Exhibit 1.1
Endo Pharmaceuticals Holdings Inc.
8,000,000 Shares
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
November 22, 2004
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The persons named in Schedule I hereto (the "Selling Stockholders"),
propose to sell to Bear, Xxxxxxx & Co. Inc. (the "Underwriter"), 8,000,000
shares of Common Stock, $.01 par value ("Common Stock") of Endo Pharmaceuticals
Holdings Inc., a corporation organized under the laws of Delaware (the
"Company"), (said shares to be sold by the Selling Stockholders being
hereinafter called the "Securities"). The Securities include shares of Common
Stock (collectively, the "Stock Option Shares") to be acquired by certain
Selling Stockholders identified in Schedule I hereto (the "Stock Option Selling
Stockholders") upon exercise of currently outstanding options to purchase Common
Stock granted under the Endo Pharma LLC Stock Option Plans (as defined in the
Registration Statement).
Any reference herein to the Registration Statement or the Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statement or the issue date
of the Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration
Statement, or the issue date of the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
16 hereof.
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1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, the
Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a Registration Statement
(file number 333-115032) on Form S-3, including pre-effective amendments
no. 1, no. 2 and no. 3 thereto, for registration under the Act of shares of
Common Stock and the offering thereof from time to time in accordance with
Rule 415. Such Registration Statement has been declared effective by the
Commission and the Company has filed such post-effective amendments thereto
as may be required prior to the Execution Time and each such post-effective
amendment has been declared effective by the Commission. Promptly after
Execution Time, the Company will file the Prospectus with the Commission in
accordance with Rule 424(b). The Company has included in such registration
statement, as amended at the Effective Date, all information required by
the Act and the rules thereunder to be included in such registration
statement and the Prospectus.
(b) On the Effective Date, the Registration Statement did, and when the
Prospectus is filed in accordance with Rule 424(b) and on the Closing Date
(as defined herein), the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the Act
and the rules thereunder; on the Effective Date and at the Execution Time,
the Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus did not, and on the
date of any filing pursuant to Rule 424(b), and on the Closing Date, the
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement, or the
Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Company by the Underwriter
specifically for inclusion in the Registration Statement or the Prospectus
(or any supplement thereto).
(c) Each of the Company's (a) Form 10-K, for the fiscal year ended
December 31, 2003, (b) Form 10-Qs for the periods ended March 31, 2004,
June 30, 2004 and September 30, 2004, (c) Information Statement for the
2004 annual meeting of shareholders pursuant to Section 14(c) of the
Exchange Act, and (d) current reports on Form 8-K filed or furnished since
December 31, 2003 (collectively, the documents listed in (a), (b), (c) and
(d) above are referred to as the "1934 Act Reports") filed or furnished
with the Commission pursuant to the Exchange Act at the time they were or
hereafter are filed or furnished with the Commission complied or will
comply in all material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder, and, when filed
of furnished with the Commission, did not and will 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.
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(d) Each of the Company and Endo Pharmaceuticals Inc., a Delaware
corporation ("Endo Pharmaceuticals"), EPI Company, a Delaware corporation
("EPI"), BML Pharmaceuticals, Inc., a Delaware corporation ("BML") and Endo
Pharma Canada Inc., a corporation organized under the laws of the province
of New Brunswick, Canada ("Endo Canada", together with Endo
Pharmaceuticals, EPI and BML, the "Subsidiaries"), has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware or, with respect to Endo Canada,
the province of New Brunswick, Canada, with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified or in good
standing in any such other jurisdiction would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business (a "Material Adverse Effect").
(e) Other than the Subsidiaries, the Company has no subsidiaries and,
except for the Company's ownership interest in DURECT Corporation and U.S.
Dermatologics, Inc., does not own any shares of capital stock of or
interests in any other Person.
(f) All of the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company directly free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(g) The Company's authorized equity capitalization is as set forth in
the Prospectus. The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus. The
outstanding shares of Common Stock have been duly and validly authorized
and issued and are fully paid and nonassessable. The Securities being sold
hereunder by the Selling Stockholders have been duly and validly
authorized, and are fully paid and nonassessable. The Securities being sold
hereunder by the Selling Stockholders are duly listed, and admitted and
authorized for trading on the Nasdaq National Market. The certificates for
the Securities are in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities; and, except as set forth in
the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock of
or ownership interests in the Company are outstanding.
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(h) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed as
required; and the statements included or incorporated by reference in the
Prospectus under the headings "Risk Factors - Our ability to protect our
proprietary technology, which is vital to our business, is uncertain",
"Business - Governmental Regulation", "Business - Patents, Trademarks,
Licenses and Proprietary Property", "Business - Service Agreements",
Business - Licenses and Collaboration Agreements", "Business -
Environmental Matters", "Business - Legal Proceedings" and "Certain U.S.
Federal Income Tax Consequences to Non-U.S. Holders of Common Stock,"
insofar as such statements summarize legal matters, agreements, documents
or proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.
(i) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms.
(j) The Company is not an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(k) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriter in the manner contemplated herein and in the
Prospectus.
(l) Neither the sale of the Securities nor the consummation of any
other of the transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of the Subsidiaries pursuant to, (i) the charter or
by-laws of the Company or any of the Subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which the Company or any of the Subsidiaries is a party or bound or to
which their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of
the Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or any of the Subsidiaries or any of its or their properties;
except, in the case of clause (ii) or (iii), for any such conflict, breach,
violation or imposition that would not have a Material Adverse Effect.
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(m) Except for those rights contained in the Registration Rights
Agreement, dated as of July 17, 2000, as amended as of June 30, 2003, by
and between the Company and Endo Pharma LLC (the "Registration Rights
Agreement"), no holders of securities of the Company have rights to the
registration of any such securities. Pursuant to the Shelf Registration
Agreement between the Company and Endo Pharma LLC, dated April 30, 2004, as
amended, and Section 5.6(d) of the Amended and Restated Employee
Stockholder Agreement, dated June 5, 2003, as amended, no demand is being
exercised by Endo Pharma LLC and the rights granted under the Registration
Rights Agreement do not apply to the Registration Statement.
(n) The consolidated historical financial statements and schedules of
the Company incorporated by reference in the Prospectus and the
Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company
and its consolidated subsidiaries as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of
the Act and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected consolidated
financial data set forth under the caption "Selected Financial Data"
incorporated by reference in the Prospectus and Registration Statement
fairly present, on the basis stated in the Prospectus and the Registration
Statement, the information included therein.
(o) Except as set forth in the Prospectus, no action, suit or
proceeding by or before any court or governmental agency, authority or body
or any arbitrator, including, without limitation, the United States Food
and Drug Administration (the "FDA") and United States Drug Enforcement
Agency (the "DEA"), involving the Company or any of the Subsidiaries or its
or their respective properties is pending or, to the best knowledge of the
Company, threatened that (i) could have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could have a Material Adverse
Effect.
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(p) The Company and each of the Subsidiaries owns or leases all such
properties as are necessary to the conduct of its operations as presently
conducted.
(q) Neither the Company nor any Subsidiary is in violation or default
of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which it is a party or bound or to which its property is subject, or
(iii) except as set forth in the Prospectus, any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such Subsidiary or any of its
properties; except, in the case of clause (ii) or (iii), for any such
violation or default that would not have a Material Adverse Effect.
(r) Deloitte & Touche LLP, who has certified certain financial
statements of the Company, and delivered its report with respect to the
audited consolidated financial statements and schedules incorporated by
reference in the Prospectus, are independent public accountants with
respect to the Company, within the meaning of the Act and the applicable
published rules and regulations thereunder.
(s) Except for the New York State transfer tax, there are no transfer
taxes or other similar fees or charges under Federal law or the laws of any
state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the sale by
the Selling Stockholders of the Securities hereunder.
(t) Each of the Company and the Subsidiaries has filed all foreign,
Federal, state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so to
file would not have a Material Adverse Effect) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect.
(u) No labor problem or dispute with the employees of the Company or
any of the Subsidiaries exists or is threatened or imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or the Subsidiaries' principal suppliers,
contractors or customers, in each case that could have a Material Adverse
Effect.
