EXHIBIT 4.4
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FORM OF REGISTRATION RIGHTS AGREEMENT
by and between
ENDO PHARMACEUTICALS HOLDINGS INC.
and
ENDO PHARMA LLC
Dated as of ________ __, 2000
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TABLE OF CONTENTS
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Page
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1. Registrations Upon Request......................................................................... 1
1.1. Requests by Endo LLC........................................................................... 1
1.2. Registration Statement Form.................................................................... 2
1.3. Expenses....................................................................................... 2
1.4. Priority in Demand Registrations............................................................... 2
1.5. No Company Initiated Registration.............................................................. 3
2. Incidental Registrations........................................................................... 3
3. Registration Procedures............................................................................ 5
4. Underwritten Offerings............................................................................. 9
4.1. Underwriting Agreement......................................................................... 9
4.2. Selection of Underwriters...................................................................... 9
5. Holdback Agreements................................................................................ 10
6. Preparation; Reasonable Investigation.............................................................. 11
7. No Grant of Future Registration Rights............................................................. 11
8. Indemnification.................................................................................... 11
8.1. Indemnification by the Company................................................................. 11
8.2. Indemnification by the Sellers................................................................. 12
8.3. Notices of Claims, etc......................................................................... 13
8.4. Other Indemnification.......................................................................... 13
8.5. Indemnification Payments....................................................................... 14
8.6. Other Remedies................................................................................. 14
9. Representations and Warranties..................................................................... 14
10. Definitions....................................................................................... 15
11. Miscellaneous..................................................................................... 16
11.1. Rule 144, etc................................................................................. 16
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11.2. Successors, Assigns and Transferees........................................................... 16
11.3. Stock Splits.................................................................................. 17
11.4. Amendment and Modification.................................................................... 17
11.5. Governing Law................................................................................. 17
11.6. Invalidity of Provision....................................................................... 17
11.7. Notices....................................................................................... 17
11.8. Headings; Execution in Counterparts........................................................... 18
11.9. Injunctive Relief............................................................................. 18
11.10. Term......................................................................................... 19
11.11. Further Assurances........................................................................... 19
11.12. Entire Agreement............................................................................. 19
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FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of ________ __, 2000, by and
among Endo Pharmaceuticals Holdings Inc., a Delaware corporation (the
"Company"), and Endo Pharma LLC, a Delaware limited liability company ("Endo
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LLC"). Capitalized terms used herein without definition are defined in Section
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10 hereof.
WHEREAS, Endo LLC owns shares of Common Stock;
WHEREAS, the parties hereto wish to set forth certain rights and
obligations with respect to the registration of the shares of Common Stock under
the Securities Act.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, the parties hereto agree as follows:
1. Registrations Upon Request.
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1.1 Requests by Endo LLC. At any time, Endo LLC shall have the right
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to make up to six (6) separate requests that the Company effect the registration
under the Securities Act of all or a portion of the Registrable Securities owned
by Endo LLC, each such request to specify the intended method or methods of
disposition thereof; provided that the Company shall not be required to effect a
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registration pursuant to this Section 1.1 until a period of 180 days shall have
elapsed from the effective date of the most recent registration previously
effected pursuant to this Section 1.1. A request made by Endo LLC shall not be
counted for purposes of the request limitations set forth above (a) if Endo LLC
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determines in its good faith judgment to withdraw the proposed registration of
any Registrable Securities requested to be registered pursuant to this Section
1.1 due to marketing or regulatory reasons, (b) the registration statement
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relating to any such request is not declared effective within 90 days of the
date such registration statement is first filed with the Commission, (c) if,
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within 180 days after the registration relating to any such request has become
effective, such registration is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason and the Company fails to have such stop order, injunction
or other order or requirement removed, withdrawn or resolved to Endo LLC's
reasonable satisfaction within 30 days or (d) the conditions to closing
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specified in the underwriting agreement or purchase agreement entered into in
connection with the registration relating to any such request are not satisfied
(other than as a result of a default or breach thereunder by Endo LLC). Upon
any such request, the Company will promptly, but in any event within 15 days,
give written notice of such request to all holders of Registrable Securities and
thereupon
the Company will, subject to Section 1.4 hereof, use its best efforts to effect
the prompt registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so requested to
register by Endo LLC, and
(ii) all other Registrable Securities which the Company has been
requested to register by the holders thereof by written request given to
the Company by such holders within 15 days after the giving of such written
notice by the Company to such holders,
all to the extent required to permit the disposition of the Registrable
Securities so to be registered in accordance with the intended method or methods
of disposition of each seller of such Registrable Securities.
