EXHIBIT 10.16
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as
of December 20, 2002, by and between HALSEY DRUG CO., INC., a New York
corporation (the "Company") and the investors listed on Schedule 1 attached
hereto (each an "Investor"; collectively, the "Investors").
WHEREAS, the Company and certain purchasers are parties to
that certain Debenture and Warrant Purchase Agreement dated March 10, 1998 (as
such agreement may be supplemented, amended, or otherwise modified from time to
time, the "1998 Purchase Agreement"), whereby the Company issued to such parties
the Company's 5% convertible secured debentures due March 15, 2003 (as such
debentures may be supplemented, amended, or otherwise modified from time to
time, the "1998 Debentures"; each such holder of 1998 Debentures, or any
permitted successor, assign or transferee thereof, a "1998 Holder") and warrants
to purchase Common Stock (the "1998 Warrants");
WHEREAS, in connection with the 1998 Purchase Agreement, the
Company granted to the 1998 Holders registration rights as set forth in Article
XI of the 1998 Purchase Agreement;
WHEREAS, the Company and certain purchasers are parties to
that certain Debenture and Warrant Purchase Agreement dated May 26, 1999 (as
such agreement may be supplemented, amended, or otherwise modified from time to
time, the "1999 Purchase Agreement"), whereby the Company issued to such parties
the Company's 5% convertible secured debentures due March 15, 2003 (as such
debentures may be supplemented, amended, or otherwise modified from time to
time, the "1999 Debentures"; each such holder of 1999 Debentures, or any
permitted successor, assign or transferee thereof, a "1999 Holder") and warrants
to purchase Common Stock (the "1999 Warrants");
WHEREAS, in connection with the 1999 Purchase Agreement, the
Company granted to the 1999 Holders registration rights as set forth in Article
XI of the 1999 Purchase Agreement;
WHEREAS, in connection with the Bridge Loan Agreements, Galen
Partners III, L.P., Galen Partners International III, L.P. and Galen Employee
Fund III, L.P. (collectively, "Galen") holds warrants to purchase an aggregate
of 5,385,229 shares of the Company's common stock, $.01 par value per share (the
"Common Stock") as more particularly described on Schedule 2 hereof (the "Bridge
Loan Warrants");
WHEREAS, the Company and Watson Pharmaceuticals, Inc.
("Watson") are parties to that certain Loan Agreement, dated as of March 29,
2000, as amended by a certain Amendment to Loan Agreement dated as of March 31,
2000 (as so amended, the "Loan Agreement");
WHEREAS, in consideration of further amending the Loan
Agreement to, among other things, extend the maturity date of the loan by
execution of a Second Amendment to the Loan Agreement dated as of December __,
2002, simultaneously with the execution of this Agreement, the Company will
issue to Watson a warrant (the "Watson Warrant") to purchase 10,700,665 shares
of the Common Stock;
WHEREAS, in connection with the 2002 Purchase Agreement, all
of the holders (except Galen) (the "Recap Shareholders") of the 1998 Warrants
and the 1999 Warrants have entered into an agreement (the "Recapitalization
Agreement"), dated the date hereof, to recapitalize their interests in the
Company by, inter alia, exchanging their respective warrants for shares of
Common Stock (the "Recap Shares");
WHEREAS, the Company and certain purchasers are parties to
that certain Debenture Purchase Agreement, dated the date hereof (as such
agreement may be supplemented, amended, or otherwise modified from time to time,
the "2002 Purchase Agreement"), whereby the Company issued to such parties the
Company's 5% convertible senior secured debentures due March 31, 2006 (as such
debentures may be supplemented, amended, or otherwise modified from time to
time, the "2002 Debentures"; each such holder of 2002 Debentures, or any
permitted successor, assign or transferee thereof, a "2002 Holder");
WHEREAS, in connection with the 2002 Purchase Agreement, the
Company has agreed to grant to the 2002 Holders registration rights as set forth
in this Agreement;
WHEREAS, the 1998 Holders desire to terminate the
registration rights provisions of the 1998 Purchase Agreement, the 1999 Holders
desire to terminate the registration rights provisions of the 1999 Purchase
Agreement, the holders of the 1998 Warrants desire to terminate the registration
rights applicable to the 1998 Warrants, the holders of the 1999 Warrants desire
to terminate the registration rights applicable to the 1999 Warrants, and Galen
desires to terminate the registration rights applicable to the Bridge Loan
Warrants and such parties desire to enter into this Agreement in lieu therefor
to provide for generally applicable registration rights for all such parties, to
the extent applicable, and to Watson and the 2002 Holders;
WHEREAS, the Company desires to grant and Watson, the 1998
Holders, the 1999 Holders, the 2002 Holders, the Recap Shareholders and Galen
desire to obtain, certain registration rights in connection with the Recap
Shares, the Watson Warrant, the 1998 Debentures, the 1999 Debentures, the 1998
Warrants held by Galen, the 1999 Warrants held by Galen, the Bridge Loan
Warrants and the 2002 Debentures (collectively, the "Securities"); and
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WHEREAS, unless otherwise provided in this Agreement,
capitalized terms used herein shall have the meanings set forth in Section 14
hereof.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and promises contained herein, the parties agree as follows:
1. Demand Registrations.
(A) Requests for Registration. The Holders may request registration under
the Securities Act of all or any part of their Registrable Securities as
provided for below in Section 1(b). Within ten days after receipt of any such
request, the Company will give written notice of such requested registration to
all other Holders of Registrable Securities. The Company will include in such
registration all Registrable Securities with respect to which it has received
written requests for inclusion therein within 30 days after receipt of the
Company's notice. The Company shall cause its management to cooperate fully and
to use its best efforts to support the registration of the Registrable
Securities and the sale of the Registrable Securities pursuant to such
registration as promptly as is practicable. Such cooperation shall include, but
not be limited to, management's attendance and reasonable presentations in
respect of the Company at road shows with respect to the offering of Registrable
Securities. The registration requested under this Section 1 is referred to
herein as a "Demand Registration".
