as shall be reasonably required in connection with
the defense of such claim and litigation resulting therefrom.
(d) If for any reason the foregoing
indemnity is unavailable, or is insufficient to hold harmless
an Indemnified Party under Section 5.9(a) or 5.9(b) above in
respect of any claim, then the Indemnifying Party shall
contribute to the amount paid or payable by the Indemnified
Party as a result of such claim in such proportion as is
appropriate to reflect the relative benefits received by, and
the relative fault of, the Indemnifying Party on the one hand
and the Indemnified Party on the other from such offering of
securities, as well as any other relevant equitable
considerations. The relative fault 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 Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable in
respect of any claim shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such claim.
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 provisions of this Section
5.9(d) shall be in addition to any other rights to
indemnification or contribution which any Indemnified Party
may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any
Indemnified Party and shall survive the transfer of the
Registrable Securities by any such party.
5.10 Information by the Seller. The Seller
shall furnish to ICN such information regarding the Seller and
the distribution proposed by the Seller as ICN may reasonably
request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance
referred to in this Section 5.
5.11 Rule 144 Reporting. With a view to making
available the benefits of certain rules and regulations of the
Commission which may permit the sale of the Restricted
Securities to the public without registration, ICN agrees to:
(a) Make and keep public information
available as those terms are understood and defined in Rule
144 under the Securities Act;
(b) Use its best efforts to file with the
Commission in a timely manner all reports and other documents
required to be filed by ICN under the Act and the Exchange
Act;
(c) So long as the Seller owns any
Restricted Securities, furnish to the Seller forthwith upon
request a written statement by ICN as to its compliance with
the current reporting requirements of Rule 144, and of the Act
and the Exchange Act, a copy of the most recent annual or
quarterly report of ICN and such other reports and documents
so filed as the Seller may reasonably request in availing
themselves of any rule or regulation of the Commission
allowing the Seller to sell any such securities without
registration.
5.12 Transfer or Assignment of Registration
Rights. The rights to cause ICN to register securities
granted to the Seller by ICN under Sections 5.5 and 5.6 may be
transferred or assigned by the Seller to a transferee or
assignee of the Seller's Restricted Securities; provided that
ICN is given notice at the time of such transfer or
assignment, stating the name and address of such transferee or
assignee and identifying the securities with respect to which
such registration rights are being transferred or assigned:
and provided, further, that the transferee or assignee of such
rights assumes the obligations of the Seller under this
Section 5. Such transferee or assignee shall be deemed a
Seller for purposes of this Section 5.
5.13 "Market Stand-Off" Agreement. The Seller
agrees, if requested by ICN and an underwriter of Common Stock
(or other securities) of ICN, not to sell or otherwise
transfer or dispose of any Common Stock (or other securities)
of ICN held by the Seller during the one hundred eighty (180)
day period following the effective date of a registration
statement of ICN filed under the Act not including Restricted
Securities, provided that (i) all Other Shareholders and
officers and directors of ICN enter into similar agreements,
and (ii) the two-year and three-year periods referred in
Sections 5.5(a) and 5.6(a) shall be deemed automatically
extended for each such one hundred eighty-day period, in the
case of any such agreements during the last year of such
periods. Such agreement shall be in writing in a form
satisfactory to ICN and such underwriter. ICN may impose
stop-transfer instructions with respect to the shares (or
securities) subject to the foregoing restriction until the end
of said one hundred eighty-day (180) day period. ICN
acknowledges and agrees that nothing in this Section 5.13
shall be deemed to restrict or prohibit the Seller's ability
to exercise the Seller's Put Option.
5.14 Seller's Right to Transfer. ICN agrees
and acknowledges that Seller is permitted to sell or otherwise
transfer any or all of the ICN Shares in compliance with the
terms of this Agreement. The Seller shall not be responsible
if any such sale or transfer directly or indirectly adversely
affects the market price of any securities of ICN.
