EXHIBIT 10.6
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") dated as of February 6, 2004, 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 20,
2002, the Company issued 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 (as
defined below), all of the holders (except Galen) (the "Recap Shareholders") of
the 1998 Warrants and the 1999 Warrants entered into an agreement (the
"Recapitalization Agreement"), dated December 20, 2002, 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 December 20, 2002 (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 closing of the 2002 Purchase
Agreement, the Company, the 1998 Holders, the 1999 Holders, the holder of the
1998 Warrants, the holders of the 1999 Warrants, Galen, Watson, the holders of
the Recap Shares, and the 2002 Holders entered into that certain Registration
Rights Agreement dated December 20, 2002 (the "Original Registration Rights
Agreement") (i) providing registration rights to the 2002 Holders, (ii)
terminating the registration rights previously granted by the Company to the
1998 Holders, the 1999 Holders, the holders of the 1998 Warrants, the holders of
the 1999 Warrants, and Galen, and (iii) granting registration rights to Watson,
the 1998 Holders, the 1999 Holders, the 2002 Holders, the Recap Shareholders,
and Galen for each of the 1998 Debentures, the 1999 Debentures, the 1998
Warrants, the 1999 Warrants, the Recap Shares, the Bridge Loan Warrants, and the
2002 Debentures; and
WHEREAS, the Company and certain purchasers are parties to
that certain Debenture and Share Purchase Agreement, dated February 6, 2004 (as
such agreement may be supplemented, amended or otherwise modified from time to
time, the "2004 Purchase Agreement") whereby the Company issued to such parties
the Company's convertible senior secured debentures (as such debentures may be
supplemented, amended, or otherwise modified from time to time, the "2004
Debentures"; each such holder of 2004 Debentures, or any permitted successor,
assign or transferee thereof, a "2004 Holder") which are convertible
automatically into shares of the Company's Series A Convertible Preferred Stock
(the "Series A Shares") immediately following the Company's receipt of
shareholder approval to amend and restate its Certificate of Incorporation to
authorize the Series A Shares (the "Charter
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Amendment") and the filing of the Charter Amendment with the Office of the New
York Department of State; and
WHEREAS, the Company and certain purchasers are parties to
that certain Debenture Conversion Agreement, dated February 6, 2004 (as such
agreement may be supplemented, amended or otherwise modified from time to time,
the "Conversion Agreement"), whereby each holder of the Company's outstanding 5%
convertible senior secured debentures due March 31, 2006 (collectively, the
"Outstanding Debentures") shall convert such holder's Outstanding Debentures
into shares of Series B Convertible Preferred Stock (the "Series B Shares")
and/or Series C Convertible Preferred Stock (the "Series C Shares") immediately
following the Company's receipt of shareholder approval of the Charter Amendment
and the filing of the Charter Amendment with the Office of the New York
Department of State;
WHEREAS, in connection with the 2004 Purchase Agreement, the
Company has agreed to grant the holders of the 2004 Debentures registration
rights relating to the Shares issuable upon conversion of the Series A Shares as
set forth in this Agreement;
WHEREAS, in connection with the Conversion Agreement, the
Company has agreed to grant the holders of each of the Series B Shares and the
Series C Shares registration rights relating to the Shares issuable upon
conversion of the Series B Shares and Series C Shares as set forth in this
Agreement; and
WHEREAS, the Company and the Investors, each of whom is a
party to the Original Registration Rights Agreement, desire to terminate the
Original Registration Rights Agreement as of the date hereof, and provide the
Investors with the registration rights as set forth in this Agreement.