(B) Number of Registrations. The Holders of Registrable Securities will be
entitled to request the following number and types of registrations: (i) Galen
shall be entitled to request two Demand Registrations on Form S-1 (or any
successor to such form), (ii) Watson shall be entitled to request two Demand
Registrations on Form S-1 (or any successor to such form), (iii) the Holders of
at least 20% of the Registrable Securities then outstanding shall be entitled to
request one Demand Registration on Form S-1 (or any successor to such form),
provided that all Demand Registrations requested pursuant to subsections (i) and
(ii) above shall be deemed to have occurred prior to the Demand Registration
pursuant to this subsection (iii), and (iv) the Holders of Registrable
Securities will be entitled to unlimited Demand Registrations on Form S-3 (or
any successor to such form), for which the Company will pay all Registration
Expenses. A registration will not count as a Demand Registration (x) until it
has become effective, (y) the Holders have sold, in the aggregate, no less than
50% of the shares of Registrable Securities requested to be registered in the
Demand Registration and (z) if the offering of the Registrable Securities
pursuant to such registration is interfered with for any reason by any stop
order, injunction or other order or requirement of the Commission (other than
any stop order, injunction or other requirement of the Commission prompted by
acts or omissions of Holders of Registrable Securities); provided, however, that
except as otherwise provided herein whether or not it becomes effective the
Company will pay all Registration Expenses in connection with any registration
so initiated.
(C) Priority on Demand Registrations. If a Demand Registration is with
respect to an underwritten offering, and the managing underwriters advise the
Company in writing that in their opinion the number of Registrable Securities
requested to be included exceeds the number which can be sold in such offering,
the Company will include in such registration such number of
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Shares, which in the opinion of such underwriters, may be sold, allocated among
the Holders electing to participate pro rata in accordance with the amounts of
securities requested to be so included by the respective Holders. If the amount
of such Registrable Securities does not exceed the maximum number which can be
sold in such offering, the Company may include such number of securities which
are not Registrable Securities in the Demand Registration which will not,
together with the Holder's Registrable Securities, exceed the maximum number
which can be sold in the Offering; provided, however, the Company will not
include in any Demand Registration any securities which are not Registrable
Securities without the written consent of the Holders of sixty and two-thirds
percent (66 2/3%) of the Registrable Securities participating in such
registration. A registration shall not count as a Demand Registration if less
than fifty percent (50%) of the Shares which any Holder desires to include
therein are not included due to the determination of the managing underwriters
referred to in the first sentence of this Section 1(c).
(D) Restrictions on Demand Registrations. The Company will not be obligated
to effect any Demand Registration within six months after the effective date of
a previous registration in which the Holders of Registrable Securities were
given piggyback rights pursuant to Section 2 other than a registration of
Registrable Securities intended to be offered on a continuous or delayed basis
under Rule 415 or any successor rule under the Securities Act (a "Shelf
Registration").
2. Piggyback Registrations.
(A) Right to Piggyback. Whenever the Company proposes to register any of
its securities under the Securities Act (other than pursuant to a Demand
Registration or pursuant to a registration on Forms S-4 or S-8 or any successors
to such forms) and the registration form to be used may be used for the
registration and contemplated disposition of Registrable Securities (a
"Piggyback Registration"), the Company will give prompt written notice to all
the Holders of Registrable Securities. The Company will include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 30 days after the receipt
of the Company's notice, subject to any other priority cutback provisions below.
(B) Piggyback Expenses. The Registration Expenses of the Holders of
Registrable Securities in such Piggyback Registration will be paid by the
Company.
(C) Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities, pro rata in accordance with the amounts of
Registrable Securities requested to be so included by each Requesting
Stockholder, and (iii) third, any other securities requested to be included in
such registration.
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(D) Priority on Secondary Registrations. If a Piggyback Registration is an
underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering, the Company
will include in such registration (i) first, the securities requested to be
included therein by the holders requesting such registration, (ii) second, the
Registrable Securities, pro rata in accordance with the amounts of Registrable
Securities requested to be so included by each Requesting Stockholder, and (iii)
third, other securities requested to be included in such registration.
(E) Other Restrictions. The Company hereby agrees that if it has previously
filed a registration statement with respect to Registrable Securities pursuant
to Section 1 or pursuant to this Section 2, and if such previous registration
has not been withdrawn or abandoned, the Company will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act except on Form S-8 or any other similar form for employee
benefit plans, whether on its own behalf or at the request of any holder or
holders of such securities, until a period of at least six months has elapsed
from the effective date of such previous registration or, if sooner, until all
Registrable Securities included in such previous registration have been sold.
3. Holdback Agreements.
(A) Holders of Registrable Securities. The Investors and each other Holder
of Registrable Securities who is or becomes a party to this Agreement, agrees
not to effect any public sale or distribution of equity securities of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, during the seven days prior to and the 90-day period beginning
on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration except as part of such underwritten
registration or, if sooner, until all Registrable Securities included within
such registration have been sold.
(B) The Company. The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 90-day period beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration except as part of such
underwritten registration or pursuant to registrations on Form S-8 or any other
similar form for employee benefit plans or, if sooner, until all Registrable
Securities included within such registration have been sold, and (ii) to use its
reasonable best efforts to cause each holder of its equity securities, or any
securities convertible into or exchangeable or exercisable for such securities,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution of any such securities during such period except as part of such
underwritten registration, if otherwise permitted or, if sooner, until all
Registrable Securities included within such registration have been sold;
provided, however, that the provisions of this Section 3(b) shall continue to
apply with respect to a registration until the provisions of Section 3(a) no
longer apply with respect to such registration.
