EXHIBIT D Shareholders Agreement
SHAREHOLDERS AGREEMENT, dated as of November 5, 2006 (this “Agreement”), by and
between XXXXXX LABORATORIES, an Illinois corporation (“Parent”), on the one hand, and
Xxxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Point Holdings, LP, Kos
Investments, Inc., Cubs Management, LLC, Kos Holdings, Inc., Jaharis Holdings, LLC, Xxxxxx Xxxxxxx
Generational Trust, 2002 Xxxx Xxxxxxx Grantor Retained Annuity Trust 2, Xxxxxxx and Xxxx Xxxxxxx
Alaska Community Property Trust, Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxx Joint Account, the Jaharis
Family Foundation, Inc. and Xxxxxxx Xxxxxx Xxxxxxx Trust 1 (collectively, the
“Shareholders”), on the other hand. Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Merger Agreement.
W I T N E S S E T H:
WHEREAS, Parent, S&G Nutritionals, Inc., a Delaware corporation and a direct wholly-owned
Subsidiary of Parent (“Merger Sub”), and Kos Pharmaceuticals, Inc., a Florida corporation
(the “Company”), are, concurrently with the execution and delivery of this Agreement,
entering into an Agreement and Plan of Merger, dated the date hereof (the “Merger
Agreement”); and
WHEREAS, as of the date hereof, the Shareholders are the beneficial owners (as defined under
Rule 13d-3 of the Exchange Act) of 16,842,555 Shares, as more specifically set forth on the
signature page to this Agreement (the “Existing Shares” and, together with any Shares,
options to purchase Shares or other voting capital stock of the Company acquired by the
Shareholders after the date hereof, the “Shares”); and
WHEREAS, as a condition to its willingness to enter into the Merger Agreement, Parent has
requested that the Shareholders enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements contained herein, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
AGREEMENTS
1.1 Agreement to Tender. The Shareholders agree to accept the Offer with respect to
all the Shares and to tender all the Shares pursuant to the Offer. Such tender shall be made
within ten Business Days of commencement of the Offer. The Shareholders shall not withdraw any
Shares tendered pursuant to the Offer unless this Agreement terminates pursuant to Section 4.1.
Parent or Merger Sub shall pay Shareholders for any Shares tendered in accordance with this Section
1.1 and not withdrawn on the date of acceptance of shares for payment pursuant to the Offer. The
Shareholders agree to permit Parent and Merger Sub to publish and disclose in the Offer Documents
and, if approval of the Company’s shareholders is required under the FBCA, any Proxy Statement
(including all related documents and schedules filed with the SEC)
his, her or its identity and ownership of Shares, the nature of his, her or its commitments,
arrangements and understandings under this Agreement and any other information required by
applicable Law.
1.2 Agreement to Vote. The Shareholders agree that, from and after the date hereof
and until this Agreement terminates pursuant to Section 4.1, at the Shareholders Meeting or any
other meeting of the shareholders of the Company, however called, and at every adjournment or
postponement thereof, or in connection with any written consent of the shareholders of the Company,
relating to any proposed action by the shareholders of the Company with respect to the matters set
forth in Section 1.2(b) below, the Shareholders irrevocably agrees to:
(a) appear at each such meeting or otherwise cause the Shares owned beneficially or of record
by the Shareholders to be counted as present thereat for purposes of calculating a quorum; and
(b) vote (or cause to be voted), in person or by proxy, all the Shares owned by the
Shareholders, and any other voting securities of the Company (whenever acquired), that are owned
beneficially or of record by the Shareholders or as to which they have, directly or indirectly, the
right to vote or direct the voting, (i) in favor of approval of the Merger Agreement and any other
action of the Company’s shareholders requested in furtherance thereof, (ii) against any action or
agreement submitted for approval of the shareholders of the Company that would reasonably be
expected to result in a breach of any covenant, representation or warranty or any other obligation
or agreement of the Company contained in the Merger Agreement or of the Shareholders contained in
this Agreement or of Kos Investments, Inc. under the Stock Purchase Agreement; (iii) against any
action, agreement or transaction submitted for approval to the shareholders of the Company that
would reasonably be expected to materially impede, interfere or be inconsistent with, delay,
postpone, discourage or materially and adversely affect the timely consummation of the Offer or the
Merger; and (iv) against any other action, agreement or transaction submitted for approval to the
shareholders of the Company that would constitute an Acquisition Proposal.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Shareholders. The Shareholders jointly and
severally hereby represent and warrant to Parent as follows:
(a) Authorization; Validity of Agreement; Necessary Action. Each Shareholder has full
power and authority to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. Each of the persons executing this Agreement on behalf of the Shareholder has
full power and authority to execute and deliver this Agreement on behalf of such Shareholder and to
thereby bind such Shareholder. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all necessary action
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(corporate or otherwise) on the part of each Shareholder. This Agreement has been duly
executed and delivered by the Shareholders and constitutes a valid and binding obligation of the
Shareholders, enforceable in accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and to general equity principles). If Shareholder is married and the Shares set
forth on the signature page hereto constitute community property under applicable laws, this
Agreement has been duly authorized, executed and delivered by, and constitutes the valid and
binding agreement of, Shareholder’s spouse.