1.2 Registration Statement Form. A registration requested pursuant
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to Section 1.1 hereof shall be effected by the filing of a registration
statement on a form agreed to by Endo LLC.
1.3 Expenses. The Company will pay all Registration Expenses in
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connection with any registration requested under Section 1.1 hereof and any
other actions that may be taken in connection with any such registration as
contemplated by this Article I; provided, however, that the Company will not be
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obligated to pay underwriting discounts or commissions or transfer taxes, if
any, relating to the sale or disposition of shares sold pursuant to any such
registration.
1.4 Priority in Demand Registrations. If a registration pursuant to
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Section 1.1 hereof involves an underwritten offering, and the managing
underwriter (or, in the case of an offering which is not underwritten, a
nationally recognized investment banking firm) shall advise the Company in
writing (with a copy to Endo LLC) that, in its opinion, the number of securities
requested and otherwise proposed to be included in such registration exceeds the
number which can be sold in such offering without materially and adversely
affecting the offering price, the Company will include in such registration the
number which the Company is so advised can be sold in such offering without such
material adverse effect, first, the Registrable Securities of Endo LLC and up to
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the full number of shares of Common Stock requested to be included in such
registration by the Management Stockholders (as defined in that certain amended
and restated stockholders agreement, dated as of ______ __, 2000, by and among
the Company, Endo LLC, and the other parties named therein (the "Stockholders
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Agreement"), allocated pro rata among Endo LLC and the Management Stockholders
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on the basis of the number of shares of Common Stock requested to be included
there in by Endo LLC and the Management Stockholders and second, the
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securities, if any, being sold by the Company. Notwithstanding the foregoing,
the Management
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Stockholders (and any successor managers of the Company and its subsidiaries)
will not be entitled to participate in any such registration requested by Endo
LLC to the extent that the managing underwriter (or, in the case of an offering
that is not underwritten, a nationally recognized investment banking firm) shall
determine in good faith and in writing, that the participation of management
would adversely affect the marketability or offering price of the securities
being sold in such registration, it being understood that the Company will
include in such registration that number of shares of the Management
Stockholders which can be sold in such offering without adversely affecting the
marketability or offering price of the other securities to be sold in such
registration. Neither the Company nor Endo LLC will be required to give any
notice to any holder of Registrable Securities with respect to a given offering
if such holder is to be excluded from such offering pursuant to this Section
1.4.
1.5 No Company Initiated Registration. After receipt of notice of a
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requested registration pursuant to Section 1.1 hereof, the Company shall not
initiate, without the consent of Endo LLC, a registration of any of its
securities for its own account until 90 days after such registration has been
terminated or declared effective (unless advised by the managing underwriter
that a longer period, not to exceed 180 days, is required, or such shorter
period as the managing underwriter for any underwritten offering may agree),
except as provided in Section 5(b) hereof.
2. Incidental Registrations. If the Company proposes to register
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any of its Common Stock or any other of its common equity securities
(collectively, "Other Securities") under the Securities Act (other than a
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registration on Form S-4 or S-8 or a successor form), whether or not for sale
for its own account, in a manner which would permit registration of shares of
Common Stock owned by Endo LLC or any of its Permitted Transferees (as defined
in Section 13.2 hereof) (each, a "Holder") for sale for cash to the public under
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the Securities Act, it will at such time give prompt written notice to each
Holder of its intention to do so and of the rights of such Holder under this
Section 2, at least 20 days prior to the anticipated filing date of the
registration statement relating to such registration. Such notice shall offer
each such Holder the opportunity to include in such registration statement such
number of shares of Common Stock as such Holder may request, in accordance with
this Section 2. Upon the written request of a Holder made within 10 days after
the receipt of the Company's notice (which request shall specify the number of
shares of Common Stock intended to be disposed of and the intended method of
disposition thereof), the Company will use its best efforts to effect, in
connection with the registration of the Other Securities, the registration under
the Securities Act of all shares of Common Stock which the Company has been so
requested to register, to the extent required to permit the disposition (in
accordance with such intended methods of disposition) of such shares of Common
Stock so requested to be registered; provided that:
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(a) if, at any time after giving such written notice of its intention
to register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register the Other Securities, the Company
may, at its election, give written notice of such determination to the Holders,
and thereupon the Company shall be relieved of its obligation to register the
shares of Common Stock requested to be registered in connection with the
registration of such Other Securities;
(b) if the registration referred to in the first sentence of Section
2(a) hereof is to be an underwritten registration on behalf of the Company, and
the managing underwriter(s) advises the Company in writing that, in such firm's
opinion, such offering would be materially and adversely affected by the
inclusion therein of any of the Common Stock requested to be included therein,
the Company shall include in such registration: (i) first, all securities the
Company proposes to sell for its own account ("Company Securities"), (ii)
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second, up to the full number of shares of Common Stock requested to be included
in such registration by Endo LLC, which, in the good faith opinion of such firm,
can be so sold without so materially and adversely af fecting such offering and
(iii) third, an amount of other securities, if any, requested to be included
therein in excess of the number or dollar amount of Company Securi ties and
Common Stock of the Holders which, in the opinion of such firm, can be so sold
without materially and adversely affecting such offering (allocated among the
holders of such other securities in such proportions as such holders and the
Company may agree);
(c) the Company shall not be required to effect any registration of
Common Stock under this Section 2 incidental to the registration of any of its
securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans; and
(d) no registration of Common Stock effected under this Section 2
shall relieve the Company of its obligation to effect a registration of shares
of Common Stock pursuant to Section 1.1 hereof and pursuant to the Stockholders
Agreement.