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(C) Registration Procedures. Whenever the Holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to Section
1 or 2 of this Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(i) prepare and file with the Commission a registration
statement with respect to such Registrable Securities, which
registration statement will state that the Holders of Registrable
Securities covered thereby may sell such Registrable Securities either
under such registration statement or, at any Holder's proper request,
pursuant to Rule 144 (or any successor rule under the Securities Act),
and use its best efforts to cause such registration statement to become
effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will
furnish to the counsel selected by (A) Galen, in the event of a Demand
Registration requested pursuant to Section 1(b)(i), (B) Watson, in the
event of a Demand Registration requested pursuant to Section 1(b)(ii),
or (C) the Holders of sixty and two-thirds percent (66 2/3%) of the
Registrable Securities included in such registration, in the event of
any other registration, copies of all such documents proposed to be
filed, which documents will be subject to the review of such counsel);
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such registration
statement effective for the period set forth in Section 4(i) hereof and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;
(iii) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(iv) use its best efforts to register or qualify, if
applicable, such Registrable Securities under such other securities or
blue sky laws of such jurisdictions as any seller reasonably requests
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned
by such seller (provided that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (B) subject
itself to taxation in any such jurisdiction, or (C) consent to general
service of process in any such jurisdiction);
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(v) within one business day of its occurrence, notify
each seller of such Registrable Securities, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits to state any fact necessary to
make the statements therein not misleading, and, at the request of any
such seller, the Company will promptly prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(vi) cause all such Registrable Securities to be listed on
each securities exchange or market on which similar securities issued
by the Company are then listed;
(vii) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement;
(viii) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney,
accountant or other agent retained by any such seller or underwriter,
all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors
and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection
with such registration statement;
(ix) cause the Registrable Securities to be registered on
such appropriate registration form or forms of the Commission as shall
permit a delayed or continuous offering of the Registrable Securities
pursuant to Rule 415 under the Securities Act and permit the
disposition of the Registrable Securities in accordance with the method
or methods of disposition requested by the Holders of sixty-six and
two-thirds percent (66-2/3%) of the Registrable Securities included in
such registration, and keep such registration statement effective until
the Holders of a sixty-six and two-thirds percent (66-2/3%) of
Registrable Securities included in such registration have completed the
sale and distribution of the Registrable Securities;
(x) if such registration is an underwritten registration,
cause the Company's officers, directors and holders of in excess of one
percent of the Company's outstanding Common to execute lock-up
agreements, containing customary terms and provisions, required by an
underwriter in any such registered offering restricting such parties
from selling shares of the Company's Common Stock for a period of up to
180 days; and
(xi) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to Section 1 or 2, if
the method of distribution is by means of an underwriting, on the date
that the shares of Registrable Securities are delivered to the
underwriters for sale pursuant to such registration, or if such
Registrable Securities are not being sold through underwriters, on the
date that the registration statement with
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respect to such shares of Registrable Securities becomes effective, (A)
a signed opinion, dated such date, of the independent legal counsel
representing the Company for the purpose of such registration,
addressed to the underwriters, if any, and if such Registrable
Securities are not being sold through underwriters, then to the Holders
making such request, as to such matters as such underwriters or the
Holders holding a majority of the Registrable Securities included in
such registration, as the case may be, may reasonably request; and (B)
letters dated such date and the date the offering is priced from the
independent certified public accountants of the Company, addressed to
the underwriters, if any, and if such Registrable Securities are not
being sold through underwriters, then to the Holders making such
request (x) stating that they are independent certified public
accountants within the meaning of the Act and that, in the opinion of
such accountants, the financial statements and other financial data of
the Company included in the Registration Statement or the prospectus,
or any amendment or supplement thereto, comply as to form in all
material respects with the applicable accounting requirements of the
Act and (y) covering such other financial matters (including
information as to the period ending not more than five business days
prior to the date of such letters) with respect to the registration in
respect of which such letter is being given as such underwriters or the
Holders holding a majority of the Registrable Securities included in
such registration, as the case may be, may reasonably request and as
would be customary in such a transaction.
4. Registration Expenses. All Registration Expenses incurred in connection
with a registration, qualification or compliance pursuant to this Agreement
shall be borne by the Company, and all Selling Expenses shall be borne by the
Holders, the Requesting Stockholders and any other holders of the securities so
registered pro rata on the basis of the number of their shares so registered;
provided, however, that the Company shall not be required to pay any
Registration Expenses if, as a result of the withdrawal of a request for
registration by a majority of Registrable Securities (other than as a result of
any failure of the Company to comply with the terms of this Agreement, or the
disclosure of any adverse development relating to the Company after the initial
request for registration by any Holder), the registration statement does not
become effective, in which case the Holders and Requesting Stockholders
requesting registration shall bear such Registration Expenses pro rata on the
basis of the number of their shares so included in the registration request,
and, further, that such registration shall not be counted as a Demand
Registration pursuant to Section 1.
5. Indemnification.
(A) The Company will indemnify each Holder, each Holder's officers,
directors, employees, agents, members and partners, and each Person controlling,
controlled by or under common control with such Holder, with respect to which
registration, qualification or compliance of such Holder's securities has been
effected pursuant to this Agreement, and each underwriter, if any, and each
Person who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof), joint or several, arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document (including any related registration statement notification or the like)
incident to any such registration, qualification or compliance,
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or based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each Holder's
officers, directors, employees, agents, members and partners, and each Person
controlling each such Holder, each such underwriter and each Person who controls
any such underwriter, for any legal and any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable to a Holder in
any such case to the extent that any such claim, loss, damage, liability or
action arises out of or is based on any untrue statement or omission of material
fact based upon written information furnished to the Company by such Holder or
underwriter and stated to be specifically for use therein.
(B) Each Holder and Requesting Stockholder will severally not jointly, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of the Company's directors and officers and each underwriter, if
any, of the Company's securities covered by such registration statement, each
Person who controls the Company or such underwriter within the meaning of the
Securities Act and the rules and regulations thereunder, each other Holder,
Requesting Stockholder or any other holder of securities included in the
offering and each of their respective officers, directors, employees, agents,
members and partners, and each Person controlling such other Holder, Requesting
Stockholder and any other holders of securities included in the offering,
against all claims, losses, damages and liabilities (or actions in respect
thereof), joint or several, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, its officers and directors, each underwriter, each Person controlling
the Company or such underwriter, each other Holder and Requesting Stockholders,
their officers, directors, employees, agents, members, partners and control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder or Requesting Stockholder and stated to be
specifically for use therein; provided, however, that the obligations of each
such Holder and Requesting Stockholder hereunder shall be limited to an amount
equal to the net proceeds (after deduction of underwriting discounts and selling
commissions, if any) received by each such Holder or Requesting Stockholder of
securities sold as contemplated herein.
(C) Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
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litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld) and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless such failure
has had a material adverse effect on such claim. The parties to this Agreement
reserve any rights to claim under this Agreement for damages actually incurred
by reason of any failure of the Indemnified Party to give prompt notice of a
claim. To the extent counsel for the Indemnifying Party shall in such counsel's
reasonable judgment, have a conflict in representing an Indemnified Party in
conjunction with the Indemnifying Party or other Indemnified Parties, such
Indemnified Party shall be entitled to separate counsel at the expense of the
Indemnifying Party subject to the approval of such counsel by the Indemnified
Party (whose approval shall not be unreasonably withheld). No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and any litigation
resulting therefrom.