(b) Ownership. As of the date hereof, the number of shares of the Company Common
Stock beneficially owned (as defined under Rule 13d-3 of the Exchange Act) by each Shareholder is
set forth opposite such Shareholder’s name on the signature page to this Agreement. The Existing
Shares are, and (except as otherwise expressly permitted by this Agreement) any additional shares
of Company Common Stock and any options to purchase shares of Company Common Stock acquired by the
Shareholders after the date hereof and prior to the Effective Time will be, owned beneficially by
the Shareholders. As of the date hereof, the Existing Shares constitute all of the shares of
Company Common Stock held of record, beneficially owned by or for which voting power or disposition
power is held or shared by the Shareholders. The Shareholders have and (except as otherwise
expressly permitted by this Agreement) will have at all times through the Effective Time sole
voting power, sole power of disposition, sole power to issue instructions with respect to the
matters set forth in Article I or Section 3.1 hereof, and sole right, power and authority to agree
to all of the matters set forth in this Agreement, in each case with respect to all of the Existing
Shares and with respect to all of the Shares at the Effective Time, with no limitations,
qualifications or restrictions on such rights, subject to applicable federal securities laws and
the terms of this Agreement and subject to the agreement among the Shareholders with respect to the
voting of certain of the Shares, which agreement shall not prevent or impede the performance by any
Shareholder or any of its obligations hereunder. The Shareholders have good and valid title to the
Existing Shares, free and clear of any Liens (other than Liens permitted by Section 3.2 of this
Agreement (the “MJ Liens”)) and the Shareholders will have good and valid title to such
Existing Shares and any additional shares of Company Common Stock and options to purchase shares of
Company Common Stock acquired by the Shareholders after the date hereof and prior to the Effective
Time, free and clear of any Liens (other than the MJ Liens). Each Shareholder further represents
that any proxies heretofore given in respect of the Shares owned beneficially and of record by such
Shareholder, if any, are revocable, and hereby revokes such proxies.
(c) No Violation. The execution and delivery of this Agreement by the Shareholders
does not, and the performance by the Shareholders of their obligations under this Agreement will
not, (i) conflict with or violate any Law applicable to the Shareholders or by which any of their
assets or properties is bound or (ii) conflict with, result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or cancellation of, or require
payment under, or result in the creation of any Lien on the properties or assets of the
Shareholders pursuant to, any note,
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bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which any of the Shareholders is a party or by which the Shareholders
or any of their assets or properties is bound, except for any of the foregoing as could not
reasonably be expected, either individually or in the aggregate, to materially impair the ability
of the Shareholders to perform their obligations hereunder or to consummate the transactions
contemplated hereby on a timely basis. The execution and delivery of this Agreement by the
Shareholders do not, and the performance of this Agreement by the Shareholders will not, require
any consent, approval, authorization or permit of, or filing with or notification to any (i)
Governmental Entity, except for filings that may be required under the Exchange Act and the HSR Act
or (ii) third party (including with respect to individuals, any spouse, and with respect to trusts,
any co-trustee or beneficiary).
(d) Information. None of the information relating to the Shareholders provided by or on
behalf of the Shareholders for inclusion in the Offer Documents, the Schedule 14D-9 or any Proxy
Statement will, at the respective times such documents are filed with the SEC or are first
published, sent or given to shareholders of the Company, contain any untrue statement of material
fact or omit to state any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading.
(e) Reliance. The Shareholders understand and acknowledge that Parent is entering
into the Merger Agreement and the Stock Purchase Agreement in reliance upon the Shareholders’
execution and delivery of this Agreement.