Notwithstanding the foregoing, a Holder will not be entitled to
participate in any registration pursuant to this Section 2 to the extent that
the managing underwriter (or, in the case of an offering that is not
underwritten, a nationally recognized investment banker) shall determine in good
faith and in writing (with a copy to each affected Person requesting
registration of Registrable Securities) that the participation of any such
Holder would adversely affect the offering or the marketability or offering
price of the securities being sold by the Company in such registration.
The Company will pay all Registration Expenses in connection with any
registration requested under this Section 2 and any other actions that may be
taken in
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connection with any such registration as contemplated by this Section 2;
provided, however, that the Company will not be obligated to pay underwriting
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discounts or commissions or transfer taxes, if any, relating to the sale or
disposition of shares sold pursuant to any such registration.
3. Registration Procedures. If and whenever the Company is required
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to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 1.1 and 2 hereof, the Company
will promptly:
(a) prepare, and as soon as practicable, but in any event within 60
days thereafter, file with the Commission, a registration statement with
respect to such Registrable Securities, make all required filings with the
NASD and use its best efforts to cause such registration statement to
become effective as soon as practicable;
(b) prepare and promptly file with the Commission such amendments and
post-effective amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep
such registration statement effective for so long as is required to comply
with the provisions of the Securities Act and to complete the disposition
of all securities covered by such registration statement in accordance with
the intended method or methods of disposition thereof, but in no event for
a period of more than six months after such registration statement becomes
effective;
(c) furnish copies of all documents proposed to be filed with the
Commission in connection with such registration to (i) counsel selected by
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Endo LLC and (ii) each seller of Registrable Securities (or in the case of
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the initial filing of a registration statement, within five business days
of such initial filing) and such documents shall be subject to the review
of such counsel and the Company shall not file any registration statement
or any amendment or post-effective amendment or supplement to such
registration statement or the prospectus used in connection therewith to
which either such counsel or Endo LLC shall have reasonably objected in
writing on the grounds that such amendment or supplement does not comply
(explaining why) in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder;
(d) furnish to each seller of Registrable Securities, without charge,
such number of conformed copies of such registration statement and of each
such amendment and supplement thereto (in each case including all exhibits
and documents filed therewith) and such number of copies of the prospectus
included in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under
Rule 424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, as such seller may reasonably
request in order to fa-
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cilitate the disposition of the Registrable Securities owned by such seller
in accordance with the intended method or methods of disposition thereof;
(e) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under the securities or
blue sky laws of such jurisdictions as each seller shall reasonably
request, and do any and all other acts and things which may be necessary or
advisable to enable such seller to consummate the disposition of such
Registrable Securities in such jurisdictions in accordance with the
intended method or methods of disposition thereof; provided that the
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Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it is not
so qualified, subject itself to taxation in any jurisdiction wherein it is
not so subject, or take any action which would subject it to general
service of process in any jurisdiction wherein it is not so subject;
(f) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies, authorities or self-regulatory bodies as may
be necessary by virtue of the business and operations of the Company to
enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities in accordance with the intended method or methods of
disposition thereof;
(g) furnish to Endo LLC:
(i) an opinion of counsel for the Company experienced in
securities law matters, dated the effective date of the registration
statement (and, if such registration includes an underwriter
agreement), and
(ii) a "comfort" letter (unless the registration is pursuant to
Section 2 and such a letter is not otherwise being furnished to the
Company), dated the effective date of such registration statement (and
if such registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement), signed by
the independent public accountants who have issued an audit report on
the Company's financial statements included in the registration
statement; provided that such comfort letter shall be delivered only
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to Endo LLC which represents to such accountants in a form
satisfactory to such accountants that Endo LLC is an underwriter or
has performed the due diligence customarily performed by an
underwriter,
covering such matters as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public
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offerings of securities and such other matters as Endo LLC may reasonably
request;