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(v) The Company and each of the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the business in which they are
engaged; and the Company and each such Subsidiary believes that it will be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(w) Except as set forth in the Prospectus, (A) the Company and the
Subsidiaries possess all permits, licenses, provider numbers, certificates,
approvals, consents, orders, certifications and other authorizations
(collectively, "Governmental Licenses") issued by, and have made all
declarations and filings with, the appropriate Federal, state, local or
foreign regulatory agencies or bodies, including without limitation, the
FDA and the DEA, necessary to conduct the business now operated by the
Company and the Subsidiaries except where the failure to possess such
Governmental Licenses or to make such declarations and filings would not
result in a Material Adverse Effect; the Company and the Subsidiaries are
in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, individually and
in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity
of such Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not have a Material Adverse Effect;
and (B) neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(x) The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
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(y) The Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities
in violation of the Exchange Act.
(z) Except as set forth in the Prospectus, the Company, the
Subsidiaries and each of the research and development, manufacturing and
other facilities leased or operated by them (there being no such facilities
owned by the Company and the Subsidiaries) (i) are in compliance with any
and all applicable foreign, Federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses, (iii) have not
received notice of any actual or potential liability for the investigation
or remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, and (iv) are not subject to
liabilities and costs associated with compliance by them with Environmental
Laws, except where such non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals, or liabilities or
costs would not, individually and in the aggregate, have a Material Adverse
Effect. Neither the Company, the Subsidiaries nor any such facility has
received notice that it has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, in any proceeding currently pending.
(aa) Each of the Company and the Subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974 ("ERISA")
and the regulations and published interpretations thereunder with respect
to each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company and the
Subsidiaries are eligible to participate and each such plan is in
compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations.
Neither the Company nor any Subsidiary has incurred any unpaid liability to
the Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA.
(bb) The Company and the Subsidiaries own, have rights under, license
or have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct of
their business as now conducted; and neither the Company nor any of the
Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property, which
infringement or conflict, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
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(cc) Neither the Company nor any of the Subsidiaries have failed to
file with applicable regulatory authorities (including, but not limited to,
the FDA and DEA) any statement, report, information or form required by any
applicable law, regulation or order, except where the failure to file or to
be so in compliance would not, individually and in the aggregate, have a
Material Adverse Effect. No deficiencies have been asserted by any
regulatory commission, agency or authority with respect to any such filings
or submissions, except for any such failures to be in compliance or
deficiencies which would not, individually and in the aggregate, have a
Material Adverse Effect.
(dd) The Company has established a compliance program (including a
written compliance policy) to assist the Company and the Subsidiaries and
their respective directors, officers and employees in complying with
applicable regulatory agency guidelines (including, without limitation,
those regulations and guidelines published by FDA and DEA), and to provide
compliance policies governing applicable areas for pharmaceutical
companies.
(ee) Except as disclosed in the Registration Statement and the
Prospectus, the Company and the Subsidiaries do not have any material
lending or other relationship with any bank or lending affiliate of the
Underwriter.
Any certificate signed by any officer of the Company and delivered to
the Underwriter or counsel for the Underwriter in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to the Underwriter.
(ii) Each Selling Stockholder represents and warrants to, and agrees
with, the Underwriter that:
(a) Such Selling Stockholder is, or, in the case of any Stock Option
Selling Stockholder, prior to the Closing Date, will be, the record and
beneficial owner of the Securities to be sold by it hereunder free and
clear of all liens, encumbrances, equities and claims and has, or, in the
case of any Stock Option Selling Stockholder, prior to the Closing Date,
will have, duly endorsed, or will have required the attorney-in-fact to
duly endorse, such Securities in blank, and, assuming that the Underwriter
acquires its interest in the Securities from such Selling Stockholder
without notice of any adverse claim (within the meaning of Section 8-105 of
the New York Uniform Commercial Code as in effect in the State of New York
from time to time ("UCC")), the Underwriter, having purchased such
Securities delivered on the Closing Date to The Depository Trust Company or
other securities intermediary by making payment therefor as provided herein
and, having had such Securities credited to the securities account or
accounts of the Underwriter maintained with The Depository Trust Company or
such other securities intermediary, will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to such
Securities purchased by the Underwriter, and no action based on an adverse
claim (within the meaning of Section 8-105 of the UCC) may be asserted
against the Underwriter with respect to such Securities.
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(b) Such Selling Stockholder has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(c) Certificates in negotiable form for such Selling Stockholder's
Securities have been, or, in the case of any Stock Option Selling
Stockholder, prior to the Closing Date, will have been, placed in custody,
for delivery pursuant to the terms of this Agreement, under a Custody
Agreement and Power of Attorney duly authorized (if applicable), executed
and delivered by such Selling Stockholder, in the forms heretofore
furnished to you (each a "Custody Agreement") with American Stock Transfer
& Trust Company as Custodian (the "Custodian"); the Securities represented
by the certificates so held or to be held, as the case may be, in custody
for each Selling Stockholder are or will be, as the case may be, subject to
the interests hereunder of the Underwriter; the arrangements for custody
and delivery of such certificates, made by such Selling Stockholder
hereunder and under the Custody Agreement, are not subject to termination
by any acts of such Selling Stockholder, or by operation of law, whether by
the death or incapacity of such Selling Stockholder, or the occurrence of
any other event; and if any such death, incapacity or any other such event
shall occur before the delivery of such Securities hereunder, certificates
for the Securities will be delivered by the Custodian in accordance with
the terms and conditions of this Agreement and the Custody Agreement as if
such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such death,
incapacity or other event.
(d) To the best knowledge of such Selling Stockholder, no consent,
approval, authorization or order of any court or governmental agency or
body is required for consummation by such Selling Stockholder of the
transactions contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriter and such other approvals as have been
obtained.
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(e) To the best knowledge of such Selling Stockholder, neither the sale
of the Securities being sold by such Selling Stockholder nor the
consummation of any other of the transactions herein contemplated by such
Selling Stockholder or the fulfillment of the terms hereof by such Selling
Stockholder will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws or other
organizational documents, in each case if applicable, of such Selling
Stockholder or the terms of any indenture or other agreement or instrument
to which such Selling Stockholder or any of its subsidiaries (if
applicable) is a party or bound, or any judgment, order or decree
applicable to such Selling Stockholder or any of its subsidiaries (if
applicable) of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder or any of its subsidiaries (if applicable).
(f) In respect of any statements in or omissions from the Registration
Statement or the Prospectus or any supplements thereto made in reliance
upon and in conformity with information furnished in writing to the Company
by or on behalf of any Selling Stockholder specifically for use in
connection with the preparation thereof, such Selling Stockholder hereby
makes the same representations and warranties to the Underwriter as the
Company makes to the Underwriter under paragraph (i)(b) of this Section;
such Selling Stockholder does not possess any material non-public
information concerning the Company or any of its subsidiaries which is not
set forth in the Prospectus or any supplement thereto. The Underwriter
acknowledges and agrees that, for all purposes of this Agreement, the only
information furnished to the Company by or on behalf of any Selling
Stockholder specifically for use in the Registration Statement or the
Prospectus or any amendment or supplement thereto are the statements
pertaining to the number of shares owned and the number of shares proposed
to be sold by such Selling Stockholder under the caption "Principal and
Selling Stockholders."
Any certificate signed by or on behalf of any Selling Stockholder and
delivered to the Underwriter or counsel for the Underwriter in connection with
the offering of the Securities shall be deemed a representation and warranty by
such Selling Stockholder, as to matters covered thereby, to the Underwriter.
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2. Purchase and Sale.
Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Stockholders agree,
severally and not jointly, to sell to the Underwriter, and the Underwriter
agrees to purchase from the Selling Stockholders, at a purchase price of $20.02
per share, the Securities.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 AM, New York City time, on November 29, 2004, or at such
time on such later date not more than three Business Days after the foregoing
date as the Underwriter shall designate, which date and time may be postponed by
agreement among the Underwriter, the Company and the Selling Stockholders, being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Underwriter against payment by the Underwriter of the aggregate purchase
price of the Securities being sold by the Selling Stockholders to or upon the
order of the Selling Stockholders by wire transfer payable in same-day funds to
the accounts of the Custodian, one account established for the Advance Shares
(as defined in the Custody Agreement), the second account established for the
Goldman Advance Shares (as defined in the form of Custody Agreement entered into
among the Custodian, Xxxxxxx, Sachs & Co. and each of Xxxxx X. Xxxxx, Xxxxx X.