6. Restrictive Legend. Each certificate representing (a)
the Securities or (b) any Shares or other securities issued in respect thereof,
upon any stock split, stock dividend, recapitalization, merger, consolidation or
similar event shall be stamped or otherwise imprinted with a legend in the
following form (in addition to any legend required under applicable state
securities laws and any other applicable agreement(s)):
"THIS WARRANT/DEBENTURE [AND THE COMMON STOCK ISSUABLE UPON
COVERSION HEREOF] HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR ANY STATE
SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED,
HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS OR (2) THE COMPANY
RECEIVES AN OPINION OF COUNSEL TO THE COMPANY OR OTHER COUNSEL
TO THE HOLDER OF SUCH [WARRANT/DEBENTURE AND/OR COMMON STOCK]
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
[WARRANT/DEBENTURE AND/OR COMMON STOCK] MAY BE PLEDGED, SOLD,
ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS."
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7. Information by the Holders and Requesting
Stockholders. Each Holder of Registrable Securities, and each Requesting
Stockholder holding securities included in any registration, shall furnish to
the Company such information regarding such Holder or Requesting Stockholder and
the distribution proposed by such Holder or Requesting Stockholder as the
Company may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Agreement.
8. Limitations on Registration of Issues of Securities.
From and after the date of this Agreement, the Company shall not enter into any
agreement with any holder or prospective holder of any securities of the Company
giving such holder or prospective holder the right to require the Company to
register any securities of the Company that are more favorable to such holder or
prospective holder than the rights granted under this Agreement.
9. Rule 144 Reporting. With a view to making available
the benefits of certain rules and regulations of the Commission which may permit
the sale of the Restricted Securities to the public without registration, the
Company agrees to:
(a) make and keep public information available
as those terms are understood and defined and interpreted in and under
Rule 144 under the Securities Act ("Rule 144"), at all times from and
after the date hereof;
(b) file with the Commission in a timely manner
all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become
subject to such reporting requirements; and
(c) so long as the Holders own any Restricted
Securities, furnish to the Holders forthwith upon request a written
statement by the Company as to its compliance with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed as any
Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing any Holder to sell any such
securities without registration.
10. Participation in Underwritten Registrations. Subject
to the right of any Holder or Holders to withdraw any request for registration,
no Person may participate in any underwritten registration hereunder unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable and customary
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
11. Selection of Underwriters. If any Demand Registration
is an underwritten offering, (a) Galen, in the event of a Demand Registration
requested pursuant to Section 1(b)(i), (b) Watson, in the event of a Demand
Registration requested pursuant to Section 1(b)(ii), and (c) the Holders of
sixty and two-thirds percent (66 2/3%) of the Registrable Securities included in
such registration, in the event of any other registration shall have the right
to select the
11
investment banking firm to be lead manager of the offering, subject to the
approval of the Company (which approval will not be unreasonably withheld). If
any registration other than a Demand Registration is an underwritten offering,
the Company will have the right to select the investment banking firm to be lead
manager of the offering, subject to the approval of the Holders of sixty and
two-thirds percent (66 2/3%) of the Registrable Securities included in such
registration (which approval will not be unreasonably withheld).
12. Termination of Registration Rights. The rights of
Holders to request a Demand Registration or participate in a Piggyback
Registration shall expire on March 31, 2008.
13. Termination of Other Registration Rights Agreements.
(a) The 1998 Holders hereby agree and acknowledge that in
consideration for the registration rights granted hereunder that Article XI (or
any successor or equivalent article or provision) of the 1998 Purchase Agreement
and any other agreement, instrument or understanding that grants or purports to
grant registration rights to such parties are hereby terminated and of no
further force or effect.
(b) The holders of the 1998 Warrants hereby agree and
acknowledge that in consideration for the registration rights granted hereunder
that Article XI (or any successor or equivalent article or provision) of the
1998 Purchase Agreement and any other agreement, instrument or understanding
that grants or purports to grant registration rights to such parties are hereby
terminated and of no further force or effect.
(c) The 1999 Holders hereby agree and acknowledge that in
consideration for the registration rights granted hereunder that Article XI (or
any successor or equivalent article or provision) of the 1999 Purchase Agreement
and any other agreement, instrument or understanding that grants or purports to
grant registration rights to such parties are hereby terminated and of no
further force or effect.
(d) The holders of the 1999 Warrants hereby agree and
acknowledge that in consideration for the registration rights granted hereunder
that Article XI (or any successor or equivalent article or provision) of the
1999 Purchase Agreement and any other agreement, instrument or understanding
that grants or purports to grant registration rights to such parties are hereby
terminated and of no further force or effect.
(e) Galen hereby agrees and acknowledges that in
consideration for the registration rights granted hereunder that any provision
or Section in the Bridge Loan Agreements, the Bridge Loan Warrants and any other
agreement, instrument or understanding that grants or purports to grant
registration rights to Galen are hereby terminated and of no further force or
effect.
14. Definitions. As used herein, the following terms have
the following meanings:
"Act" means the Securities Act of 1933, as amended.
12
"Agreement" means this Registration Rights Agreement.
"Bridge Loan Agreements" means any and all of the separate
Bridge Loan Agreements between the Company, Galen Partners III, L.P.
and the other parties listed on the signature pages thereto entered
into between such parties commencing as of August 12, 1998 through and
including December __, 2002 pursuant to which the Bridge Loan Warrants
were issued, including, without limitation, that certain Bridge Loan
Agreement dated as of August 15, 2001 among the Company, Galen Partners
III, L.P., Galen Partners International III L.P., Galen Employee Fund
III, L.P., those individuals listed on the signature page thereto, and
Galen Partners III, L.P., as agent for the lenders, as amended by the
First Amendment to Bridge Loan Agreement dated as of January 8, 2002,
the Second Amendment to Bridge Loan Agreement dated as of April 5,
2002, and the Third Amendment to Bridge Loan Agreement dated as of May
8, 2002, as such may be supplemented, amended or otherwise modified
from time to time.