(h) notify each seller of any Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event or existence of any fact as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and, as promptly
as is practicable, prepare and furnish to such seller a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing;
(i) otherwise 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 of the Company (in form
complying with the provisions of Rule 158 under the Securities Act)
covering the period of at least 12 months, but not more than 18 months,
beginning with the first month after the effective date of such
registration statement;
(j) notify each seller of any Registrable Securities covered by such
registration statement (i) when the prospectus or any prospectus supplement
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or post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the Commission for amendments or
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supplements to such registration statement or to amend or to supplement
such prospectus or for additional information, (iii) of the issuance by the
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Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceedings for that
purpose and (iv) of the suspension of the qualification of such securities
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for offering or sale in any jurisdiction, or of the institution of any
proceedings for any of such purposes;
(k) use every reasonable effort to obtain the lifting of any stop
order that might be issued suspending the effectiveness of such
registration state ment at the earliest possible moment;
(l) use its best efforts (i) (A) to list such Registrable Securities
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on any securities exchange on which the equity securities of the Company
are then listed or, if no such equity securities are then listed, on an
exchange selected by
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the Company, if such listing is then permitted under the rules of such
exchange, or (B) if such listing is not practicable, to secure designation
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of such securities as a NASDAQ "national market system security" within the
meaning of Rule 11Aa2-1 under the Exchange Act or, failing that, to secure
NASDAQ authorization for such Registrable Securities, and, without limiting
the foregoing, to arrange for at least two market makers to register as
such with respect to such Registrable Securities with the NASD, and (ii) to
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provide a transfer agent and registrar for such Registrable Securities not
later than the effective date of such registration statement and to
instruct such transfer agent (A) to release any stop transfer order with
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respect to the certificates with respect to the Registrable Securities
being sold and (B) to furnish certificates without restrictive legends
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representing ownership of the shares being sold, in such denominations
requested by the sellers of the Registrable Securities or the lead
underwriter;
(m) enter into such agreements and take such other actions as the
sellers of Registrable Securities or the underwriters reasonably request in
order to expedite or facilitate the disposition of such Registrable
Securities, including, without limitation, preparing for, and participating
in, such number of "road shows" and all such other customary selling
efforts as the underwriters reasonably request in order to expedite or
facilitate such disposition;
(n) furnish to any holder of such Registrable Securities such
information and assistance as such holder may reasonably request in
connection with any "due diligence" effort which such seller deems
appropriate; and
(o) use its best efforts to take all other steps necessary to effect
the registration of such Registrable Securities contemplated hereby.
As a condition to its registration of Registrable Securities of any
prospective seller, the Company may require such seller of any Registrable
Securities as to which any registration is being effected to execute powers-of-
attorney, custody arrangements and other customary agreements appropriate to
facilitate the offering and to furnish to the Company such information regarding
such seller, its ownership of Registrable Securities and the disposition of such
Registrable Securities as the Company may from time to time reasonably request
in writing and as shall be required by law in connection therewith. Each such
holder agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such holder not materially misleading.
The Company agrees not to file or make any amendment to any
registration statement with respect to any Registrable Securities, or any
amendment of or supplement to the prospectus used in connection therewith, which
refers to (in a capacity as a selling stockholder) any seller of any Registrable
Securities covered
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thereby by name, or otherwise identifies such seller as the holder of any
Registrable Securities, to which counsel to the sellers may reasonably object.
By acquisition of Registrable Securities, each holder of such
Registrable Securities shall be deemed to have agreed that upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3(h) hereof, such holder will promptly discontinue such holder's
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(h) hereof.
If so directed by the Company, each holder of Registrable Securities will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, in such holder's possession of the prospectus covering
such Registrable Securities at the time of receipt of such notice. In the event
that the Company shall give any such notice, the period mentioned in Section
3(b) hereof shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of any Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by Section 3(h) hereof.