ARTICLE III
OTHER COVENANTS
3.1 Further Agreements of Shareholders. (a) The Shareholders hereby agree, while
this Agreement is in effect, and except as expressly contemplated hereby, not to, directly or
indirectly (i) grant any proxies or enter into any voting trust or other agreement or arrangement
with respect to the voting of any Shares or (ii) sell, transfer, pledge, encumber, assign,
distribute, gift or otherwise dispose of (including by operation of law, other than by death of any
person) (collectively, a “Transfer”) or enter into any contract, option or other
arrangement or understanding with respect to any Transfer (whether by actual disposition or
effective economic disposition due to hedging, cash settlement or otherwise) of, any of the
Existing Shares, any additional shares of Company Common Stock and options to purchase shares of
Company Common Stock acquired beneficially or of record by the Shareholders after the date hereof,
or any interest therein. The Shareholders shall not seek or solicit any such Transfer or any such
contract, option or other arrangement or understanding with respect to any Transfer, and shall
promptly notify (and provide information reasonably requested by) Parent, if any Shareholder shall
be approached or solicited, directly or indirectly, by any Person with respect to any of the
foregoing. Notwithstanding the foregoing, nothing contained in this Section 3.1(a) shall restrict
the Shareholders from making Transfers to effect estate planning and gifts so long as the
transferee in such Transfer shall execute an agreement to be bound by the terms of
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this Agreement and such Transfer shall not result in the incurrence of any Lien upon any
Shares.
(b) In case of a stock dividend or distribution, or any change in Company Common Stock by
reason of any stock dividend or distribution, split-up, recapitalization, combination, exchange of
shares or the like, the term “Shares” shall be deemed to refer to and include the Shares as well as
all such stock dividends and distributions and any securities into which or for which any or all of
the Shares may be changed or exchanged or which are received in such transaction.
(c) The Shareholders agree, while this Agreement is in effect, to notify Parent promptly in
writing of the number of any additional shares of Company Common Stock, any options to purchase
shares of Company Common Stock or other securities of the Company acquired by the Shareholders, if
any, after the date hereof.
(d) The Shareholders agree, while this Agreement is in effect, (i) not to take, agree or
commit to take any action that would reasonably be expected to make any representation and warranty
of the Shareholders, as applicable, contained in this Agreement inaccurate in any respect as of any
time during the term of this Agreement or (ii) to take all reasonable action necessary to prevent
any such representation or warranty from being inaccurate in any respect at any such time. The
Shareholders further agree that they shall fully cooperate with Parent, as and to the extent
reasonably requested by Parent, to effect the transactions contemplated hereby including the Offer
and the Merger.
(e) The Shareholders agree that they shall not, and shall ensure that their agents and
representatives shall not, (i) directly or indirectly, initiate, solicit, or knowingly, encourage
or facilitate (including by way of furnishing information) any inquiries or the making of any
proposal or offer with respect to an Acquisition Proposal, (ii) directly or indirectly, engage in
any negotiations or discussions concerning, or provide access to its properties, or furnish or
provide access to its books and records or any confidential information or data to, any Person
relating to an Acquisition Proposal or (iii) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage any effort or attempt by any other Person to do or seek any
of the foregoing; provided, however, that the Shareholders may (x) provide access
or furnish information with respect to the Company and its Subsidiaries to any Person making an
Acquisition Proposal (and its representatives) if at such time the Company is permitted to do so
pursuant to a confidentiality agreement in accordance with Section 6.4 of the Merger Agreement and
(y) engage in discussions or negotiations with the Person making an Acquisition Proposal (and its
representatives) regarding such Acquisition Proposal if at such time the Company is permitted to
engage in, and is actually engaged in, discussions or negotiations with such Person regarding such
an Acquisition Proposal. The Shareholders will, and will cause their respective agents and
representatives to, immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect to any Acquisition
Proposal. The Shareholders shall also promptly (within 24 hours) notify Parent of the receipt of
any Acquisition Proposal or any inquiry, proposal or offer that is reasonably likely to lead to an
Acquisition Proposal after the date hereof, which notice shall include
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the identity of the Person making such Acquisition Proposal or other inquiry, proposal or
offer and the material terms and conditions thereof, and will keep Parent promptly and reasonably
apprised of any related material developments, discussions and negotiations related thereto.
(f) The Shareholders agree that, immediately following the consummation of the Offer, the
agreements listed below shall terminate, the Shareholders shall be deemed to have exercised the
Non-Detachable Common Stock Purchase Warrant (referenced in (iii) below) and the related exercise
price shall be deemed to have been paid through the conversion of the amount of principal or
interest outstanding under any Note issued under the Revolving Credit and Loan Agreement
(referenced in (ii) below), as result of which such Non-Detachable Common Stock Purchase Warrant
shall become entitled to receive the consideration then set forth in the Merger Agreement.