Xxxxxx, Xxxxx X.X. Xxx, Xxxxxxx X. Xxxxx and Xxxxxxxx X. Xxxxxxx) and the third
account established for Securities other than the Advance Shares and the Goldman
Advance Shares. Delivery of the Securities shall be made through the facilities
of The Depository Trust Company unless the Underwriter shall otherwise instruct.
The Company will pay all applicable state transfer taxes, if any,
involved in the transfer to the Underwriter of the Securities to be purchased by
it from the Selling Stockholders, and the Underwriter will pay any additional
stock transfer taxes involved in further transfers.
4. Offering by the Underwriter. It is understood that the Underwriter
proposes to offer the Securities for sale to the public as set forth in the
Prospectus.
5. Agreements. (i) The Company agrees with the Underwriter that:
(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration Statement or
supplement to the Prospectus or any Rule 462(b) Registration Statement
unless the Company has furnished the Underwriter a copy for its review
prior to filing and will not file any such proposed amendment or supplement
to which the Underwriter reasonably objects. Subject to the foregoing
sentence, the Company will cause the Prospectus, properly completed, and
any supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Underwriter of such timely
filing. The Company will promptly advise the Underwriter (1) when the
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (2) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (3) of
any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Prospectus or for any additional information, (4) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (5) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The Company
will use its best efforts to prevent the issuance of any such stop order or
the suspension of any such qualification and, if issued, to obtain as soon
as possible the withdrawal thereof.
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(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder, the Company promptly will (1) notify the
Underwriter of any such event, (2) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or omission or
effect such compliance, and (3) supply any supplemented Prospectus to the
Underwriter in such quantities as the Underwriter may reasonably request in
writing; provided that in case the Underwriter is required to deliver a
Prospectus in connection with sales of any of the Securities at any time
nine months or more after the Execution Time, any preparation and delivery
of any amended or supplemented Prospectus shall be at the expense of the
Underwriter.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Underwriter an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Underwriter and counsel for the
Underwriter four signed copies of the Registration Statement (including
exhibits thereto) and, so long as delivery of a prospectus by the
Underwriter or any dealer may be required by the Act, as many copies of the
Prospectus and any supplement thereto as the Underwriter may reasonably
request in writing.
14
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Underwriter may reasonably designate in writing and will maintain such
qualifications in effect so long as required for the distribution of the
Securities; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in
any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of the
Underwriter, offer, sell, contract to sell, pledge, or otherwise dispose
of, (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act,
any other shares of Common Stock or any securities convertible into, or
exercisable, or exchangeable for, shares of Common Stock; or publicly
announce an intention to effect any such transaction, for a period of 45
days after the date of this Agreement, provided, however, that the Company
and Endo Pharma LLC may issue and sell Common Stock pursuant to any
employee stock option plan, stock ownership plan or dividend reinvestment
plan of the Company or Endo Pharma LLC in effect at the Execution Time and
the Company may issue Common Stock issuable upon the conversion of
securities or the exercise of warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities
in violation of the Exchange Act.
(h) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, and each amendment or
supplement to either of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, the
Prospectus, and all amendments or supplements to either of them, as may, in
each case, be reasonably requested for use in connection with the offering
and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the original
issuance and sale of the Securities; (iv) the printing (or reproduction)
and delivery of this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in connection
with the offering of the Securities; (v) the registration of the Securities
under the Exchange Act and the listing of the Securities on the Nasdaq
National Market; (vi) any registration or qualification of the Securities
for offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of
counsel for the Underwriter relating to such registration and
qualification); (vii) any filings required to be made with the National
Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of counsel for the Underwriter relating to
such filings); (viii) the transportation and other expenses incurred by or
on behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local
and special counsel) for the Company and the Selling Stockholders (as among
the Selling Stockholders, as may be determined by Endo Pharma LLC); and (x)
all other costs and expenses incident to the performance by the Company and
the Selling Stockholders of their obligations hereunder (as among the
Selling Stockholders, as may be determined by Endo Pharma LLC).
15
(ii) Each Selling Stockholder agrees with the Underwriter that:
(a) Such Selling Stockholder will not, without the prior written
consent of the Underwriter, offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement
or otherwise) by the undersigned or any affiliate of the undersigned or any
person in privity with the undersigned or any affiliate of the
undersigned), directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 45 days after the
date of the Underwriting Agreement, other than Securities to be sold by
such Selling Stockholder hereunder; except, with respect to Endo Pharma
LLC, subject to the limited exceptions described in the lock-up letter
executed by Endo Pharma LLC.
16
(b) Such Selling Stockholder will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(c) Such Selling Stockholder will advise you promptly, and if requested
by you, will confirm such advice in writing, so as long as delivery of a
prospectus relating to the Securities by an underwriter or dealer may be
required under the Act, of any change in information in the Registration
Statement or the Prospectus relating to such Selling Stockholder.
6. Conditions to the Obligations of the Underwriter. The obligations of
the Underwriter to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company and the Selling Stockholders made
in any certificates pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and to the following additional conditions:
(a) The Registration Statement, including any 462(b) Registration
Statement, shall have become effective; the Prospectus, and any supplement
thereto, will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Company, and Xxxxxxxx X. Xxxxxxx, General
Counsel of the Company, to have furnished to the Underwriter their opinions,
dated the Closing Date and addressed to the Underwriter, in the form attached
hereto as Exhibits B and C, respectively.
(c) The Company shall have requested and caused (i) Xxxxx Xxxx &
Xxxxxxxx, special regulatory counsel for the Company, to have furnished to the
Underwriter their opinion, dated the Closing Date and addressed to the
Underwriter, in the form attached hereto as Exhibit D and (ii) (A) Xxxxxx &
Xxxxxxxx P.C., and (B) Xxxxxxxx & Xxxxxxx LLP, special intellectual property
counsels for BML and the Company, respectively, to have furnished to the
Underwriter their opinions, each dated the Closing Date and addressed to the
Underwriter, in the form attached hereto as Exhibit E.
17
(d) The Selling Stockholders shall have requested and caused Xxxxx X.
Xxxxxxx XX, Esq., Kleinberg, Kaplan, Xxxxx & Xxxxx and Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP and such other counsel to the Selling Stockholders as are
reasonably acceptable to the Underwriter, to have furnished to the Underwriter
their respective opinions dated the Closing Date and addressed to the
Underwriter, covering the matters specified in Exhibit F.
(e) The Underwriter shall have received from Debevoise & Xxxxxxxx LLP,
counsel for the Underwriter, such opinion or opinions, dated the Closing Date
and addressed to the Underwriter, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Underwriter may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Underwriter a certificate
of the Company, signed by the Chief Executive Officer and the Chief Financial
Officer of the Company, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement
are true and correct on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
or incorporated by reference in the Prospectus (exclusive of any supplement
thereto), there has been no Material Adverse Effect.
(g) The Selling Stockholders shall have furnished to the Underwriter a
certificate, signed on behalf of the Selling Stockholders and delivered pursuant
to the Custody Agreement, dated the Closing Date, to the effect that the
representations and warranties of the Selling Stockholders in this Agreement are
true and correct on and as of the Closing Date with the same effect as if made
on the Closing Date.
18
(h) The Company shall have requested and caused Deloitte & Touche LLP
to have furnished to the Underwriter a letter, at the Closing Date, dated the
Closing Date, in form and substance satisfactory to the Underwriter,
substantially in the same form and substance as the letters furnished by them in
connection with the August 2004 offering of common stock by certain selling
stockholders of the Company, updated accordingly to cover periods subsequent to
such offering to the satisfaction of the Underwriter.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (f) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business or properties of the Company and
the Subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Underwriter, so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(j) Prior to the Closing Date, the Company and the Selling Stockholders
shall have furnished to the Underwriter such further information, customary
closing and secretary certificates and documents as the Underwriter may
reasonably request, including, without limitation, Forms W-8 or W-9, as
required, from the Selling Stockholders.
(k) The Securities shall have been duly approved for quotation on the
Nasdaq National Market, and satisfactory evidence of such actions shall have
been provided to the Underwriter.