4. Underwritten Offerings.
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4.1 Underwriting Agreement. If requested by the underwriters for any
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underwritten offering pursuant to a registration requested under Sections 1.1 or
2 hereof, the Company shall enter into an underwriting agreement with the under
writers for such offering, such agreement to be reasonably satisfactory in
substance and form to the underwriters and to Endo LLC. Any such underwriting
agreement shall contain such representations and warranties by the Company and
such other terms and provisions as are customarily contained in agreements of
this type, in cluding, without limitation, indemnities to the effect and to the
extent provided in Section 9 hereof. The holders of a majority of the
Registrable Securities to be distributed by such underwriter shall be parties
to such underwriting agreement and may, at their option, require that any or all
of the representations and warranties by, and the agreements on the part of, the
Company to and for the benefit of such underwriters be made to and for the
benefit of such holders of Registrable Securities and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement shall also be conditions precedent to the obligations of
such holders of Registrable Securities. No underwriting agree ment (or other
agreement in connection with such offering) shall require Endo LLC , in their
respective capacities as stockholders and/or controlling persons, to make any
representations or warranties to or agreements with the Company or the under
writers other than representations, warranties or agreements regarding such
holder, the ownership of such holder's Registrable Securities and such holder's
in tended method or methods of disposition and any other representation
required by law or to furnish any indemnity to any Person which is broader than
the indemnity furnished by such holder pursuant to Section 9.2 hereof.
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4.2 Selection of Underwriters. If the Company at any time proposes
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to register any of its securities under the Securities Act for sale for its own
account pursuant to an underwritten offering, the Company will have the right to
select the managing underwriter (which shall be of nationally recognized
standing) to administer the offering, but if Endo LLC at such time own at least
[___]% of the number of shares of Common Stock they own on the date hereof, only
with the approval of Endo LLC, such approval not to be unreasonably withheld.
Notwithstanding the foregoing sentence, whenever a registration requested
pursuant to Section 1.1 hereof is for an underwritten offering, Endo LLC will
have the right to select the managing underwriter (which shall be of nationally
recognized standing) to administer the offering, but only with the approval of
the Company, such approval not to be unreasonably withheld.
5. Holdback Agreements. (a) If and whenever the Company proposes to
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register any of its equity securities under the Securities Act for its own
account (other than on Form S-4 or S-8 or any successor form) or is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act pursuant to Sections 1.1 or 2, each holder of
Registrable Securities agrees by acquisition of such Registrable Securities
not to effect any sale or distribution, including any sale pursuant to Rule 144
under the Securities Act, or to request registration under Section 1.1 of any
Registrable Securities within seven days prior to and 90 days (unless advised by
the managing underwriter that a longer period, not to exceed 180 days, is
required, or such shorter period as the managing underwriter for any under
written offering may agree) after the effective date of the registration
statement relating to such registration, except as part of such registration or
unless, in the case of a private sale of distribution, the transferee agrees in
writing to be subject to this Section 5. If requested by such managing
underwriter, each holder of Registrable Securities agrees to execute a holdback
agreement, in customary form, consistent with the terms of this Section 5(a).
(b) The Company agrees not to effect any public sale or distribution
of its equity securities or securities convertible into or exchangeable or
exercisable for any of such securities within seven days prior to and 90 days
(unless advised in writing by the managing underwriter that a longer period, not
to exceed 180 days, is required, or such shorter period as the managing
underwriter for any underwritten offering may agree) after the effective date of
any registration statement filed pursuant to Section 1.1 (except (i) as part of
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such registration, (ii) as permitted by the related underwriting, (iii) pursuant
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to an employee equity compensation plan, (iv) pursuant to an acquisition or
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strategic relationship, bank or equipment financing or similar transaction or
(v) pursuant to a registration on Form S-4 or S-8 or any successor form). In
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addition, upon the request of the managing underwriter, the Company shall use
its best efforts to cause each holder of its equity securities or any securities
convertible into or exchangeable or exercisable for any of such securities,
whether outstanding on the date of this Agreement or issued at any time after
the date of this Agreement (other than any such securities acquired in a public
offering), to agree not to effect any such public sale or distribution of such
securities during such period, except as part of any such regis-
10
tration if permitted, and to cause each such holder to enter into a similar
agreement to such effect with the Company.
6. Preparation; Reasonable Investigation. In connection with the
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preparation and filing of each registration statement registering Registrable
Securities under the Securities Act, the Company will give counsel to the
holders of such Registrable Securities so to be registered the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to the financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries and such opportunities to discuss the business of the Company
with its officers and the inde pendent public accountants who have issued audit
reports on its financial statements as shall be reasonably requested by such
holders in connection with such registration statement.
7. No Grant of Future Registration Rights. The Company shall not
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grant any other demand or incidental registration rights to any other Person
without the prior written consent of Endo LLC, so long as Endo LLC continues to
own at least 15% of the number of shares of Common Stock that Endo LLC owns on
the date hereof. During the term of this Agreement, the Company shall not grant
to any third party incidental registration rights that are of a higher priority
to the rights granted to the holders of Registrable Securities under Section 2
hereof.