(i) The Third Amended and Restated Registration Rights Agreement by and among Kos
Pharmaceuticals, Inc., Kos Holdings, Inc., Kos Investments, Inc. and Xxxxxxx Xxxxxxx, dated as of
December 19, 2002.
(ii) The Revolving Credit and Loan Agreement by and between Kos Pharmaceuticals, Inc. and
Xxxxxxx Xxxxxxx, dated as of December 19, 2002.
(iii) The Non-Detachable Common Stock Purchase Warrant by and between Kos Pharmaceuticals,
Inc. and Xxxxxxx Xxxxxxx, dated December 19, 2002.
(iv) The Second Amended and Restated Security Agreement by and between Kos Pharmaceuticals,
Inc. and Xxxxxxx Xxxxxxx, dated as of December 19, 2002.
(v) The Second Amended and Restated Patent, Trademark and License Security Agreement by and
between Kos Pharmaceuticals, Inc. and Xxxxxxx Xxxxxxx, dated as of December 19, 2002.
(vi) Second Amended and Restated Subsidiary Guaranty by and between Aeropharm and Xxxxxxx
Xxxxxxx, dated as of December 19, 2002.
(vii) Second Amended and Restated Subsidiary Security Agreement by and between Aeropharm and
Xxxxxxx Xxxxxxx, dated as of December 19, 2002.
(viii) Second Amended and Restated Stock Pledge Agreement by and between Kos Pharmaceuticals,
Inc. and Xxxxxxx Xxxxxxx, dated as of December 19, 2002.
(ix) Amended and Restated Stock Pledge Agreement by and between Aeropharm and Xxxxxxx Xxxxxxx,
dated as of December 19, 2002.
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(x) Amended and Restated Subsidiary Security Agreement by and between IEP Pharmaceutical
Devices, Inc. and Xxxxxxx Xxxxxxx, dated as of December 19, 2002.
(xi) Amended and Restated Subsidiary Guaranty by and between Aeropharm and Xxxxxxx Xxxxxxx,
dated as of December 19, 2002.
(g) Each Shareholder hereby consents to and approves the actions taken by the Board of
Directors of the Company in approving the Merger Agreement, the Offer, the Merger and the other
transactions contemplated by the Merger Agreement. Each Shareholder hereby waives, and agrees not
to exercise or assert, if applicable, any appraisal rights under Section 607.1323 through 607.1331
of the FBCA in connection with the Merger.
3.2 Permitted Transactions. The Shareholders may Transfer Shares to other
Shareholders, to a legal entity controlled by a Shareholder or to a trust for the benefit of a
Shareholder; provided that such legal entity or trust shall execute an agreement to be bound by the
terms of this Agreement and such Transfer shall not result in the incurrence of any Lien upon any
Shares. In addition, if Xxxx Xxxxxxx and/or Xxxxxxx Xxxxxxx die prior to the termination of this
Agreement, the Shareholders shall be entitled at any time thereafter to sell Shares and any other
shares and options subject to this Agreement in such manner as may be necessary to fund all related
estate and income taxes.
3.3 Indemnity. Without limiting any additional rights that any Shareholder may have
under any agreement, Parent shall indemnify and hold harmless each Shareholder (and each officer,
director, member, trustee and agent of a Shareholder) (the “Indemnified Parties”), against
all claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs
and expenses, including attorneys’ fees and disbursements, incurred in connection with any
proceeding, whether civil, criminal, administrative or investigative, arising out of or pertaining
to this Agreement and the transactions contemplated hereby, whether asserted or claimed prior to,
at or after the termination of this Agreement, to the fullest extent permitted under applicable
Law. In the event of any such proceeding, each Indemnified Party will be entitled to advancement
from Parent of expenses incurred in the defense of any proceeding within ten business days of
receipt by Parent from the Indemnified Party of a request therefore. Parent may, at its option,
assume the defense of the Indemnified Party, with counsel reasonably satisfactory to the
Indemnified Party. After notice from Parent of its election to assume the defense of the
Indemnified Party, Parent will not be liable to the Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by the Indemnified Party in connection with its
defense. No Indemnified Party shall settle, compromise or consent to the entry of any judgment in
any actual or threatened proceeding (and in which indemnification could be sought by such
Indemnified Party hereunder) without the prior written consent of Parent.
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3.4 Alternative Transaction Payment.