6. Miscellaneous Provisions
------------------------
6.1 Amendment; Waiver. Neither this
Agreement, nor any of the terms or provisions hereof, may be
amended, modified, supplemented or waived, except by a written
instrument signed by the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof, nor shall
such waiver constitute a continuing waiver. No failure of
either party hereto to insist upon strict compliance by the
other party with any obligation, covenant, agreement or
condition contained in this Agreement shall operate as a
waiver of, or estoppel with respect to, any subsequent or
other failure.
6.2 Notices. (a) All notices and other
communications required or permitted under this Agreement
shall be in writing and mailed, faxed or delivered:
(i) If to the Seller, to:
Siemens Medical Systems, Inc.
186 Wood Avenue South
Iselin, New Jersey 08830
fax: 908-321-8909
Attention: Robert V. Dumke
David S. Machlowitz, Esq.
with a copy to:
Siemens Corporation
1301 Avenue of the Americas
New York, New York 10019
fax: 212-767-0582
Attention: Michael Schiefen
Walter G. Gans, Esq.
(ii) If ICN:
ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, California 92626
fax: 714-641-7206
Attention: General Counsel
(b) All notices that are addressed as provided
in this Section 6.2 (1) if delivered personally against proper
receipt or by confirmed fax shall be effective upon delivery
and (2) if delivered (A) by certified or registered mail with
postage prepaid or (B) by Federal Express or similar courier
service with courier fees paid by the sender shall be
effective three business days following the date when mailed
or couriered, as the case may be. Either party may from time
to time change its address for the purpose of notices to that
party by a similar notice specifying a new address, but no
such change shall be deemed to have been given until it is
actually received by the party sought to be charged with its
contents.
6.3 Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors
and permitted assigns. Neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by
the parties hereto without the prior written consent of the
other party; provided, however, that the Seller may, without
the consent of ICN, assign this Agreement to Siemens
Aktiengesellschaft or another direct or indirect wholly owned
subsidiary of Siemens Aktiengesellschaft. Any assignment that
contravenes this Section 6.3 shall be void ab initio.
6.4 Governing Law; Jurisdiction. This
Agreement and the agreements entered into in connection with
the transaction contemplated by this Agreement are made
subject to and shall be construed under the laws of the State
of New York without giving effect to the principles of
conflicts of law thereof. The parties agree that the state
and federal courts situated in New York County in the State of
New York shall have exclusive jurisdiction to resolve any
disputes with respect to this Agreement and the agreements
entered into in connection with the transaction contemplated
by this Agreement with each party irrevocably consenting to
the jurisdiction thereof for any actions, suits or proceedings
arising out of or relating to this Agreement and the
agreements entered into in connection with the transaction
contemplated by this Agreement. The parties hereto hereby
irrevocably waive consequential, punitive, special and
incidental damages. The parties hereto irrevocably waive
trial by jury. In the event of any breach of the provisions
of this Agreement and the agreements entered into in
connection with the transaction contemplated by this
Agreement, the parties shall be entitled to equitable relief,
including in the form of injunctions and orders for specific
performance or declaratory judgment, where the applicable
legal standards for such relief in such courts are met, in
addition to all other remedies available to the parties with
respect thereto at law or in equity. Notwithstanding anything
to the contrary herein or that may be based on facts or
circumstances pertaining to the transactions under discussion
between the parties hereto, this Agreement or otherwise, ICN
hereby irrevocably and unconditionally waives and releases for
itself and on behalf of its Affiliates all rights and claims
that it or they may now or hereafter have that Siemens
Corporation's parent, Siemens Aktiengesellschaft or any of its
Affiliates or subsidiaries organized outside of the United
States, are subject to the jurisdiction of the federal or
state courts of the United States with respect to this
Agreement or the subject matter of this Agreement; provided,
however, that nothing in such waiver and release shall affect
ICN'S and its Affiliates' rights, if any, to pursue any claim
whatsoever against Siemens Aktiengesellschaft or any of its
Affiliates or subsidiaries organized outside of the United
States in the courts of the Federal Republic of Germany.
6.5 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument.
6.6 Headings. The headings contained in this
Agreement are for convenience of reference only and shall not
constitute a part hereof or define, limit or otherwise affect
the meaning of any of the terms or provisions hereof.