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
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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) Watson
shall be entitled to request one Demand Registration on Form S-1 (or any
successor to such form), (ii) the Holders of at least 25% of the Registrable
Securities then outstanding shall be entitled to request three Demand
Registrations on Form S-1 (or any successor to such form), and (iii) 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; provided, that the aggregate offering value of the
Registrable Securities requested to be registered under Sections 1(b)(i), (ii)
and (iii) must be reasonably expected (at the time of the request) to equal at
least $2,500,000. A registration will not count as a Demand Registration (x)
until it has become effective and 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, or (y) 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 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-six 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 (in which registration the Holders
were permitted to register at least 50% of the Registrable Securities that they
requested for inclusion) other than a registration of Registrable Securities
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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.
(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.
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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.
(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 the Holders of sixty-six and
two-thirds percent (66 2/3%) of the Registrable Securities included in
such registration copies of all such
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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);
(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
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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 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 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
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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, 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
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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
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
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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/PREFERRED SHARE] [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/PREFERRED
SHARE AND/OR COMMON STOCK] REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH [WARRANT/DEBENTURE/ PREFERRED SHARE 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."
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.
11
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, the Holders of sixty-six and two-thirds percent (66
2/3%) of the Registrable Securities included in such registration shall have the
right to select the 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-six and two-thirds percent (66 2/3%) of the Registrable
Securities included in such registration (which approval will not be
unreasonably withheld).
12
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, 2009.
13. Termination of Original Registration Rights
Agreement. The Company and the Investors acknowledge and agree that this Amended
and Restated Registration Rights Agreement is issued in replacement of that
certain Original Registration Rights Agreement between the Company and the
Investors listed as a Party thereto dated as of December 20, 2002 and upon
execution of this Amended and Restated Registration Rights Agreement, the
Original Registration Rights Agreement shall be terminated and no further legal
force or effect.
14. Definitions. As used herein, the following terms have
the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Agreement" means this Amended and Restated 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 20, 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.
"Charter Amendment" has the meaning set forth in the recitals.
"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.
"Conversion Agreement" has the meaning set forth in the
recitals.
"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.
13
"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.
"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.
"Outstanding Debentures" 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
14
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" means the Recap Shares, the Watson Warrant, the
1998 Debentures, 1999 Debentures, 1998 Warrants held by Galen, the 1999
Warrants held by Galen, the Bridge Loan Warrants, the 2002 Debentures,
the 2004 Debentures, the Series A Shares, the Series B Shares, and the
Series C Shares.
"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.
"Series A Shares" has the meaning set forth in the recitals.
"Series B Shares" has the meaning set forth in the recitals.
"Series C Shares" has the meaning set forth in the recitals.
"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.
"2004 Debentures" has the meaning set forth in the recitals.
"2002 Holder" has the meaning set forth in the recitals.
"2004 Holder" has the meaning set forth in the recitals.
"2002 Purchase Agreement" has the meaning set forth in the
recitals.
"2004 Purchase Agreement" has the meaning set forth in the
recitals.
15
"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-six 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 or 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 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.
16
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 facsimiled
signature and that it accepts the facsimiled 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]
17
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
COMPANY
HALSEY DRUG CO., INC.
By:____________________________________________
Name: Andrew D. Reddick
Title: President and Chief Executive Officer
WATSON
WATSON PHARMACEUTICALS, INC.
By:____________________________________________
Name: Charles Slacik
Title: Chief Financial Officer
18
GALEN PARTNERS III, L.P. ORACLE STRATEGIC PARTNERS, L.P.
By: Claudius, L.L.C., General Partner By: Oracle Strategic Capital L.L.C.,
610 Fifth Avenue, 5th Fl. General Partner
New York, New York 10019 200 Greenwich Avenue
3rd Floor
Greenwich, Connecticut 06830
_______________________________________ ____________________________________
By: Srini Conjeevaram By: Joel Liffmann
Its: General Partner Its: Authorized Agent
GALEN PARTNERS INTERNATIONAL, III, L.P. CARE CAPITAL INVESTMENTS II, LP
By: Claudius, L.L.C., General Partner By: Care Capital II, LLC, as general
610 Fifth Avenue, 5th Floor partner
New York, New York 10020 47 Hulfish St., Suite 310
Princeton, NJ 08542
_______________________________________ By: ________________________________
By: Srini Conjeevaram Name: David R. Ramsay
Its: General Partner Title: Authorized Signatory
GALEN EMPLOYEE FUND III, L.P. ESSEX WOODLANDS HEALTH
By: Wesson Enterprises, Inc. VENTURES V, L.P.