"Common Stock" has the meaning set forth in the recitals.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning set forth in the preamble.
"Demand Registration" has the meaning set forth in Section
1(a) of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holders" means the Investors or any Person to whom an
Investor or transferee(s) of an Investor has assigned, transferred or
otherwise conveyed the Securities or the Shares.
"Indemnified Party" has the meaning set forth in Section 5
hereof.
"Indemnifying Party" has the meaning set forth in Section 5
hereof.
"Investors" has the meaning set forth in the preamble.
"Loan Agreement" has the meaning set forth in the recitals.
"1998 Debentures" has the meaning set forth in the recitals.
"1998 Holder" has the meaning set forth in the recitals.
"1998 Purchase Agreement" has the meaning set forth in the
recitals.
"1998 Warrants" has the meaning set forth in the recitals.
13
"1999 Debentures" has the meaning set forth in the recitals.
"1999 Holder" has the meaning set forth in the recitals.
"1999 Purchase Agreement" has the meaning set forth in the
recitals.
"1999 Warrants" has the meaning set forth in the recitals.
"Person" means any individual, corporation, limited liability
company, partnership, association, trust or any other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
"Piggyback Registration" has the meaning set forth in Section
2 of this Agreement.
"Registrable Securities" means any Shares issued or issuable
upon the exercise or conversion of the Securities (including any
Securities that may be issued as interest with respect to any Security)
or in respect of the Shares issued or issuable upon the exercise or
conversion of any Securities upon any stock split, stock dividend,
recapitalization or similar event.
"Registration Expenses" means all expenses incurred by the
Company in compliance with Sections 1 and 2 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees,
and disbursements of counsel for the Company and blue sky fees and
expenses, reasonable fees and disbursements for one counsel, as such
counsel is selected in accordance with Section 4(a), and the expense of
any special audits incident to or required by any such registration,
exclusive of the Selling Expenses.
"Restricted Securities" means the securities of the Company
required to bear or bearing the legend set forth in Section 6 of this
Agreement.
"Requesting Stockholders" means holders of securities of the
Company entitled to have securities included in any registration
pursuant to Section 2 and who shall request such inclusion.
"Rule 144" has the meaning set forth in Section 9 of this
Agreement.
"Securities" has the meaning set forth in the recitals.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Expenses" means all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities
and, except as otherwise provided in "Registration Expenses", all fees
and disbursements of counsel for any Holder.
14
"Shares" means the shares of Common Stock which may be issued
upon the exercise of all or a portion of the Securities. The term
Shares does not include any other shares of Common Stock or other
capital stock of the Company.
"Shelf Registration" has the meaning set forth in Section 1 of
this Agreement.
"2002 Debentures" has the meaning set forth in the recitals.
"2002 Holder" has the meaning set forth in the recitals.
"2002 Purchase Agreement" has the meaning set forth in the
recitals.
"Watson Warrant" has the meaning set forth in the recitals.
15. Remedies. Any Person having rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party may in its
sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or other security) for specific performance and for
other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
16. Amendments and Waivers. The provisions of this
Agreement may be amended or waived only upon the prior written consent of the
Company and the Holders of sixty and two-thirds percent (66 2/3%) of the
Registrable Securities, provided that the prior written consent of all of the
Holders will be required to amend Section 1 and 2 hereof.
17 Delays or Omissions. No delay or omission to exercise
any right, power or remedy accruing to any Investor or Holder upon any breach or
default of the Company under this Agreement shall impair any such right, power
or remedy of such Holder or Investor nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence, therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any Investor or Holder of any provisions
or conditions of this Agreement must be, made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
18. Successors and Assigns. All covenants and agreements
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of the Holders of Registrable Securities are also for the benefit of,
and enforceable by, any subsequent holder of Registrable Securities. The
registration rights provided in this
15
Agreement may be transferred without restriction and shall inure to and be
enforceable by any and all Holders of Registrable Securities, including, without
limitation, any successors, assigns, transferees, heirs, executors and
administrators of the Investors.
19. Severability. Unless otherwise expressly provided
herein, each Investor's or Holders rights and obligations hereunder are several
rights and obligations, not rights and obligations jointly held with any other
person. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
20. Counterparts; Facsimile Transmission. This Agreement
may be executed simultaneously in two or more counterparts, any one of which
need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Agreement. Each
party to this Agreement agrees that it will be bound by its own facsimilied
signature and that it accepts the facsimilied signature of each other party to
this Agreement.
21. Descriptive Headings. The titles of the articles,
sections and subsections of this Agreement are for convenience of reference only
and are not to be considered in construing this Agreement.
22. Governing Law. This Agreement and the rights of the
parties hereunder shall be governed in all respects by the laws of the State of
New York wherein the terms of this Agreement were negotiated, excluding to the
greatest extent permitted by law any rule of law that would cause the
application of the laws of any jurisdiction other than the State of New York.
23. Notices. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or 48 hours after deposited in the United
States mail, certified or registered to the recipient by postage prepaid or by
facsimile. Such notices, demands and other communications shall be sent to the
Investors and to any Holder at the addresses indicated on the Schedule of
Investors attached hereto and to the Company at the address of its corporate
headquarters or to such other address or to the attention of such other Person
as the recipient party has specified by prior written notice to the sending
party.
[THIS SPACE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
COMPANY
HALSEY DRUG CO., INC.
By: ____________________________
Name: _____________________
Title: _____________________
WATSON
WATSON PHARMACEUTICALS, INC.
By: ____________________________
Name: _____________________
Title: _____________________
17
2002 HOLDERS
GALEN PARTNERS III, L.P. GALEN PARTNERS INTERNATIONAL, III, L.P.
By: Claudius, L.L.C., General Partner By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Fl. 610 Fifth Avenue, 5th Floor
New York, New York 10019 New York, New York 10020
__________________________________________ _______________________________________________
By: Srini Conjeevaram By: Srini Conjeevaram
Its: General Partner Its: General Partner
GALEN EMPLOYEE FUND III, L.P. ESSEX WOODLANDS VENTURES FUND V, L.P.