(a) If the Board of Directors of the Company has effected an Adverse Recommendation Change and
the Merger Agreement is subsequently terminated pursuant to Section 8.1(h) thereof and, further, if
within twelve months after the termination of the Merger Agreement, the Company, any Shareholder or
any of their respective Affiliates enters into a definitive agreement for or consummates an
Acquisition Proposal or Superior Proposal with a Person other than Parent or any of Parent’s
Affiliates (an “Alternative Disposition”), then, upon the closing of such Alternative
Disposition, each Shareholder shall tender and pay to, or shall cause to be tendered and paid to,
Parent, or its designee, in immediately available funds, 50% of the Excess Profit realized by such
Shareholder from such Alternative Disposition.
(b) If the Merger Agreement is terminated pursuant to Section 8.1(e) as a result of a breach
following an Adverse Recommendation Change or receipt or public disclosure of a bona fide
Acquisition Proposal after the date of the Merger Agreement and, further, if within twelve months
after the termination of the Merger Agreement, the Company or any of its Affiliates enters into a
definitive agreement for or consummates an Acquisition Proposal or Superior Proposal, then, upon
the closing of such Acquisition Proposal or Superior Proposal, each Shareholder shall tender and
pay to, or shall cause to be tendered and paid to, Parent, or its designee, in immediately
available funds, 50% of the Excess Profit realized by such Shareholder from such Alternative
Disposition
(c) If the Merger Agreement is terminated pursuant to Section 8.1(g) thereof and, further, if
within twelve months after the termination date, the Company, any Shareholder or any of their
respective Affiliates effects an Alternative Disposition, then, upon the closing of such
Alternative Disposition, each Shareholder shall tender and pay to, or shall cause to be tendered
and paid to, Parent, or its designee, in immediately available funds, 50% of the Excess Profit
realized by such Shareholder from such Alternative Disposition.
(d) If, after the date of this Agreement, Parent agrees with the Company to increase the
amount of the Merger Consideration to be paid by Parent and the Shares are Transferred to Parent
pursuant to the Offer (an “Increased Offer”), upon the closing of the Increased Offer each
Shareholder shall tender and pay to, or shall cause to be tendered and paid to, Parent or its
designee, in immediately available funds, 50% of the Excess Profit realized by such Shareholder, if
any.
(e) For purposes of this Section 3.4, “Acquisition Proposal” shall having the meaning
set forth in the Merger Agreement, except that in each instance where 15% occurs, 50% shall be
substituted therefor.
(f) For purposes of this Section 3.4, “Excess Profit” of a Shareholder shall equal, if
positive, (i) the aggregate consideration received by the Shareholder,
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directly or indirectly, in respect of the Transfer of such Shareholder’s Shares pursuant to an
Alternative Disposition or Increased Offer, valuing any non-cash consideration (including any
residual interest in the Company retained immediately following such transaction whether
represented by Company Common Stock or other securities of the Company to the extent that the
Company has engaged in a spin-off, recapitalization or similar transaction) at its fair market
value as of the date of consummation, less (ii) the product obtained by multiplying $78.00 by the
number of Shares Transferred by the Shareholder in that Transfer pursuant to such Alternative
Disposition or Increased Offer. For purposes of calculating “Profit”, all deferred payments or
consideration, which shall be discounted at a market rate to reflect net present value, and all
contingent payments will be assumed to have been paid, in each case, as of the date of
consummation.
(i) The fair market value of any non-cash consideration consisting of (A) securities listed on
a national securities exchange or traded on the Nasdaq shall be equal to the average of the closing
prices per share of such security as reported on such exchange or Nasdaq for each of the five
trading days prior to the date of determination; and (B) property other than cash or securities of
the type described in subclause (A) shall be the amount that a reasonable, willing buyer would pay
to a reasonable, willing seller, taking into account the nature and terms of such property. In the
event of a dispute as to the fair market value of such property, such disputed amounts shall be
determined by a nationally recognized independent investment banking firm mutually agreed upon by
the parties within five Business Days of the event requiring such selection. The determination
made by such investment banking firm shall be final and binding on the parties and Parent, on the
one hand, and the Shareholders (on a pro rata basis), on the other hand, shall each pay one-half of
the expenses in connection with such determinations.
(ii) In the event that the Company shall declare and pay a stock or extraordinary dividend or
other distribution, or effect a stock split, reverse stock split, reclassification, reorganization,
recapitalization, combination or other like change with respect to shares of Company Common Stock,
the calculation set forth in this Section 3.4 shall be adjusted to reflect fully such dividend,
distribution, stock split, reverse stock split, reclassification, reorganization, recapitalization,
combination or other like change and the value of any such dividend, distribution, stock split,
reclassification, reorganization, recapitalization, combination (including any residual interest in
the Company whether represented by Company Common Stock or other securities of the Company to the
extent that the Company has engaged in a spin-off, recapitalization or similar transaction) shall
be considered in determining the Excess Profit as provided in this Section 3.4, in each case, to
the extent not previously adjusted pursuant to Section 3.1(b).