610 Fifth Avenue, 5th Floor 190 South LaSalle Street, Suite 2800
New York, New York 10020 Chicago, IL 60603
_______________________________________ ____________________________________
By: Bruce F. Wesson By: Immanuel Thangaraj
Its: General Partner Its: Managing Director
19
ALAN SMITH PATRICK COYNE
21 Bedlow Avenue 800 Merion Square Road
Newport, Rhode Island 02840 Gladwyne, Pennsylvania 19035
_______________________________________ ____________________________________
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
_______________________________________ ____________________________________
GREG WOOD DENNIS ADAMS
1263 East Calavera Street 120 Kynlyn Road
Altadena, CA 91001 Radnor, Pennsylvania 19312
_______________________________________ ____________________________________
STEFANIE HEITMEYER BERNARD SELZ
17759 Road, Route 66 600 Fifth Avenue, 25th Floor
Fort Jennings, Ohio 45844 New York, New York 10020
_______________________________________ ____________________________________
PETER CLEMENS ROGER GRIGGS
c/o Halsey Drug Co., Inc. c/o Tom Jennings
695 North Perryville Rd. 7300 Turfway Road
Crimson Building #2 Suite 300
Rockford, Illinois 61107 Florence, KY 41042
_______________________________________ ____________________________________
VARSHA H. SHAH HEMANT K. SHAH
29 Chrissy Drive 29 Chrissy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
_______________________________________ ____________________________________
20
VARSHA H. SHAH AS CUSTODIAN VARSHA H. SHAH AS CUSTODIAN
FOR SACHIN H. SHAH FOR SUMEET H. SHAH
29 Chrissy Drive 29 Chrissy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
_______________________________________ ____________________________________
By: Varsha H. Shah, Custodian By: Varsha H. Shah, Custodian
MICHAEL RAINISCH ILENE RAINISCH
c/o Alvin Rainisch c/o Alvin Rainisch
300 Flower Lane 300 Flower Lane
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, Illinois 60035
Highland Park, Illinois 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, Illinois 61107 Rockford, Illinois 61107
_______________________________________ ____________________________________
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, Trustee By: Michael Reicher, Trustee
ROBERT W. BAIRD & CO., INC., TTEE
FBO Michael K. Reicher IRA
c/o Halsey Drug Co., Inc.
695 North Perryville Rd.
Rockford, Ill. 61107
_______________________________________
By: Robert W. Baird, Trustee
21
PETER STIEGLITZ
RJ Palmer LLC
156 West 56th Street, 5th Floor
New York, New York 10019
_______________________________________
GEORGE E. BOUDREAU JOHN E. HEPPE, JR.
222 Elbow Lane 237 W. Montgomery Avenue
Haverford, PA 19041 Haverford, Pennsylvania 19041
_______________________________________ ____________________________________
22
SCHEDULE 1
SCHEDULE OF INVESTORS
Watson:
Watson Pharmaceuticals, Inc.
311 Bonnie Circle
Corona, California 92880
Attention: Charles Slacik
Tel: 909-270-1400 ext. 4150
Fax: 909-270-1429
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: 212-218-4990 Tel: 212-218-4990
Fax: 212-218-4999 Fax: 212-218-4999
GALEN EMPLOYEE FUND III, L.P. ESSEX WOODLANDS HEALTH VENTURES V, L.P.