(l) Prior to the Execution Time, the Company shall have furnished to
the Underwriter a letter substantially in the form of Exhibit A hereto from Endo
Pharma LLC and each executive officer and director of the Company, addressed to
the Underwriter.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriter and counsel for the Underwriter, this Agreement
and all obligations of the Underwriter hereunder may be canceled at, or at any
time prior to, the Closing Date by the Underwriter. Notice of such cancellation
shall be given to the Company and the Selling Stockholders in writing or by
telephone or facsimile confirmed in writing.
19
The documents required to be delivered by this Section 6 shall be
delivered at the office of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Company, at 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing Date.
7. Reimbursement of the Underwriter's Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriter set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Underwriter, the Company will reimburse
the Underwriter on demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been reasonably incurred by
it in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter,
the directors, officers, employees and agents of the Underwriter and each person
who controls the Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or in any amendment thereof, or in the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by the Underwriter specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
20
(b) Each Selling Stockholder severally agrees to indemnify and hold
harmless the Underwriter, the directors, officers, employees and agents of the
Underwriter and each person who controls the Underwriter within the meaning of
either the Act or the Exchange Act to the same extent as the foregoing indemnity
to the Underwriter, but only with reference to written information furnished to
the Company by or on behalf of such Selling Stockholder specifically for use in
the documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any such Selling Stockholder may
otherwise have.
(c) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of either
the Act or the Exchange Act and each Selling Stockholder, to the same extent as
the foregoing indemnity to the Underwriter, but only with reference to written
information relating to the Underwriter furnished to the Company by or on behalf
of the Underwriter specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which the Underwriter may otherwise have. The Company and each of the
Selling Stockholders acknowledge that the statements set forth in the third and
penultimate paragraphs of the cover page of the Prospectus Supplement regarding
a commission equivalent and delivery of the Securities, respectively, and, under
the heading "Underwriting" in the Prospectus Supplement, the sentence related to
a commission equivalent and the paragraphs related to short sales, stabilization
and syndicate covering transactions in the Prospectus constitute the only
information furnished in writing by or on behalf of the Underwriter for
inclusion in the Prospectus.
(d) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b) or (c) above unless and to the extent it did
not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding. If at any time
an indemnified party shall have requested that an indemnifying party reimburse
the indemnified party for fees and expenses of counsel as contemplated by this
paragraph, the indemnifying party shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the indemnifying party of such
request and (ii) the indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement.
21
(e) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Stockholders and the
Underwriter agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company, one or more of the Selling Stockholders and the Underwriter may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and by the
Underwriter on the other from the offering of the Securities; provided, however,
that in no case shall the Underwriter be responsible for any amount in excess of
the underwriting discount or commission applicable to the Securities purchased
by the Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company, the Selling
Stockholders and the Underwriter shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company, the Selling Stockholders and of the Underwriter in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company and the Selling Stockholders on the one hand shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses) received
by the Selling Stockholders, and benefits received by the Underwriter on the
other shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company or the Selling Stockholders on the one hand or the Underwriter on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Selling Stockholders and the Underwriter agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (e), 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. For purposes of
this Section 8, each person who controls the Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of the Underwriter shall have the same rights to contribution as the
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (e). Notwithstanding the
foregoing, no Selling Stockholder shall be obligated to make contributions
hereunder which in the aggregate exceed the amount for which such Selling
Stockholder would have been liable pursuant to paragraph (b), as limited by
paragraph (f), of this Section 8 had indemnification been available thereunder.
22
(f) The liability of each Selling Stockholder under such Selling
Stockholders' representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the initial public offering price, net of
underwriting discounts, of the Securities sold by such Selling Stockholder to
the Underwriter.
9. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Underwriter, by notice given to the Company by the
Underwriter, prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or the Nasdaq National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Underwriter, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
23
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriter set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriter, will be mailed,
delivered or telefaxed to Bear, Xxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Syndicate Desk and copied to Debevoise &
Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX, 00000, Attention: Xxxxx X.
Xxxxxxxx, Esq., or, if sent to the Company, will be mailed, delivered or
telefaxed to Endo Pharmaceuticals Holdings Inc. (fax no.: (000) 000-0000) and
confirmed to the General Counsel, Endo Pharmaceuticals Holdings Inc. at 000
Xxxxxxxx Xxxxx, Xxxxxx Xxxx, XX 00000, Attention: Xxxxxxxx X. Xxxxxxx, Esq., and
copied to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000, Attention: Xxxxxx X. Xxxxxx, Esq., or if sent to the Selling
Stockholders, will be mailed delivered, or telefaxed to Xxxxx & Company (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxx & Company at
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx X. Xxxxxxx XX,
Esq. and to Xxxxxxxx X. Xxxxxxx, Esq., 000 Xxxxxxxx Xxxxx, Xxxxxx Xxxx, XX
00000.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
24
14. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
15. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
16. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date (which shall be the date of the
Prospectus) and time that this Agreement is executed and delivered by the
parties hereto.
"Prospectus" shall mean, collectively, the prospectus included in the
Registration Statement at the Effective Date and the final prospectus and
prospectus supplement relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time, in each case, as amended
or supplemented.
"Registration Statement" shall mean the registration statement referred
to in paragraph 1(a) above, including exhibits and financial statements, as
amended at the Execution Time and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the
case may be.
"Rule 415", "Rule 424", and "Rule 462" refer to such rules under the
Act.
25
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
26
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the Underwriter.
Very truly yours,
Endo Pharmaceuticals Holdings Inc.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President and Chief
Financial Officer
Endo Pharma LLC
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
Attorney-in-Fact acting on behalf of the
Selling Stockholders
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
As Attorney-in-Fact acting on behalf of
the Selling Stockholders named in
Schedule I hereto and for herself
27
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
By: Bear, Xxxxxxx & Co. Inc.
By: /s/ Xxxxxxx Parish
--------------------------------------------------
Name: Xxxxxxx Parish
Title: Senior Managing Director
EXHIBIT A
[FORM OF LOCK-UP AGREEMENT]
[LETTERHEAD OF ENDO PHARMA LLC OR OFFICER/DIRECTOR OF
ENDO PHARMACEUTICALS HOLDINGS INC.]
Endo Pharmaceuticals Holdings Inc.
Public Offering of Common Stock
, 2004
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among Endo
Pharmaceuticals Holdings Inc., a Delaware corporation (the "Company"), the
Selling Stockholders named in Schedule I thereto and you, relating to an
underwritten public offering of Common Stock, $.01 par value (the "Common
Stock"), of the Company.
In order to induce you to enter into the Underwriting Agreement, the
undersigned will not, without your prior written consent, offer, sell, contract
to sell, pledge or otherwise dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the undersigned or any affiliate of the undersigned
or any person in privity with the undersigned or any affiliate of the
undersigned), directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Securities and Exchange
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of capital stock of the Company or any securities
convertible into, or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period of
45 days after the date of the Underwriting Agreement.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
2
Yours very truly,
[SIGNATURE OF ENDO PHARMA
LLC/OFFICER/DIRECTOR]
[NAME AND ADDRESS OF ENDO PHARMA LLC/OFFICER/DIRECTOR]
EXHIBIT B
FORM OF OPINION OF
SKADDEN, ARPS, SLATE, XXXXXXX & XXXX, LLP
TO BE DELIVERED PURSUANT TO SECTION 6(b)
Ladies and Gentlemen:
We have acted as special counsel to Endo Pharmaceuticals Holdings Inc.,
a Delaware corporation (the "Company"), in connection with the Underwriting
Agreement, dated [o](the "Underwriting Agreement"), between you, as underwriter
(the "Underwriter"), the Company and the selling stockholders named in Appendix
I hereto (the "Management Selling Stockholders"), the selling stockholders named
in Appendix II hereto (the "Employee Selling Stockholders") and the selling
stockholders named in Appendix III and together with the Management Selling
Stockholders and the Employee Selling Stockholders, the "Selling Stockholders")
relating to the sale by the Selling Stockholders to the Underwriter of [o]
shares (the "Securities") of the Company's common stock, par value $.01 per
share (the "Common Stock").
This opinion is being furnished pursuant to Section 6(b) of the
Underwriting Agreement.