8. Indemnification.
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8.1 Indemnification by the Company. In the event of any registration
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of any Registrable Securities pursuant to this Agreement, the Company will
indemnify, defend and hold harmless (a) each seller of such Registrable
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Securities, (b) the di rectors, members, stockholders, officers, partners,
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employees, agents and Affiliates of such seller, (c) each Person who
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participates as an underwriter in the offering or sale of such securities and
(d) each person, if any, who controls (within the meaning of Section 15 of the
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Securities Act or Section 20 of the Exchange Act) any of the foregoing against
any and all losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), jointly or severally, directly or indirectly, based upon or
arising out of (i) any untrue statement or alleged untrue statement of a fact
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contained in any registration statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein or used in connection with
the offering of securities covered thereby, or any amendment or supplement
thereto, or (ii) any omission or alleged omission to state a fact required to
--
be stated therein or necessary to make the statements therein not misleading;
and the Company will reimburse each such indemnified party for any legal or any
other expenses reasonably incurred by them in connection with enforcing its
rights hereunder or under the underwriting agreement entered into in connection
with such offering or investigating, preparing, pursuing or defending any such
loss, claim,
11
damage, liability, action or proceeding, except insofar as any such loss, claim,
damage, liability, action, proceeding or expense arises out of or is based upon
an untrue statement or omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such seller expressly for use in the preparation thereof. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by such indemnified party and shall survive the transfer of such
Registrable Securities by such seller. If the Company is entitled to, and does,
assume the defense of the related action or proceedings provided herein, then
the indemnity agreement contained in this Section 8.1 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, action or
proceeding if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld or delayed).
8.2 Indemnification by the Sellers. The Company may require, as a
------------------------------
condition to including any Registrable Securities in any registration statement
filed pursuant to Sections 1.1 or 2 that the Company shall have received an
undertaking satisfactory to it from each of the prospective sellers of such
Registrable Securities to indemnify and hold harmless, severally, not jointly,
in the same manner and to the same extent as set forth in Section 8.1 hereof,
the Company, its directors, officers, employees, agents and each person, if any,
who controls (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) the Company with re spect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such seller
expressly for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement.
(The Company and the holders of the Registrable Securities hereby acknowledge
and agree that, unless otherwise expressly agreed to in writing by such holders,
the only information furnished or to be furnished to the Company for use in any
registration statement or prospectus relating to the Registrable Securities or
in any amendment, supplement or preliminary materials associated therewith are
statements specifically relating to (a) transactions between such holder and its
-
Affiliates, on the one hand, and the Company, on the other hand, (b) the
-
beneficial ownership of shares of Common Stock by such holder and its Affiliates
and (c) the name and address of such holder. If any additional information
-
about such holder or the plan of distribution (other than for an underwritten
offering) is required by law to be disclosed in any such document, then such
holder shall not unreasonably withhold its agreement referred to in the
immediately preceding sentence of this Section 8.2.) Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer or controlling Person and
shall survive the transfer of such Registrable
12
Securities by such seller. The indemnity agreement contained in this Section 8.2
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, action or proceeding if such settlement is effected without the
consent of such seller (which consent shall not be unreason ably withheld or
delayed). The indemnity provided by each seller of Registrable Securities under
this Section 8.2 shall be limited in amount to the net amount of proceeds
actually received by such seller from the sale of Registrable Securities
pursuant to such registration statement.
8.3 Notices of Claims, etc. Promptly after receipt by an indemnified
----------------------
party of notice of the commencement of any action or proceeding involving a
claim re ferred to in the preceding paragraphs of this Section 8, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the indemnifying party of the
commencement of such action or proceeding; provided that the failure of any
-------- ----
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 8, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate therein and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reason ably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof except for the reasonable fees and
expenses of any counsel retained by such indemnified party to monitor such
action or proceeding. Notwithstanding the foregoing, if such indemnified party
reasonably determines, based upon advice of independent counsel, that a conflict
of interest may exist between the indemnified party and the indemnifying party
with respect to such action and that it is advisable for such indemnified party
to be represented by separate counsel, such indemnified party may retain other
counsel, reasonably satisfactory to the indemnifying party, to represent such
indemnified party, and the indemnifying party shall pay all reasonable fees and
expenses of such counsel. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of such indemnified party,
which consent shall not be unreasonably withheld, 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 of such claim or litigation.
8.4 Other Indemnification. Indemnification similar to that specified
---------------------
in the preceding paragraphs of this Section 8 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration (other than under the Securities Act) or
other qualification of such
13
Registrable Securities under any federal or state law or regulation of any
governmental authority.