(g) Any payment to be made under this Section 3.4 shall be paid in cash, by wire transfer of
same day funds, to an account designated by Parent.
(h) Solely for the avoidance of doubt, the defined term “Shares” as used in this Agreement,
including for purposes of the calculation of any “Excess Profit”, shall not include any shares of
capital stock of the Company that is not beneficially
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owned by a Shareholder, including the shares of capital stock of the Company held directly or
indirectly by Kos Investments, Inc, and that are included within the definition of “Company Common
Stock” for purposes of the Stock Purchase Agreement of even date herewith among Kos Investments
Inc, Kos Holdings, Inc., Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxx, and Xxxxxx
Xxxxxxx.
ARTICLE IV
MISCELLANEOUS
4.1 Termination. This Agreement shall terminate automatically, without any action on
the part of any party hereto, upon the earlier to occur of (a) the Effective Time and (b) the
termination of the Merger Agreement pursuant to its terms. Upon such termination, no party shall
have any further obligations or liabilities hereunder except that (i) the obligations of the
Shareholders under Section 3.4 and this Article IV shall survive termination and (ii) such
termination shall not relieve any party from liability for any willful breach of this Agreement
prior to such termination.
4.2 No Ownership Interest. Nothing contained in this Agreement shall be deemed to
vest in Parent any direct or indirect ownership or incidence of ownership of or with respect to any
Shares. All rights, ownership and economic benefits of and relating to the Shares shall remain
vested in and belong to the Shareholders, and Parent shall have no authority to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or operations of the
Company or exercise any power or authority to direct the Shareholders in the voting of any of the
Shares, except as otherwise provided herein.
4.3 Shareholder Capacity. No person executing this Agreement, or any officer,
director, partner, employee, agent or representative of such Person, who is or becomes during the
term of this Agreement a director or officer of the Company shall be deemed to make any agreement
or understanding in this Agreement in such Person’s capacity as a director or officer. Each
Shareholder is entering into this Agreement solely in his capacity as the record holder or
beneficial owner of, or the trustee of a trust whose beneficiaries are the beneficial owners of,
such Shareholder’s Shares and nothing herein shall limit or affect any actions taken by a
Shareholder in his capacity as a director or officer of the Company.
4.4 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by facsimile or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
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if to Parent to:
| Xxxxxx Laboratories 000 Xxxxxx Xxxx Xxxx Xxxxxx Xxxx, Xxxxxxxx 00000 Attention: President, Pharmaceutical Products Division Facsimile: 000-000-0000 |
with an additional copies (which shall not constitute notice) to:
| Xxxxxx Laboratories 100 Xxxxxx Xxxx Xxxx Xxxxxx Xxxx, Xxxxxxxx 00000 Xttention: Senior Vice President, General Counsel and Secretary Facsimile: 000-000-0000 Xxxxxxxxx & Xxxxxxx LLP 1300 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000 Xttention: Xxxxx X. Xxxxx Facsimile: 000-000-0000 |
if to the Company:
| Kos Pharmaceuticals, Inc. 1 Xxxxx Xxxxx Xxxxx Xxxxxxxx, XX 00000 Xttention: Xxxxxx X. Xxxxx Executive Vice President, General Counsel and Corporate Secretary Facsimile: 000-000-0000 |
with additional copies (which shall not constitute notice) to:
| Cravath, Swaine & Xxxxx LLP Worldwide Plaza 820 Xxxxxx Xxxxxx Xxx Xxxx, XX 00000 Xttention: Xxxxxx Xxxxxxxx Facsimile: 212-474-3700 Holland & Knight LLP 190 Xxxxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Xttention: Xxxxxx Xxxxxxx Facsimile: 000-000-0000 |
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if to the Shareholders:
| c/o Xxxxxx X. Xxxxxxx, P.C. 490 Xxxx Xxxxxx, 0xx Xxxxx Xxx Xxxx, XX 00000 Xttention: Xxxxxx X. Xxxxxxx, Esq. Xxxxx Xxxxxxxxx, Esq. Facsimile: (000) 000-0000 Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP 1100 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000 Xttention: Xxxxxx X. Xxxxxxxx Facsimile: 000-000-0000 |
4.5 Interpretation. When a reference is made in this Agreement to an Article,
Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit
or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words “include”, “includes”, “including”
or “such as” are used in this Agreement, they shall be deemed to be followed by the words “without
limitation”. The word “will” shall be construed to have the same meaning and effect as the word
“shall.” The words “hereof”, “herein” and “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement. The word “or” shall not be exclusive. The word “extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends, and such phrase shall not mean
simply “if”. The phrase “date hereof” or “date of this Agreement” shall be deemed to refer to
November 5, 2006. Whenever used in this Agreement, any noun or pronoun shall be deemed to include
the plural as well as the singular and to cover all genders. This Agreement shall be construed
without regard to any presumption or rule requiring construction or interpretation against the
party drafting or causing any instrument to be drafted. Any Contract, instrument or Law defined or
referred to herein or in any Contract or instrument that is referred to herein means such Contract,
instrument or Law as from time to time amended, modified or supplemented, including (in the case of
Contracts or instruments) by waiver or consent and (in the case of Law) by succession of comparable
successor Law and references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
4.6 Counterparts. This Agreement may be executed and delivered (including by
facsimile transmission) in one or more counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both parties need not sign
the same counterpart.