In rendering the opinions set forth herein, we have examined and relied
on originals or copies of the following:
(a) the registration statement on Form S-3 (File No. 333-115032) of the
Company relating to the Securities filed with the Securities and Exchange
Commission (the "Commission") on April 30, 2004 under the Securities Act of
1933, as amended (the "Securities Act"), allowing for delayed offerings pursuant
to Rule 415 of the Securities Act, Amendment No. 1 thereto filed with the
Commission on June 10, 2004, Amendment No. 2 thereto filed with the Commission
on June 14, 2004 and Amendment No. 3 thereto filed with the Commission on June
25, 2004 (such registration statement, as so amended and declared effective on
June 28, 2004, being hereinafter referred to as the "Registration Statement");
(b) the base prospectus dated [o] (the "Base Prospecutus") and the
prospectus supplement dated [o] (the "Prospectus Supplement), relating to the
Securities in the forms filed with the Commission pursuant to Rule 424(b) of the
General Rules and Regulations under the Securities Act (such Base Prospectus as
amended and supplemented by the Prospectus Supplement being hereinafter referred
to as the "Prospectus");
(c) the documents filed by the Company pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"), and incorporated by reference into
the Prospectus as of the date hereof (collectively, the "Incorporated
Documents");
B-1
(d) an executed copy of the Underwriting Agreement;
(e) a specimen certificate evidencing the Common Stock;
(f) the Certificate of Incorporation of the Company, as certified by
the Secretary of State of the State of Delaware (the "Certificate of
Incorporation");
(g) the Amended and Restated By-laws of the Company, as certified by
Xxxxxxxx X. Xxxxxxx, Secretary of the Company (the "By-laws");
(h) minutes of the Board of Directors or resolutions of the Board of
Directors of the Company adopted by unanimous written consent, dated [o];
(i) resolutions of the Board of Managers of Endo Pharma LLC adopted by
unanimous written consent, dated [o];
(j) resolutions of the Committee Administering the Equity Plans of Endo
Pharma LLC, adopted by unanimous written consent, dated [o];
(k) a certificate of Xxxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxx,
Secretary and Treasurer of the Company, respectively, dated the date hereof (the
"Company's Certificate");
(l) copies of each of the Applicable Contracts (as defined below);
(m) certificates, dated several dates in [o] and a facsimile bringdown
thereof dated [o] from the Secretary of State of the State of Delaware,
certifying that each of the Company and its subsidiaries, EPI Company, BML
Pharmaceuticals, Inc. and Endo Pharmaceuticals Inc. (the "Subsidiaries") is in
good standing in Delaware (the "Delaware Good Standing Certificates");
(n) the Custody Agreements and Powers of Attorney entered into among
the Employee Selling Stockholders, Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx, as
Attorneys-in-Fact, and American Stock Transfer and Trust Company, as Custodian
(the "Employee Custody Agreements");
(o) the Custody Agreements and Powers of Attorney entered into among
the Management Selling Stockholders, Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx, as
Attorneys-in-Fact, American Stock Transfer and Trust Company, as Custodian, and
Xxxxxxx, Sachs & Co. (the "Management Custody Agreements"); and
(p) the Custody Agreements and Powers of Attorney entered into among
the selling stockholders named in Appendix III, Xxxxxxx X. Xxxxx and Xxxxx X.
Xxxxx, as Attorneys-in-Fact, American Stock Transfer and Trust Company, as
Custodian (the "Director Custody Agreements," together with the Employee Custody
Agreements and the Management Custody Agreements, the "Custody Agreements").
B-2
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and such
agreements, certificates and receipts of public officials, certificates of
officers or other representatives of the Company and others, and such other
documents as we have deemed necessary or appropriate as a basis for the opinions
set forth below.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as facsimile, electronic, certified or photostatic
copies, and the authenticity of the originals of such copies. In making our
examination of executed documents, we have assumed that the parties thereto,
other than the Company, had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and the execution and delivery by
such parties of such documents and the validity and binding effect thereof on
such parties. As to any facts material to the opinions expressed herein that we
did not independently establish or verify, we have relied upon statements and
representations of officers and other representatives of the Company and others
and of public officials.
As used herein: (i) "Applicable Contracts" means those agreements or
instruments identified in Schedule I hereto; (ii) "Applicable Laws" means the
General Corporation Law of the State of Delaware (the "DGCL") and those laws,
rules and regulations of the State of New York and the federal laws, rules and
regulations of the United States of America, in each case that, in our
experience, are normally applicable to transactions of the type contemplated by
the Underwriting Agreement (other than the United States federal securities
laws, state securities or blue sky laws, antifraud laws and the rules and
regulations of the National Association of Securities Dealers, Inc.), but
without our having made any special investigation as to the applicability of any
specific law, rule or regulation; (iii) "Governmental Authorities" means any
court, regulatory body, administrative agency or governmental body of the State
of New York, the State of Delaware or the United States of America having
jurisdiction over the Company under Applicable Laws; (iv) "Governmental
Approval" means any consent, approval, license, authorization or validation of,
or filing, qualification or registration with, any Governmental Authority
required to be made or obtained by the Company pursuant to Applicable Laws,
other than any consent, approval, license, authorization, validation, filing,
qualification or registration that may have become applicable as a result of the
involvement of any party (other than the Company) in the transactions
contemplated by the Underwriting Agreement or because of such parties' legal or
regulatory status or because of any other facts specifically pertaining to such
parties; and (v) "Applicable Orders" means those judgments, orders or decrees
identified on Schedule II hereto.
B-3
The opinions set forth below are subject to the following further
qualifications, assumptions and limitations:
(a) the opinion set forth in paragraph 1 below with respect to the
valid existence and good standing of the Company and the Subsidiaries as
corporations under the laws of the State of Delaware is based solely upon the
Delaware Good Standing Certificates;
(b) we do not express any opinion as to the effect on the opinions
expressed herein of (i) the compliance or noncompliance of any party to the
Underwriting Agreement and the Custody Agreements (other than with respect to
the Company to the extent necessary to render the opinion set forth herein) with
any state, federal or other laws or regulations applicable to it or them or (ii)
the legal or regulatory status or the nature of the business of any other party
(other than with respect to the Company and the Subsidiaries to the extent
necessary to render the opinion set forth herein);
(c) the opinion set forth in paragraph 6 below is based solely on our
discussions with the officers or other representatives of the Company
responsible for the matters discussed therein, our review of the documents
furnished to us by the Company and our reliance on the representations and
warranties of the Company contained in the Underwriting Agreement and the
Company's Certificate; we have not made any other inquiries or investigations or
any search of the public docket records of any court, governmental agency or
body or administrative agency;
(d) in rendering the opinions set forth in paragraphs 7 and 8 below, we
have relied solely on the stock record books of the Company in determining the
number of all issued and outstanding shares of capital stock of the Company and
have assumed, other than for the 70,224,130 shares of Common Stock issued as a
stock dividend in July 2000 (the "Dividend Shares"), that the consideration
recited in the resolutions of the Board of Directors of the Company approving
the issuance of all such shares has been received in full by the Company and
that the certificates evidencing such shares as issued conform to the specimen
certificates examined by us; we have assumed that the Dividend Shares were
issued in compliance with DGCL Section 170;
(e) we note that certain of the Applicable Contracts are governed by
laws other than the Applicable Laws; our opinions expressed herein are based
solely upon our understanding of the plain language of such agreement or
instrument, and we do not express any opinion with respect to the validity,
binding nature or enforceability of any such agreement or instrument, and we do
not assume any responsibility with respect to the effect on the opinions or
statements set forth herein of any interpretation thereof inconsistent with such
understanding;
B-4
We do not express any opinion as to any laws other than Applicable Laws
and the federal laws of the United States of America to the extent referred to
specifically herein. Insofar as the opinions expressed herein relate to matters
governed by laws other than those set forth in the preceding sentence, we have
assumed, without having made any independent investigation, that such laws do
not affect any of the opinions set forth herein. The opinions expressed herein
are based on laws in effect on the date hereof, which laws are subject to change
with possible retroactive effect.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Each of the Company and the Subsidiaries has been duly incorporated
and is validly existing in good standing under the laws of the State of
Delaware.
2. The Company has the corporate power and corporate authority to
conduct its business and to own and lease its properties, in each case as
described in the Prospectus.
3. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
4. The execution and delivery by the Company of the Underwriting
Agreement and the consummation by the Company of the transactions contemplated
thereby, including the issuance and sale of the Securities, will not (i)
conflict with the Certificate of Incorporation or By-Laws, (ii) constitute a
violation of, or a breach or default under the terms of any Applicable Contract
or (iii) violate or conflict with, or result in any contravention of, any
Applicable Law or Applicable Order. We do not express any opinion, however, as
to whether the execution, delivery or performance by the Company of the
Underwriting Agreement will constitute a violation of, or a default under, any
covenant, restriction or provision with respect to any financial ratios or tests
or any aspect of the financial condition or results of operations of the
Company.
5. No Governmental Approval, which has not been obtained or taken and
is not in full force and effect, is required to authorize, or is required for,
the execution and delivery of the Underwriting Agreement by the Company or the
consummation by the Company of the transactions contemplated thereby.
6. To our knowledge, there are no legal or governmental proceedings
pending to which the Company or the Subsidiaries are a party or to which any
property of the Company or the Subsidiaries are subject that are required to be
disclosed in the Prospectus pursuant to Item 103 of Regulation S-K of the Rules
and Regulations that are not so disclosed, except that we do not express any
opinion in this paragraph 6 with respect to legal or governmental proceedings
relating to regulatory matters of the type referred to in the Prospectus under
the captions "Risk Factors - The pharmaceutical industry is heavily regulated,
which creates uncertainty about our ability to bring new products to market and
imposes substantial compliance costs on our business" and "Business -
Governmental Regulation".
B-5
7. The Company has an authorized capitalization as set forth in the
Prospectus and the authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock". The [o] shares of
Common Stock shown by the Company's stock record books as being issued and
outstanding on [o] have been duly authorized and validly issued and are fully
paid and nonassessable, and free and clear of any preemptive rights or any
similar rights arising under the Company's Certificate of Incorporation or
By-laws, the DCGL, or under any Applicable Contract.
8. The form of certificate used to evidence the Common Stock complies
in all material respects with the applicable requirements of the Certificate of
Incorporation, By-laws and the DGCL.
9. The Company is not an "investment company," as such term is defined
in the Investment Company Act of 1940, as amended.
10. No holders of securities of the Company have any rights under any
Applicable Contract to have such securities included in the Registration
Statement except for securities that have been included and securities with
respect to which those rights have been waived.
This letter is furnished only to you and is solely for your benefit in
connection with the closing occurring today and the offering of the Securities,
in each case pursuant to the Underwriting Agreement. Without our prior written
consent, this letter may not be used, circulated, quoted or otherwise referred
to for any other purpose, or relied upon by, or assigned to, any other person
for any purpose, including any other person that acquires Securities or that
seeks to assert your rights in respect of this letter (other than your successor
in interest by means of merger, consolidation, transfer of a business or other
similar transaction).
B-6
Schedule I
Applicable Orders
B-7
Schedule II
Applicable Contracts
B-8
EXHIBIT C
FORM OF OPINION OF
XXXXXXXX X. XXXXXXX
TO BE DELIVERED PURSUANT TO SECTION 6(b) AND 6(c)(ii)(A)
Ladies and Gentlemen:
I am the Executive Vice President, Chief Legal Officer and Secretary of
Endo Pharmaceuticals Holdings Inc. (the "Company") and have acted in that
capacity in connection with the Underwriting Agreement, dated [o], 2004 (the
"Underwriting Agreement"), among Bear, Xxxxxxx & Co. Inc. as underwriter (the
"Underwriter"), the Company and the selling stockholders named in the
Underwriting Agreement (the "Selling Stockholders") relating to the sale by the
Selling Stockholders to the Underwriter of [o] shares (the "Shares") of the
Company's common stock, par value $.01 per share (the "Common Stock"). The
Shares are also referred to herein as the "Securities." Capitalized terms used
and not otherwise defined herein shall have the respective meanings set forth in
the Underwriting Agreement.
This opinion is being rendered pursuant to Sections 6(b) and
6(c)(ii)(A) of the Underwriting Agreement.
In connection with this opinion, I, or an attorney under my
supervision, have examined and relied on originals or copies, certified or
otherwise identified to my satisfaction, of the following:
(i) the registration statement on Form S-3 (File No. 333-115032)
of the Company relating to the Securities filed with the
Securities and Exchange Commission (the "Commission") on April
30, 2004 under the Securities Act of 1933, (the "Securities
Act"), allowing for delayed offerings pursuant to Rule 415 of
the Securities Act, Amendment No. 1 thereto filed with the
Commission on June 10, 2004, Amendment No. 2 thereto filed
with the Commission on June 14, 2004 and Amendment No. 3
thereto filed with the Commission on June 25, 2004 (such
registration statement, as so amended and declared effective
on June 28, 2004, being hereinafter referred to as the
"Registration Statement");
(ii) the prospectus supplement dated [o], 2004, relating to the
Securities in the form filed with the Commission pursuant to
Rule 424(b) of the General Rules and Regulations under the
Securities Act (such prospectus supplement being hereinafter
referred to as the "Prospectus");
(iii) the documents filed by the Company pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act") and incorporated by
reference into the Prospectus as of the date hereof
(collectively, the "Incorporated Documents");
C-1
(iv) an executed copy of the Underwriting Agreement;
(v) the Amended and Restated Certificate of Incorporation of the
Company, as currently in effect (the "Certificate of
Incorporation");
(vi) the Amended and Restated By-laws of the Company, as currently
in effect (the "By-laws");
(vii) certain minutes and resolutions of the Board of Directors of
the Company adopted by unanimous written consent on [o];
(viii) a certificate, dated [o] and a facsimile bringdown thereof
dated [o] from the Secretary of State of the State of Delaware
as to the Company's good standing in Delaware (the "Delaware
Good Standing Certificates");
(ix) the patents and applications identified in Schedule A hereto;
and
(x) any former opinions listed in Schedule B hereto.
I have also examined originals or copies, certified or otherwise
identified to my satisfaction, of such records of the Company and such
agreements, certificates and receipts of public officials, certificates of
officers or other representatives of the Company and others, and such other
documents as I have deemed necessary or appropriate as a basis for the opinions
set forth below. With respect to paragraphs 8 through 14, (i) I have undertaken
no factual investigation other than (x) the examinations discussed in the
foregoing paragraph and (y) discussions with the Company's scientific personnel
and Vice President, Intellectual Property; and (ii) I have relied on the advice
of the Company's Vice President, Intellectual Property and the opinions of
outside counsel set forth on Schedule B hereto.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as facsimile, electronic, certified or photostatic
copies, and the authenticity of the originals of such copies. In making my
examination of executed documents, I have assumed that the parties thereto,
other than the Company, had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof on such
parties. As to any facts material to the opinions expressed herein which I did
not independently establish or verify, I have relied upon statements and
representations of officers and other representatives of the Company and others
and of public officials. I have assumed that neither the Company, nor any of the
Company's property, is the subject of a receivership.
C-2
I have further assumed the accuracy and completeness of the judicial
and other government records and indices examined by me and the current and
complete indexing of such records; that the certificates, waivers, and reports
of or relating to public offices and officials examined and relied upon by me
have been validly issued and correctly set forth the facts stated therein and
that all other certificates relied upon by me correctly set forth the facts
stated therein; and that to the extent my opinions relate to matters as to which
governmental agencies have issued certificates or other statements, or as to
which I have received certificates from officers of the Company, or as to which
I have made or caused to be made examinations of judicial and other government
records and indices, there have been no changes in the facts reflected in such
certificates and records from the date of such certificates and examinations
through the date hereof.
I am admitted to the Bar of the State of New York, and I do not express
any opinion as to the laws of any jurisdiction other than the laws of the State
of New York, the General Corporation Law of the State of Delaware, and the
federal laws of the United States of America to the extent referred to
specifically herein. Insofar as the opinions expressed herein relate to matters
governed by laws other than those set forth in the preceding sentence, I have
assumed, without having made any independent investigation, that such laws do
not affect any of the opinions set forth herein. The opinions expressed herein
are based on laws in effect on the date hereof, which laws are subject to change
with possible retroactive effect. The phrases "to my knowledge", "known to me,"
and "knowledge" refer only to the conscious awareness of facts or other
information pertaining to the Company.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. Each of the Company and its subsidiaries, Endo Pharmaceuticals
Inc., EPI Company, and BML Pharmaceuticals, Inc.