8.5. Indemnification Payments. Any indemnification required to be made
------------------------
by an indemnifying party pursuant to this Section 8 shall be made by periodic
payments to the indemnified party during the course of the action or proceeding,
as and when bills are received by such indemnifying party with respect to an
indemnifiable loss, claim, damage, liability or expense incurred by such
indemnified party.
8.6. Other Remedies. If for any reason the foregoing indemnity is
--------------
unavailable, or is insufficient to hold harmless an indemnified party, other
than by reason of the exceptions provided therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities, actions, proceedings or
expenses in such proportion as is appropriate to reflect the relative benefits
to and faults of the indemnifying party on the one hand and the indemnified
party on the other in connection with the offering of Registrable Securities
(taking into account the portion of the proceeds of the offering realized by
each such party) and the statements or omissions or alleged statements or
omissions which resulted in such loss, claim, damage, liability, action,
proceeding or expense, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue statement
of a material fact or the 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 statements or omissions. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. No party shall be liable for
contribution under this Section 8.6 except to the extent and under such
circumstances as such party would have been liable to indemnify under this Sec
tion 8 if such indemnification were enforceable under applicable law.
9. Representations and Warranties. Endo LLC represents and warrants
------------------------------
to the Company that:
(i) Endo LLC has all limited liability company power and to execute,
deliver and perform this Agreement;
(ii) the execution, delivery and performance of this Agreement
by Endo LLC has been duly and validly authorized and approved by all necessary
limited liability company action;
14
(iii) this Agreement has been duly and validly executed and delivered
by Endo LLC and constitutes a valid and legally binding obligation of Endo LLC,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
creditors' rights generally and general principles of equity; and
(iv) the execution, delivery and performance of this Agreement by
Endo LLC does not and will not violate the terms of or result in the
acceleration of any obligation under (A) any material contract, commitment or
-
other material instrument to which Endo LLC is a party or by which Endo LLC is
bound and (B) the limited liability company agreement of Endo LLC.
-
10. Definitions. For purposes of this Agreement, the following terms
-----------
shall have the following respective meanings:
Affiliate: a Person that directly, or indirectly through one or more
---------
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
Board: the board of directors of the Company.
-----
Commission: the Securities and Exchange Commission.
----------
Common Stock: the common stock of the Company, par value $.01 per
------------
share.
Exchange Act: the Securities Exchange Act of 1934, as amended, or any
------------
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the time.
NASD: National Association of Securities Dealers, Inc.
----
NASDAQ: the Nasdaq National Market.
------
Permitted Transferee: as defined in Section 11.2 hereof.
--------------------
Person: an individual, corporation, partnership, limited liability
------
company, joint venture, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
Registrable Securities: the shares of Common Stock beneficially owned
----------------------
(within the meaning of Rule 13d-3 of the Exchange Act) by Endo LLC or the
Permitted Transferees. As to any particular shares of Common Stock, such
securities shall cease
15
to be Registrable Securities when (i) a registration statement with respect to
-
the sale of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance with such
registration statement, (ii) a registration statement on Form S-8 with respect
--
to the sale of such securities shall have become effective under the Securities
Act, (iii) they shall have been sold to the public pursuant to Rule 144 under
---
the Securities Act, (iv) they shall have been otherwise transferred other than
--
to a Permitted Transferee and subsequent disposition of them shall not require
registration or qualification of them under the Securities Act or any similar
state law then in force or (v) they shall have ceased to be outstanding.
-
Registration Expenses: all expenses incident to the Company's
---------------------
performance of or compliance with any registration pursuant to this Agreement,
including, without limitation, (i) registration, filing and NASD fees, (ii) fees
- --
and expenses of complying with securities or blue sky laws, (iii) fees and
---
expenses associated with listing securities on an exchange or NASDAQ, (iv) word
--
processing, duplicating and printing expenses, (v) messenger and delivery
-
expenses, (vi) transfer agents', trustees', depositories', registrars' and
--
fiscal agents' fees, (vii) fees and disbursements of counsel for the Company and
---
of its independent public accountants, including the expenses of any special
audits or "cold comfort" letters, (viii) reasonable fees and disbursements of
----
any one counsel retained by the sellers of Registrable Securities, which counsel
shall be designated in the manner specified in Section 3 hereof and (ix) any
--
fees and disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any.
Securities Act: the Securities Act of 1933 or any successor federal
--------------
statute, and the rules and regulations thereunder which shall be in effect at
the time.