6.7 Entire Agreement. This Agreement together
with the Purchase Agreement embodies the entire agreement and
understanding among the parties hereto with respect to the
subject matter of this Agreement and supersedes all prior
agreements, commitments, arrangements, negotiations or
understandings, whether oral or written, between the parties
with respect thereto. There are no agreements, covenants,
undertakings, representations or warranties with respect to
the subject matter of this Agreement other than those
expressly set forth or referred to herein.
6.8 Severability. Each term and provisions of
this Agreement constitutes a separate and distinct
undertaking, covenant, term or provision hereof. In the event
that any term or provision of this Agreement shall be
determined to be unenforceable, invalid or illegal in any
respect, such unenforceability, invalidity or illegality shall
not affect any other term or provision of this Agreement, but
this Agreement shall be construed as if such unenforceable,
invalid or illegal term or provision had never been contained
herein. Moreover, if any term or provision of this Agreement
shall for any reason be held to be excessively broad as to
time, duration, activity or subject, it shall be construed, by
limiting and reducing it, as to be enforceable to the extent
permitted under applicable law as it shall then exist.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement, as of the date first above written.
"ICN"
ICN PHARMACEUTICALS, INC.,
a Delaware corporation
By:
----------------------------------
Name:
--------------------------
Title:
--------------------------
SELLER"
SIEMENS MEDICAL SYSTEMS, INC.
a Delaware corporation
By:
----------------------------------
Name:
--------------------------
Title:
--------------------------
By:
----------------------------------
Name:
--------------------------
Title:
--------------------------
EXHIBIT 5
July 22 , 1996
ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, California 92626
RE: Registration Statement of Form S-3
ICN Pharmaceuticals, Inc.
1,198,107 Shares of Common Stock
Ladies and Gentlemen:
I am Executive Vice President, General Counsel and
Corporate Secretary of ICN Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and have been involved with the
registration under the Securities Act of 1933, as amended (the
"Act"), of an aggregate of 1,198,107 shares (the "Shares") of
common stock, $.01 par value of the Company, being offered
pursuant to the above described Registration Statement.
In connection with the offering of the Shares, I have
examined the Amended and Restated Certificate of Incorporation,
By-laws and other corporate records of the Company, and such
other documents I have deemed relevant to this opinion.
Based and relying solely upon the foregoing, it is my
opinion that the Shares have been duly authorized, validly issued
and fully paid and are nonassessable.
This opinion may be filed as an exhibit to the above
described Registration Statement. Consent is also given to the
reference to me under the caption "Legal Matters" in such
Registration Statement as having passed upon the validity of the
issuance of the Shares. In giving this consent, I do not hereby
admit that I come within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations
of the Securities and Exchange Commission promulgated thereunder.
Respectfully submitted,
/s/ David C. Watt
David C. Watt
Executive Vice President,
General Counsel and Corporate Secretary
Exhibit 15.1
Awareness Letter
July 21, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: ICN Pharmaceuticals, Inc.
Registration on Amendment No. 1
to Form S-3 (File No. 333-08179)
--------------------------------
We are aware that our report dated April 26, 1996, on our
review of interim financial information of ICN Pharmaceuticals,
Inc. for the period ended March 31, 1996 and included in the
Company's quarterly report on Form 10-Q for the quarter then
ended is incorporated by reference in this registration
statement. Pursuant to Rule 436(c) under the Securities Act of
1933, this report should not be considered a part of the
registration statement prepared or certified by us within the
meaning of Sections 7 and 11 of that Act.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Amendment No. 1 to Form S-3 (File No. 333-08179) of
our report, which includes, as it relates to 1994 and 1993, an
emphasis of matter paragraph related to certain transactions
between affiliates, dated February 19, 1996, appearing in the
Annual Report on Form 10-K of ICN Pharmaceuticals, Inc. for the
year ended December 31, 1995, on our audits of the consolidated
financial statements and financial statement schedule listed in
the index on page 24 of the Form 10-K. We also consent to the
reference to our firm under the caption "Independent Public
Accountants."
/s/ Coopers & Lybrand L.L.P
Coopers & Lybrand L.L.P.
Los Angeles, CA
July 21, 1996