(collectively, the "Subsidiaries") is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
to so qualify or to be in good standing would not result in a
material adverse effect on the business of the Company (a
"Material Adverse Effect"). Except as otherwise disclosed in
the Registration Statement, all of the issued and outstanding
capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned
by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
C-3
2. The statements contained or incorporated by reference in the
Prospectus under the headings "Risk Factors - Our ability to
protect our proprietary technology, which is vital to our
business, is uncertain," "Business - Government Regulation,"
Business - Patents, Trademarks, Licenses and Proprietary
Information," "Business - Services Agreements," "Business -
Licenses and Collaboration Agreements," "Business -
Environmental Matters" and "Business-Legal Proceedings,"
insofar as such statements purport to summarize legal matters,
agreements, documents or proceedings discussed therein, are
accurate and fair summaries of such legal matters, agreements,
documents and proceedings.
3. No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in
connection with the sale of the Securities by the Selling
Stockholders as contemplated by the Underwriting Agreement,
except as may be required under the securities and blue sky
laws in connection with the purchase and distribution of the
Securities by the Underwriter in the manner contemplated by
the Underwriting Agreement and the Prospectus.
4. The sale of the Securities as contemplated by the Underwriting
Agreement will not conflict with, result in a breach or
violation of or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Subsidiaries
pursuant to, (i) the charter or by-laws of any of the
Subsidiaries, (ii) the terms of any indenture or other
agreement, obligation, condition, covenant or instrument known
to me to which the Company or the Subsidiaries are a party or
bound or to which its or their property is subject or (iii)
any statute, law, rule, regulation, judgment, order or decree
known to me to be applicable to the Company or the
Subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitratory or other authority
having jurisdiction over the Company or the Subsidiaries or
any of its or their properties, except, in the case of each of
(ii) and (iii) above, for any such conflict, breach, violation
or imposition that would have a Material Adverse Effect.
5. Except as set forth in the Prospectus, no action, suit or
proceeding by or before any court or governmental agency,
authority or body or any arbitrator, including, without
limitation, the United States Food and Drug Administration
(the "FDA") and United States Drug Enforcement Agency (the
"DEA"), involving the Company or any of the Subsidiaries or
its or their respective properties is pending or, to the best
of my knowledge, threatened that (i) could have a material
adverse effect on the performance of the Underwriting
Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could have a Material Adverse
Effect.
C-4
6. Except as set forth in the Prospectus, (A) the Company and the
Subsidiaries possess all permits, licenses, provider numbers,
certificates, approvals, consents, orders, certifications and
other authorizations (collectively, "Governmental Licenses")
issued by, and have made all declarations and filings with,
the appropriate Federal, state, local or foreign regulatory
agencies or bodies, including without limitation, the FDA and
the DEA, necessary to conduct the business now operated by the
Company and the Subsidiaries except where the failure to
possess such Governmental Licenses or to make such
declarations and filings would not result in a Material
Adverse Effect; the Company and the Subsidiaries are in
compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply
would not, individually and in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a
Material Adverse Effect; and (B) neither the Company nor any
Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such Governmental
Licenses which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
7. There is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required.
8. The documents incorporated by reference in the Registration
Statement and the Prospectus, when they became effective or
were filed with the Commission, as the case may be, appeared
on their face to be appropriately responsive in all material
respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the Rules and Regulations,
except that in each case, I do not express an opinion as to
the financial statement schedules or other financial data
included in the Registration Statement or the Prospectus or
excluded therefrom and I do not assume any responsibility for
the accuracy, completeness or fairness of the statements
contained therein.
9. The Company and the Subsidiaries own, have rights under,
license or have other rights to use, on commercially
reasonable terms, all intellectual property necessary for the
conduct of their businesses as now conducted; and other than
as described in the Prospectus, neither the Company not any of
the Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any
intellectual property, which infringement or conflict,
individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding would result in a
Material Adverse Effect.
C-5
10. The Company and the Subsidiaries own or possess all U.S.
patents and patent applications listed on Schedule A hereto
(collectively, the "Intellectual Property"). All such
Intellectual Property is in Good Standing, Valid, and
Enforceable.1
11. Based on my review of certain third party rights made known to
me and the discussions with scientific personnel of the
Company, the Company's Vice President - Intellectual Property
and written opinions of attorneys who are members of the
patent bar and who are licensed to practice law in the
Commonwealth of Pennsylvania, which opinions are listed on
Schedule B hereto, I have no knowledge of any valid United
States or foreign patent that is or would be infringed by the
activities of the Company or the Subsidiaries in the
manufacture, use or sale of any existing product as currently
manufactured, used, or sold, the technologies currently
employed by the Company and the Subsidiaries, or their current
method of use in any existing product, each as described in
the Prospectus.
12. The Company's Vice President - Intellectual Property has
reviewed the Company and the Subsidiary patent applications
that are identified on Schedule A hereto. Based upon this
review and discussions relating thereto with the Company's
Vice President - Intellectual Property, I am of the opinion
that the Company and the Subsidiary patent applications have
been properly prepared and filed, and are being diligently
pursued by the Company and the Subsidiaries, as the case may
be, and the inventions described in the Company and the
Subsidiary patent applications are owned by, or are licensed
to the Company or the Subsidiaries.
-----------------------------------
1 By "Good Standing, Valid, and Enforceable" is meant that applications have
been duly filed and patents duly issued, the patents or applications have
not been abandoned, and all fees due have been or can still be paid. It
should be noted that although issued patents enjoy a presumption of
validity and enforceability, patents are always subject to challenge in a
court of competent jurisdiction or in the patent office. Such challenges
occasionally result in a patent being declared invalid or unenforceable.
This risk is ever-present and I can, of course, offer no guarantee as to
the outcome of any such challenges.
C-6
13. Except as disclosed in the Prospectus, I have no knowledge of
any basis for a right or claim by any party or individual in
any of the inventions, patents or patent applications listed
on Schedule A hereto, except for such right or claim, which if
the subject of an unfavorable decision, ruling or finding,
would not have a Material Adverse Effect, and to the best of
my knowledge, each of the Company's and the Subsidiaries'
patent applications discloses patentable subject matter.
14. The Company's and the Subsidiaries' Intellectual Property
licenses are in full force and effect, no default or
threatened default exists under such licenses and, to my
knowledge, no basis exists for the same.
15. I know of no legal or governmental proceedings that are
pending or, to my knowledge, that are threatened, relating to
any Intellectual Property, except (A) as disclosed in the
Prospectus or (B) which, individually or in the aggregate, if
the subject of an unfavorable decision, ruling or finding,
would not have a Material Adverse Effect.
16. I am familiar with the Intellectual Property used by the
Company and the Subsidiaries in their business and the manner
of such use and I have reviewed the Registration Statement and
the Prospectus, including particularly the portions of the
Prospectus describing or referring to any Intellectual
Property (collectively, the "Intellectual Property
Disclosure"). I have reviewed, among other things, the
statements in the Prospectus under the captions:
"Risk Factors - Our Ability to protect our proprietary technology,
which is vital to our business, is uncertain." and
"Business - Patents, Trademarks, Licenses and Proprietary Property."
17. To my knowledge, the execution and delivery of the
Underwriting Agreement and the Custody Agreement and the
consummation of the sale of Common Stock by Endo LLC does not
conflict with or result in a breach of any terms or provisions
of, or constitute a default under, the limited liability
company agreement of Endo LLC and any agreement or instrument
to which Endo LLC is a party or by which Endo LLC may be
bound, and will not conflict with or result in a breach or
violation of any statute or any order, rule or regulation
known to me and applicable to the transactions contemplated by
the Underwriting Agreement and the Custody Agreement.