By: Wesson Enterprises, Inc. By: Essex Woodlands Health Ventures V, L.L.C.,
610 Fifth Avenue, 5th Floor Its General Partner
New York, New York 10020 190 South LaSalle Street, Suite 2800
Chicago, IL 60603
__________________________________________ _______________________________________________
By: Bruce F. Wesson By: Immanuel Thangaraj
Its: General Partner Its: Managing Director
CARE CAPITAL INVESTMENTS II, L.P. BERNARD SELZ
By: Care Capital II, LLC, General Partner c/o Furman Selz
47 Hulfish Street, Suite 310 230 Park Avenue
Princeton, NJ 08542 New York, New York 10069
__________________________________________ _______________________________________________
By: David R. Ramsay
Its: Authorized Signatory
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
__________________________________________ _______________________________________________
VARSHA H. SHAH HEMANT K. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
__________________________________________ _______________________________________________
18
GREG WOOD ROGER GRIGGS
c/o D.R. International c/o Tom Jennings
7474 No. Figueroa Street 7300 Turfway Road
Los Angeles, California 90041 Suite 300
Florence, KY 41042
__________________________________________ _______________________________________________
GEORGE E. BOUDREAU
222 Elbow Lane
Haverford, PA 19041
__________________________________________
19
1998 HOLDERS
GALEN PARTNERS III, L.P.
By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Fl.
New York, New York 10019
_______________________________________________
By: Srini Conjeevaram
Its: General Partner
GALEN EMPLOYEE FUND III, L.P. GALEN PARTNERS INTERNATIONAL, III, L.P.
By: Wesson Enterprises, Inc. By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Floor 610 Fifth Avenue, 5th Floor
New York, New York 10020 New York, New York 10020
__________________________________________ _______________________________________________
By: Srini Conjeevaram
By: Bruce F. Wesson Its: General Partner
Its: General Partner
ALAN SMITH PATRICK COYNE
21 Bedlow Avenue 800 Merion Square Road
Newport, Rhode Island 02840 Gladwyne, PA 19035
__________________________________________ _______________________________________________
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
__________________________________________ _______________________________________________
GREG WOOD DENNIS ADAMS
c/o D.R. International 120 Kynlyn Road
7474 No. Figueroa Street Radnor, Pennsylvania 19312
Los Angeles, California 90041
__________________________________________ _______________________________________________
20
ROBERT W. BAIRD & CO., INC., TTEE ROBERT W. BAIRD & CO., INC., TTEE
FBO Connie Reicher IRA FBO Michael K. Reicher IRA
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
__________________________________________ _______________________________________________
By: Robert W. Baird By: Robert W. Baird
Its: Trustee Its: Trustee
CONNIE REICHER TRUST MICHAEL REICHER TRUST
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
__________________________________________ _______________________________________________
By: Connie Reicher By: Michael Reicher
Its: Trustee Its: Trustee
PETER CLEMENS STEPHANIE HEITMEYER
c/o Halsey Drug Co., Inc. 17759 Road, Route 66
695 North Perryville Rd. Ft. Jennings, Ohio 45844
Crimson Building #2
Rockford, Ill. 61107
__________________________________________ _______________________________________________
VARSHA H. SHAH HEMANT K. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
__________________________________________ _______________________________________________
BERNARD SELZ
c/o Furman Selz
230 Park Avenue
New York, New York 10069
__________________________________________
21
VARSHA H. SHAH AS CUSTODIAN VARSHA H. SHAH AS CUSTODIAN
FOR SACHIN H. SHAH FOR SUMEET H. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
__________________________________________ _______________________________________________
By: Varshah H. Shah By: Varshah H. Shah
Its: Custodian Its: Custodian
MICHAEL RAINISCH ILENE RAINISCH
c/o Alvin Rainisch c/o Alvin Rainisch
315 Devon Place 315 Devon Place
Morganville, New Jersey 07751 Morganville, New Jersey 07751
__________________________________________ _______________________________________________
KENNETH GIMBEL, IRA ACCOUNT KENNETH GIMBEL
FBO KENNETH GIMBEL 2455 Montgomery Avenue
2455 Montgomery Avenue Highland Park, Ill. 60035
Highland Park, Ill. 60035
__________________________________________ _______________________________________________
By: ______________________________________
Its: Trustee
JESSICA K. CLEMENS JAKE P. CLEMENS
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
__________________________________________ _______________________________________________
BROOKE EMILY REICHER ALEC JOHN REICHER
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
__________________________________________ _______________________________________________
22
COURTNEY PAIGE REICHER DEANA REICHER
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
__________________________________________ _______________________________________________
MICHAEL K. REICHER II TODD ALLEN REICHER
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
__________________________________________ _______________________________________________
23
1999 HOLDERS
ORACLE STRATEGIC PARTNERS, L.P. GALEN PARTNERS III, L.P.
By: Oracle Strategic Capital L.L.C., By: Claudius, L.L.C., General Partner
General Partner 610 Fifth Avenue, 5th Fl.
200 Greenwich Avenue New York, New York 10019
3rd Floor
Greenwich, CT 06830
__________________________________________ _______________________________________________
By: Joel Liffmann By: Srini Conjeevaram
Its: Authorized Agent Its: General Partner
GALEN EMPLOYEE FUND III, L.P. GALEN PARTNERS INTERNATIONAL, III, L.P.
By: Wesson Enterprises, Inc. By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Floor 610 Fifth Avenue, 5th Floor
New York, New York 10020 New York, New York 10020
__________________________________________ _______________________________________________
By: Bruce F. Wesson By: Srini Conjeevaram
Its: General Partner Its: General Partner
ALAN SMITH PATRICK COYNE
21 Bedlow Avenue 800 Merion Square Road
Newport, Rhode Island 02840 Gladwyne, PA 19035
__________________________________________ _______________________________________________
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
__________________________________________ _______________________________________________
24
GREG WOOD DENNIS ADAMS
c/o D.R. International 120 Kynlyn Road
7474 No. Figueroa Street Radnor, Pennsylvania 19312
Los Angeles, California 90041
_______________________________________ _________________________________
BERNARD SELZ
c/o Furman Selz
230 Park Avenue
New York, New York 10069
_______________________________________
25
HOLDERS OF RECAP SHARES
ORACLE STRATEGIC PARTNERS, L.P. DANIEL HILL
By: Oracle Strategic Capital L.L.C., 6725 Lynch Avenue
General Partner Riverbank, CA 95367
200 Greenwich Avenue
3rd Floor
Greenwich, CT 06830
_______________________________________ _________________________________
By: Joel Liffmann
Its: Authorized Agent
BERNARD SELZ PETER CLEMENS
c/o Furman Selz c/o Halsey Drug Co., Inc.