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4.7 Entire Agreement. This Agreement (together with the Merger Agreement) constitutes
the entire agreement and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
4.8 Governing Law. Except to the extent that the FBCA is applicable, this Agreement
shall be governed by, and construed in accordance with, the laws of the State of Delaware (without
giving effect to choice of law principles thereof). Each of the parties hereto agrees that this
Agreement (a) involves at least $100,000.00 and (b) has been entered into by the parties hereto in
express reliance upon 6 Del. C. § 2708.
4.9 Specific Performance; Jurisdiction. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is accordingly agreed that in
the event of a breach or threatened breach of this Agreement, the other parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the Court of Chancery of the State of
Delaware or, if under applicable law exclusive jurisdiction over such matter is vested in the
federal courts, any court of the United States located in the State of Delaware, this being in
addition to any other remedy to which they are entitled at law or in equity. Each party hereto
irrevocably waives any defenses based on adequacy of any other remedy, whether at law or in equity,
that might be asserted as a bar to the remedy of specific performance of any of the terms or
provisions hereof or injunctive relief in any action brought therefor by any other party hereto.
In addition, each of the parties hereto (i) irrevocably submits itself to the personal jurisdiction
of the Court of Chancery of the State of Delaware or any court of the United States located in the
State of Delaware in the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that
it will not bring any action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than the Court of Chancery of the State of Delaware or, if under
applicable law exclusive jurisdiction over such matter is vested in the federal courts, any court
of the United States located in the State of Delaware and (iv) consents to service being made
through the notice procedures set forth in Section 4.4. Each of the parties hereby agrees that
service of any process, summons, notice or document by U.S. registered mail to the respective
addresses set forth in Section 4.4 shall be effective service of process for any Proceeding in
connection with this Agreement or the transactions contemplated hereby.
4.10 Amendment. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
4.11 Enforcement. The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms. It is accordingly agreed that the parties shall be entitled to seek specific performance of
the terms hereof, this being in addition to injunctive relief and any other remedy to which they
are entitled at law or in equity. Each
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of the parties further agrees to waive any requirements for the securing or posting of any
bond in connection with obtaining any such equitable relief.
4.12 Severability. Any term or provision of this Agreement that is determined by a
court of competent jurisdiction to be invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction, and if any provision of this Agreement is determined to be so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is enforceable, in all
cases so long as neither the economic nor legal substance of the transactions contemplated hereby
is affected in any manner materially adverse to any party or its shareholders or limited partners.
4.13 Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the
rights, interests or obligations of any party hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written consent of the other
party. Any purported assignment without such consent shall be void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and permitted assigns. Each Shareholder agrees that this
Agreement and the obligations hereunder shall attach to such Shareholder’s Shares and shall be
binding upon any Person to whom legal or beneficial ownership of such Shares shall pass, whether by
operation of law or otherwise, including such Shareholder’s heirs, guardians, administrators or
successors. This Agreement is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
4.14 No Waiver. The terms and provisions hereof may not be waived except by an
instrument signed on behalf of the party waiving compliance. The failure of any party to exercise
any right, power or remedy provided under this Agreement or otherwise available in respect of this
Agreement at law or in equity, or to insist upon compliance by any other party with its obligations
under this Agreement, and any custom or practice of the parties at variance with the terms of this
Agreement, shall not constitute a waiver by such party of such party’s right to exercise any such
or other right, power or remedy or demand such compliance.