C-17
I have been orally advised by the Company's special counsel, Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, that the Registration Statement was declared
effective under the Securities Act at o p.m. on [o] and that no stop order
suspending the effectiveness of the Registration Statement has been issued and,
to the best of my knowledge, no proceedings for that purpose have been
instituted or threatened by the Commission. The Prospectus was filed with the
Commission in the manner and within the time period required by Rule 424(b) of
the Rules and Regulations. In addition, I have participated in conferences with
officers and other representatives of the Company, representatives of the
independent accountants for the Company and you and your counsel at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although I am not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and have made no
independent check or verification thereof (other than to the limited extent
specified in paragraph 2 above) on the basis of the foregoing, no facts have
come to my attention that have led me to believe that the Registration
Statement, at the time it became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date and as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that I express no belief with
respect to the financial statements, financial statement schedules and other
financial data included therein or excluded therefrom or the exhibits to the
Registration Statement.
This opinion is furnished only to you in connection with the closing
under the Underwriting Agreement occurring today, is solely for your benefit and
may not be used or relied upon by, or assigned to, any other person for any
purpose (including any person other than you that acquires Securities or that is
your successor in interest), without my prior written consent. This opinion is
not to be used, circulated, quoted or otherwise referred to for any other
purpose without my prior written consent, except to the extent that such use
circulation, quotation or reference is necessary so that the issuance of the
Securities is not treated as a "confidential transaction" within the meaning of
Treasury Regulations section 1.6011-4(b)(3).
C-8
EXHIBIT D
FORM OF OPINION OF COMPANY'S REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(c)(i)
(i) the statements included or incorporated by reference in the
Prospectus set forth under the captions "Risk Factors - The pharmaceutical
industry is heavily regulated, which creates uncertainty about our ability to
bring new products to market and imposes substantial compliance costs on our
business", Risk Factors - If the efforts of manufacturers of branded
pharmaceuticals to use litigation and legislative and regulatory efforts to
limit the use of generics and certain other products are successful, our sales
may suffer", "Business- Government Regulation" (collectively, the Regulatory
Disclosure"), insofar as such statements purport to describe or summarize
applicable provisions of the Federal Food, Drug, and Cosmetic Act ("FDCA") and
the Controlled Substances Act ("CSA") and the regulations promulgated
thereunder, are accurate and complete in all material respects and fairly
present the information set forth therein;
(ii) the Company and the Subsidiaries have obtained such licenses,
permits, approvals, and authorizations required by the United States Food and
Drug Administration ("FDA") and the Drug Enforcement Agency ("DEA") that are
necessary for the conduct of the business of the Company and the Subsidiaries as
it is currently conducted and described in the Prospectus and to our knowledge
such authorizations are in effect;
(iii) we are not aware of any lawsuit or regulatory proceeding, pending
or threatened, brought by or before the FDA or the DEA, in which the Company or
the Subsidiaries is or would be the defendant or respondent, nor are we aware of
any adverse judgment, decree, or order currently in effect that has been issued
by the FDA or the DEA against the Company or the Subsidiaries.
Although we are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check or
verification thereof (other than to the limited extent specified in paragraph
(i) above) on the basis of the foregoing, no facts have come to our attention
that have led us to believe that the Regulatory Disclosure in the Registration
Statement, at the time the Registration Statement became effective, contained an
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Regulatory Disclosure in the Prospectus, as of the date
of the Prospectus and as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
D-1
EXHIBIT E
FORM OF OPINION OF COMPANY'S
INTELLECTUAL PROPERTY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(c)(ii)
(i) To the best of our knowledge, the Company and the Subsidiaries own
or possess all Intellectual Property currently employed by them in connection
with the business now operated by them except where the failure to own or
possess or otherwise be able to acquire such Intellectual Property could not,
individually or in the aggregate, have a Material Adverse Effect.
(ii) Based upon a review of the third party rights made known to us and
discussions with scientific personnel of the Company, we are not aware of any
valid United States or foreign patent that is or would be infringed by the
activities of the Company or the Subsidiaries in the manufacture, use or sale of
any existing or presently proposed product, the technologies employed by the
Company and the Subsidiaries or the method of their use in any existing or
presently proposed product, each as described in the Prospectus and as such are
related to the foregoing technology and products.
(iii) We have reviewed the Company and the Subsidiary patent
applications which are identified in the Patent Schedule included with this
letter, and in such counsel's opinion the Company and the Subsidiary patent
applications have been properly prepared and filed, and are being diligently
pursued by the Company and the Subsidiaries, as the case may be, and the
inventions described in the Company and the Subsidiary patent applications are
owned by, have been assigned to or are licensed to the Company or the
Subsidiaries.
(iv) To our knowledge except as disclosed in the Prospectus, no party
or individual has any right or claim in any of the inventions, patents or patent
applications listed in the Patent Schedule and to the best of our knowledge each
of the Company's and the Subsidiaries' patent applications discloses patentable
subject matter.
(v) To the best of our knowledge, neither the Company nor the
Subsidiaries are infringing or otherwise violating any Intellectual Property of
others, unless otherwise disclosed in the Prospectus. To the best of our
knowledge, except as disclosed in the Prospectus neither the Company nor the
Subsidiaries have received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property.
(vi) All of the Company's and the Subsidiaries' Intellectual Property
licenses are in full force and effect, no default or threatened default exists
under such licenses and, to our knowledge, no basis exists for the same.
E-1
(vii) We know of no legal or governmental proceedings that are pending
or, to the best of our knowledge, that are threatened, relating to any
Intellectual Property, except (A) as disclosed in the Prospectus or (B) which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could have a Material Adverse Effect.
(viii) We are familiar with the Intellectual Property used by the
Company and the Subsidiaries in their business and the manner of such use and we
have reviewed the Registration Statement and the Prospectus, including
particularly the portions of the Prospectus describing or referring to any
Intellectual Property (collectively, the "Intellectual Property Disclosure"). We
have reviewed, among other things, the statements included or incorporated by
reference in the Prospectus under the captions:
"Risk Factors - Our Ability to protect our proprietary
technology, which is vital to our business, is uncertain"
and
"Business - Patents, Trademarks, Licenses and Proprietary
Property."
Although we are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check or
verification thereof (other than to the limited extent specified in paragraph
(viii) above) on the basis of the foregoing, no facts have come to our attention
that have led us to believe that the Intellectual Property Disclosure in the
Registration Statement, at the time the Registration Statement became effective,
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Intellectual Property Disclosure in the
Prospectus, as of the date of the Prospectus and as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
E-2
EXHIBIT F
FORM OF OPINION OF
SELLING STOCKHOLDERS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(d)
(i) This Agreement and the Custody Agreement and Power of Attorney have
been duly authorized (if applicable), executed and delivered by the Selling
Stockholders, the Custody Agreement is valid and binding on the Selling
Stockholders and each Selling Stockholder has full legal right and authority to
sell, transfer and deliver in the manner provided in this Agreement and the
Custody Agreement the Securities being sold by such Selling Stockholder
hereunder.
(ii) Assuming that the Underwriter acquires its interest in the
Securities it has purchased from such Selling Stockholder without notice of any
adverse claim (within the meaning of Section 8-105 of the UCC), the Underwriter,
having purchased such Securities delivered on the Closing Date to The Depository
Trust Company or other securities intermediary by making payment therefor as
provided herein and, having had such Securities credited to the securities
account or accounts of such Underwriter maintained with The Depository Trust
Company or such other securities intermediary will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to such
Securities purchased by the Underwriter, and no action based on an adverse claim
(within the meaning of Section 8-105 of the UCC) may be asserted against the
Underwriter with respect to such Securities.
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by any Selling
Stockholder of the transactions contemplated herein, except such as may have
been obtained under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals (specified in such
opinion) as have been obtained.
(iv) Neither the sale of the Securities being sold by any Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by any Selling Stockholder or the fulfillment of the terms hereof
by any Selling Stockholder will conflict with, result in a breach or violation
of, or constitute a default under any law or the charter or by-laws or other
organizational documents, in each case if applicable, of the Selling Stockholder
or the terms of any indenture or other agreement or instrument known to such
counsel and to which any Selling Stockholder or any of it subsidiaries (if
applicable) is a party or bound, or any judgment, order or decree known to such
counsel to be applicable to any Selling Stockholder or any of its subsidiaries
(if applicable) of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over any Selling Stockholder
or any of its subsidiaries (if applicable).
F-1
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York or the Federal laws of the United States or the Delaware General
Corporation Law, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriter, and (B) as to
matters of fact, to the extent they deem proper, on certificates of the Selling
Stockholders and public officials.
F-2