11. Miscellaneous.
-------------
11.1. Rule 144, etc. If the Company shall have filed a registration
--------------
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act
relating to any class of equity securities, the Company will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
-
as such rule may be amended from time to time, or (b) any successor rule or
-
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
16
11.2. Successors, Assigns and Transferees. This Agreement shall be
-----------------------------------
binding upon and insure to the benefit of the parties hereto and their
respective successors and permitted assigns under this Section 11.2. Provided
that an express assignment shall have been made, and the assignee has executed a
joinder agreement agreeing to be bound by all of the assignor's obligations
hereunder, including, without limitation, Section 5 hereof, copies of which
shall have been delivered to the Company, the provisions of this Agreement which
are for the benefit of a holder of Registrable Securities shall be for the
benefit of and enforceable by any subsequent holder of any Registrable
Securities; provided that such transferee is a holder of Registrable Securities
-------- ----
in accordance with the terms of the Stockholders Agreement ("Permitted
---------
Transferees").
-----------
11.3. Stock Splits. Each holder of Registrable Securities agrees that
------------
it will vote to effect a stock split, reverse stock split, recapitalization or
combination with respect to any Registrable Securities in connection with any
registration of any Registrable Securities hereunder, or otherwise, if the
managing underwriter shall advise the Company in writing (or, in connection with
an offering that is not underwritten, if an investment banker shall advise the
Company in writing) that in its opinion such a stock split, reverse stock split,
recapitalization or combination would facilitate or increase the likelihood of
success of the offering. The Company shall cooperate in all respects in
effecting any such stock split, reverse stock split, recapitalization or
combination.
11.4. Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented by the Company with the written consent of Endo LLC and
a majority (by number of shares) of any other holders of Registrable Securities
whose interests would be adversely affected by such amendment.
11.5. Governing Law. This Agreement and the rights and obligations of
-------------
the parties hereunder and the persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of Delaware,
without giving effect to the choice of law principles thereof.
11.6. Invalidity of Provision. The invalidity or unenforceability of
-----------------------
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
11.7. Notices. All notices, requests, demands, letters, waivers and
-------
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a) delivered
-
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
- -
sent by next-day or overnight mail or delivery or (d) sent by fax, as follows:
-
17
(i) If to the Company, to it at:
Endo Pharmaceuticals Holdings Inc.
000 Xxxxxxxxxx-Xxxx Xxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxx
President and Chief Executive Officer
with a copy to Endo LLC at its address set forth in (iv) below.
(iv) If to Endo LLC, to it at:
Endo Pharma LLC
c/o Kelso & Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: Xxxxx X. Xxxxxxx, XX, Esq.
General Counsel
or to such other person or address as any party shall specify by notice in
writing to the Company. All such notices, requests, demands, letters, waivers
and other communications shall be deemed to have been received (w) if by
-
personal delivery on the day after such delivery, (x) if by certified or
-
registered mail, on the fifth business day after the mailing thereof, (y) if by
-
next-day or overnight mail or delivery, on the day delivered or (z) if by fax,
-
on the next day following the day on which such fax was sent, provided that a
copy is also sent by certified or registered mail.
11.8. Headings; Execution in Counterparts. The headings and captions
-----------------------------------
contained herein are for convenience and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
11.9. Injunctive Relief. Each of the parties recognizes and agrees
-----------------
that money damages may be insufficient and, therefore, in the event of a breach
of any provision of this Agreement the aggrieved party may elect to institute
and prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach of this Agreement. Such
remedies shall, however, be cumulative and not exclusive, and shall be in
addition to any other remedy which such party may have.
18
11.10. Term. This Agreement shall be effective as of the date hereof
----
and shall continue in effect thereafter until the earlier of (a) its termination
-
by the consent of the parties hereto or their respective successors in interest
and (b) the date on which no Registrable Securities remain outstanding.
-
11.11. Further Assurances. Subject to the specific terms of this
------------------
Agreement, each of the Company and Endo LLC shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions,
as may be reasonably required in order to effectuate the purposes of this
Agreement and to consummate the transactions contemplated hereby.
11.12. Entire Agreement. This Agreement, together with the
----------------
Stockholders Agreement and the Exchange Agreements (as defined in the
Stockholders Agreement), is intended by the parties hereto as a final expression
of their agreement and intended to be a complete and exclusive statement of
their agreement and understanding in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
[SIGNATURES FOLLOW]
19
IN WITNESS WHEREOF this Agreement has been signed by each of the
parties hereto, and shall be effective as of the date first above written.
ENDO PHARMACEUTICALS HOLDINGS INC.
By:___________________________________________
Name: Xxxxx X. Xxxxx
Title: President & Chief Executive Officer
ENDO PHARMA LLC
By:___________________________________________
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
20