230 Park Avenue 695 North Perryville Rd.
New York, New York 10069 Crimson Building #2
Rockford, Ill. 61107
_______________________________________ _________________________________
ALAN SMITH PATRICK COYNE
21 Bedlow Avenue 800 Merion Square Road
Newport, Rhode Island 02840 Gladwyne, PA 19035
_______________________________________ _________________________________
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
_______________________________________ _________________________________
GREG WOOD DENNIS ADAMS
c/o D.R. International 120 Kynlyn Road
7474 No. Figueroa Street Radnor, Pennsylvania 19312
Los Angeles, California 90041
_______________________________________ _________________________________
26
ROBERT W. BAIRD & CO., INC., TTEE ROBERT W. BAIRD & CO., INC., TTEE
FBO Connie Reicher IRA FBO Michael K. Reicher IRA
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
_______________________________________ _________________________________
By: Robert W. Baird By: Robert W. Baird
Its: Trustee Its: Trustee
CONNIE REICHER TRUST MICHAEL REICHER TRUST
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
_______________________________________ _________________________________
By: Connie Reicher By: Michael Reicher
Its: Trustee Its: Trustee
KENNETH GIMBEL STEPHANIE HEITMEYER
2455 Montgomery Avenue 17759 Road, Route 66
Highland Park, Ill. 60035 Ft. Jennings, Ohio 45844
_______________________________________ _________________________________
VARSHA H. SHAH HEMANT K. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
_______________________________________ _________________________________
VARSHA H. SHAH AS CUSTODIAN VARSHA H. SHAH AS CUSTODIAN
FOR SACHIN H. SHAH FOR SUMEET H. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
_______________________________________ _________________________________
By: Varshah H. Shah By: Varshah H. Shah
Its: Custodian Its: Custodian
27
MICHAEL RAINISCH ILENE RAINISCH
c/o Alvin Rainisch c/o Alvin Rainisch
31 Congressional Road 35 Congressional Road
Jackson, New Jersey 08527 Jackson, New Jersey 08527
_______________________________________ _________________________________
28
GALEN
GALEN PARTNERS III, L.P.
By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Fl.
New York, New York 10019
______________________________________
By: Srini Conjeevaram
Its: General Partner
GALEN EMPLOYEE FUND III, L.P. GALEN PARTNERS INTERNATIONAL, III,
By: Wesson Enterprises, Inc. L.P.
610 Fifth Avenue, 5th Floor By: Claudius, L.L.C., General Partner
New York, New York 10020 610 Fifth Avenue, 5th Floor
New York, New York 10020
______________________________________ _____________________________________
By: Bruce F. Wesson By: Srini Conjeevaram
Its: General Partner Its: General Partner
29
SCHEDULE 1
SCHEDULE OF INVESTORS
Watson:
Watson Pharmaceuticals, Inc.
311 Bonnie Circle
Corona, California 92880
Attention: Michael Boxer
Tel: ____________________
Fax: ____________________
2002 HOLDERS
GALEN PARTNERS III, L.P. GALEN PARTNERS INTERNATIONAL, III, L.P.
By: Claudius, L.L.C., General Partner By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Fl. 610 Fifth Avenue, 5th Floor
New York, New York 10019 New York, New York 10020
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
GALEN EMPLOYEE FUND III, L.P. ESSEX WOODLANDS VENTURES FUND V, L.P.
By: Wesson Enterprises, Inc. By: Essex Woodlands Health Ventures V,
610 Fifth Avenue, 5th Floor L.L.C., Its General Partner
New York, New York 10020 190 South LaSalle Street, Suite 2800
Chicago, IL 60603
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
CARE CAPITAL INVESTMENTS II, LP BERNARD SELZ
c/o Furman Selz
By: Care Capital II, LLC, as general 230 Park Avenue
partner New York, New York 10069
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
30
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
VARSHA H. SHAH HEMANT K. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
GREG WOOD GEORGE E. BOUDREAU
c/o D.R. International 222 Elbow Lane
7474 No. Figueroa Street Havenford, PA 19041
Los Angeles, California 90041
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
ROGER GRIGGS
c/o Tom Griggs
7300 Turfway Road
Suite 300
Florence, KY 41042
Tel: ____________________
Fax: ____________________
31
1998 HOLDERS
GALEN PARTNERS III, L.P.
By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Fl.
New York, New York 10019
Tel: ____________________
Fax: ____________________
GALEN EMPLOYEE FUND III, L.P. GALEN PARTNERS INTERNATIONAL, III, L.P.
By: Wesson Enterprises, Inc. By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Floor 610 Fifth Avenue, 5th Floor
New York, New York 10020 New York, New York 10020
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
ALAN SMITH PATRICK COYNE
21 Bedlow Avenue 800 Merion Square Road
Newport, Rhode Island 02840 Gladwyne, PA 19035
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
GREG WOOD DENNIS ADAMS
c/o D.R. International 120 Kynlyn Road
7474 No. Figueroa Street Radnor, Pennsylvania 19312
Los Angeles, California 90041
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
32
BERNARD SELZ ROBERT W. BAIRD & CO., INC., TTEE
c/o Furman Selz FBO Michael K. Reicher IRA
230 Park Avenue c/o Halsey Drug Co., Inc.
New York, New York 10069 695 North Perryville Rd.
Crimson Building #2
Rockford, Ill. 61107
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
MICHAEL REICHER PETER CLEMENS
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
CONNIE REICHER TRUST STEPHANIE HEITMEYER
c/o Halsey Drug Co., Inc. 17759 Road, Route 66
695 North Perryville Rd. Ft. Jennings, Ohio 45844
Crimson Building #2
Rockford, Ill. 61107
Tel: ____________________
Tel: ____________________ Fax: ____________________
Fax: ____________________
VARSHA H. SHAH HEMANT K. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
VARSHA H. SHAH AS CUSTODIAN VARSHA H. SHAH AS CUSTODIAN
FOR SACHIN H. SHAH FOR SUMEET H. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
33
1999 HOLDERS
ORACLE STRATEGIC PARTNERS, L.P. GALEN PARTNERS III, L.P.