4.15 Consents and Waivers. The Shareholders hereby give any consents or waivers that
are reasonably required for the consummation of the Merger under the terms of any agreements to
which any Shareholder is a party or pursuant to any rights the Shareholders may have.
4.16 Further Assurances. Subject to the terms and conditions of this Agreement, the
Shareholders shall use their reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary to fulfill such Shareholder’s obligations
under this Agreement.
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4.17 Legends. Each Shareholder shall cause the Shares to bear a legend, stating that
they are subject to the terms of this Agreement.
[Remainder of Page Left Blank Intentionally]
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IN WITNESS WHEREOF, Parent and Shareholders have caused this Agreement to be executed as
of the date first written above by their respective officers thereunto duly authorized.
| XXXXXX LABORATORIES, |
||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Senior Vice President, Pharmaceutical Operations | |||
| /s/ Xxxxxxx Xxxxxxx | ||||
| Xxxxxxx Xxxxxxx | ||||
| Shares: 5,316,650 | ||||
| XXXXXXX AND XXXX XXXXXXX ALASKA COMMUNITY PROPERTY TRUST, |
||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Trustee | |||
| Shares: | 1 | |||
| /s/ Xxxx Xxxxxxx | ||||
| Xxxx Xxxxxxx | ||||
| Shares: 1,400,000 | ||||
| JAHARIS HOLDINGS, LLC, |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Manager | |||
| Shares: | 2,000,000 | |||
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| /s/ Xxxxxxx Xxxxxxx | |||||
| Xxxxxxx Xxxxxxx | |||||
| Shares: 165,875 | |||||
| THE JAHARIS FAMILY FOUNDATION, INC., |
|||||
| By: | /s/ Xxxxxxx Xxxxxxx | ||||
| Name: | Xxxxxxx Xxxxxxx | ||||
| Title: | President | ||||
| Shares: | 2,844,410 | ||||
| XXXXXXX XXXXXXX AND XXXXXXX XXXXX JOINT ACCOUNT, |
|||||
| By: | /s/ Xxxxxxx Xxxxxxx | ||||
| Name: | Xxxxxxx Xxxxxxx | ||||
| Title: | Owner | ||||
| Shares: | 350 | ||||
| By: | /s/ Xxxxxxx Xxxxx | ||||
| Name: | Xxxxxxx Xxxxx | ||||
| Title: | Owner | ||||
| Shares: | 350 | ||||
| /s/ Xxxxxx Xxxxxxx | |||||
| Xxxxxx Xxxxxxx | |||||
| Shares: 127,423 | |||||
| XXXXXX POINT HOLDINGS, LP, |
|||||
| By: | /s/ Xxxxxx Xxxxxxx | ||||
| Name: | Xxxxxx Xxxxxxx | ||||
| Title: | Manager of the General Partner | ||||
| Shares: | 3,841,649 | ||||
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| CUBS MANAGEMENT, LLC, |
|||||
| By: | /s/ Xxxxxx Xxxxxxx | ||||
| Name: | Xxxxxx Xxxxxxx | ||||
| Title: | Manager | ||||
| Shares: | Not applicable | ||||
| XXXXXX XXXXXXX GENERATIONAL TRUST, |
|||||
| By: | /s/ Xxxxxx Xxxxxxx | ||||
| Name: | Xxxxxx Xxxxxxx | ||||
| Title: | Trustee | ||||
| Shares: | 68,453 | ||||
| 2002 XXXX XXXXXXX GRANTOR RETAINED ANNUITY TRUST 2, |
|||||
| By: | /s/ Xxxxxx X. Xxxxxxx | ||||
| Name: | Xxxxxx X. Xxxxxxx | ||||
| Title: | Trustee | ||||
| Shares: | 156,183 | ||||
| XXXXXXX XXXXXX XXXXXXX TRUST 1, |
|||||
| By: | /s/ Xxxxxx X. Xxxxxxx | ||||
| Name: | Xxxxxx X. Xxxxxxx | ||||
| Title: | Trustee | ||||
| Shares: | 100 | ||||
| KOS INVESTMENTS, INC., |
|||||
| By: | /s/ Xxxxxxx Xxxxxxx | ||||
| Name: | Xxxxxxx Xxxxxxx | ||||
| Title: | President | ||||
| Shares: | Not applicable | ||||
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| KOS HOLDINGS, INC., |
|||||
| By: | /s/ Xxxxxxx Xxxxxxx | ||||
| Name: | Xxxxxxx Xxxxxxx | ||||
| Title: | President | ||||
| Shares: | Not applicable | ||||
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