By: Oracle Strategic Capital L.L.C., By: Claudius, L.L.C., General Partner
General Partner 610 Fifth Avenue, 5th Fl.
200 Greenwich Avenue New York, New York 10019
3rd Floor
Greenwich, CT 06830
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
GALEN EMPLOYEE FUND III, L.P. GALEN PARTNERS INTERNATIONAL, III, L.P.
By: Wesson Enterprises, Inc. By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Floor 610 Fifth Avenue, 5th Floor
New York, New York 10020 New York, New York 10020
Tel: ____________________
Tel: ____________________ Fax: ____________________
Fax: ____________________
ALAN SMITH PATRICK COYNE
21 Bedlow Avenue 800 Merion Square Road
Newport, Rhode Island 02840 Gladwyne, PA 19035
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
34
GREG WOOD DENNIS ADAMS
c/o D.R. International 120 Kynlyn Road
7474 No. Figueroa Street Radnor, Pennsylvania 19312
Los Angeles, California 90041
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
BERNARD SELZ
c/o Furman Selz
230 Park Avenue
New York, New York 10069
Tel: ____________________
Fax: ____________________
35
HOLDERS OF RECAP SHARES
ORACLE STRATEGIC PARTNERS, L.P. DANIEL HILL
By: Oracle Strategic Capital L.L.C., 6725 Lynch Avenue
General Partner Riverbank, CA 95367
200 Greenwich Avenue
3rd Floor
Greenwich, CT 06830
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
BERNARD SELZ PETER CLEMENS
c/o Furman Selz c/o Halsey Drug Co., Inc.
230 Park Avenue 695 North Perryville Rd.
New York, New York 10069 Crimson Building #2
Rockford, Ill. 61107
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
ALAN SMITH PATRICK COYNE
21 Bedlow Avenue 800 Merion Square Road
Newport, Rhode Island 02840 Gladwyne, PA 19035
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
GREG WOOD DENNIS ADAMS
c/o D.R. International 120 Kynlyn Road
7474 No. Figueroa Street Radnor, Pennsylvania 19312
Los Angeles, California 90041
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
36
ROBERT W. BAIRD & CO., INC., TTEE ROBERT W. BAIRD & CO., INC., TTEE
FBO Connie Reicher IRA FBO Michael K. Reicher IRA
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
CONNIE REICHER TRUST MICHAEL REICHER TRUST
c/o Halsey Drug Co., Inc. c/o Halsey Drug Co., Inc.
695 North Perryville Rd. 695 North Perryville Rd.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Rockford, Ill. 61107
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
KENNETH GIMBEL STEPHANIE HEITMEYER
2455 Montgomery Avenue 17759 Road, Route 66
Highland Park, Ill. 60035 Ft. Jennings, Ohio 45844
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
VARSHA H. SHAH HEMANT K. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
VARSHA H. SHAH AS CUSTODIAN VARSHA H. SHAH AS CUSTODIAN
FOR SACHIN H. SHAH FOR SUMEET H. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
37
MICHAEL RAINISCH ILENE RAINISCH
c/o Alvin Rainisch c/o Alvin Rainisch
31 Congressional Road 35 Congressional Road
Jackson, New Jersey 08527 Jackson, New Jersey 08527
Tel: ____________________ Tel: ____________________
Fax: ____________________ Fax: ____________________
38
GALEN
GALEN PARTNERS III, L.P.
By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Fl.
New York, New York 10019
Tel: ____________________
Fax: ____________________
GALEN EMPLOYEE FUND III, L.P. GALEN PARTNERS INTERNATIONAL, III, L.P.
By: Wesson Enterprises, Inc. By: Claudius, L.L.C., General Partner
610 Fifth Avenue, 5th Floor 610 Fifth Avenue, 5th Floor
New York, New York 10020 New York, New York 10020
Tel: ____________________
Tel: ____________________ Fax: ____________________
Fax: ____________________
39
SCHEDULE 2
BRIDGE LOAN WARRANTS
See attached.
40
GALEN PARTNERS GALEN
WARRANT EXERCISE GALEN PARTNERS III, INTERNATIONAL III, EMPLOYEES
DATE OF WARRANT PRICE L.P. L.P. FUND III, L.P.
August 12, 1998 $ 2.2100 47,646 4,611 209
September 17, 1998 $ 1.8900 23,824 2,305 104
October 2, 1998 $ 1.7300 23,824 2,305 104
October 19, 1998 $ 1.5000 7,147 692 31
October 19, 1998 $ 1.4700 35,735 3,459 156
November 6, 1998 $ 1.4700 71,471 6,917 311
December 2, 1998 $ 1.3000 654,098 59,208 2,679
March 8, 1999 $ 1.1400 64,120 5,804 262
May 3, 1999 $ 1.1200 11,863 1,073 49
January 7, 2000 $ 1.4000 23,965 2,169 99
January 21, 2000 $ 1.4300 47,931 4,339 196
February 19, 2000 $ 1.1300 23,965 2,169 99
March 4, 2000 $ 1.5500 23,965 2,169 99
August 15, 2001 $ 3.0120 140,459 12,715 576
January 9, 2002 $ 1.8370 146,157 13,230 598
January 9, 2002 $ 1.8370 66,805 6,047 273
February 1, 2002 $ 1.8700 68,518 6,202 280
March 1, 2002 $ 2.0870 68,518 6,202 280
April 1, 2002 $ 2.0100 45,678 4,135 187
May 8, 2002 $ 2.1600 1,635,580 148,044 6,696
May 8, 2002 $ 2.1600 548,142 49,614 2,244
May 8, 2002 $ 2.1600 241,586 21,867 989
June 3, 2002 $ 1.9000 215,194 19,478 881
July 23, 2002 $ 1.7200 186,772 16,905 765
July 23, 2002 $ 1.4500 82,220 7,442 337
August 5, 2002 $ 1.4200 151,245 13,690 619
September 3, 2002 $ 1.5100 121,808 11,025 499
October 1, 2002 $ 1.7545 93,386 8,453 382
November 4, 2002 $ 1.7565 11,775 1,066 48
November 12, 2002 $ 1.7730 10,151 919 42
November 21, 2002 $ 1.5770 24,971 2,260 102
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4,918,519 446,514 20,196
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41