By: Wesson Enterprises, Inc. By: Essex Woodlands Health Ventures V,
610 Fifth Avenue, 5th Floor L.L.C.,
New York, New York 10020 Its General Partner
190 South LaSalle Street, Suite 2800
Chicago, IL 60603
Tel: 212-218-4990 Tel: 312-444-6040
Fax: 212-218-4999 Fax: 312-444-6034
CARE CAPITAL INVESTMENTS II, LP ROGER GRIGGS
By: Care Capital II, LLC, as general c/o Tom Griggs
partner 7300 Turfway Road
47 Hulfish St., Suite 310 Suite 300
Princeton, NJ 08542 Florence, KY 41042
Tel: 609-520-1973 Tel: 859-371-7581
Fax: 609-520-9299 Fax: 859-371-7692
23
ALAN SMITH PATRICK COYNE
21 Bedlow Avenue 800 Merion Square Road
Newport, Rhode Island 02840 Gladwyne, PA 19035
Tel: 410-846-5418 Tel: 215-255-1387
Fax: 410-846-5418 Fax: 215-255-1296
MICHAEL WEISBROT SUSAN WEISBROT
1136 Rock Creek Road 1136 Rock Creek Road
Gladwyne, Pennsylvania 19035 Gladwyne, Pennsylvania 19035
Tel: 610-941-0300 Tel: 610-941-0300
Fax: 610-941-6655 Fax: 610-941-6655
GREG WOOD DENNIS ADAMS
1263 East Calavera Street 120 Kynlyn Road
Atladena, CA 19001 Radnor, Pennsylvania 19312
Tel: 323-254-4326 Tel: 610-337-9230
Fax: 323-254-8756 Fax: 610-293-1808
BERNARD SELZ ROBERT W. BAIRD & CO., INC., TTEE
600 Fifth Avenue, 25th floor FBO Michael K. Reicher IRA
New York, NY 10020 c/o Halsey Drug Co., Inc.
695 North Perryville Rd.
Tel: 212-218-8270 Crimson Building #2
Fax: 212-218-8250 Rockford, Ill. 61107
MICHAEL REICHER TRUST Tel: 815-399-2060
c/o Halsey Drug Co., Inc. Fax: 815-399-9710
695 North Perryville Rd.
Crimson Building #2 PETER CLEMENS
Rockford, Ill. 61107 c/o Halsey Drug Co., Inc.
695 North Perryville Rd.
Tel: 815-399-2060 Crimson Building #2
Fax: 815-399-9710 Rockford, Ill. 61107
Tel: 815-399-2060
Fax: 815-399-9710
24
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: 419-453-2144
Tel: 815-399-2060 Fax: 419-453-3085
Fax: 815-399-9710
VARSHA H. SHAH HEMANT K. SHAH
29 Christy Drive 29 Christy Drive
Warren, New Jersey 07059 Warren, New Jersey 07059
Tel: 732-469-6334 Tel: 732-469-6334
Fax: 732-469-6434 Fax: 732-469-6434
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: 732-469-6334 Tel: 732-469-6334
Fax: 732-469-6434 Fax: 732-469-6434
PETER STIEGLITZ GEORGE E. BOUDREAU
RJ Palmer LLC 222 Elbow Lane
156 West 56th Street, 5th Floor Haverford, PA 19041
New York, New York 10019
Tel: 917-344-5332 Tel: 215-5456334
Fax:___________________________ Fax:___________________________
ORACLE STRATEGIC PARTNERS, L.P. JOHN E. HEPPE, JR.
By: Oracle Strategic Capital L.L.C., 237 W. Montgomery Avenue
General Partner Haverford, Pennsylvania 19041
200 Greenwich Avenue
3rd Floor
Greenwich, CT 06830
Tel: 203-862-7920 Tel: 610-649-1554
Fax: 203-862-1601 Fax:____________________________
25
SCHEDULE 2
BRIDGE LOAN WARRANTS
See attached.
26
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
--------- ------- ------
December 5, 2002 $ 1.2770 13,704 1,240 56
--------- ------- ------
4,932,223 447,754 20,252
========= ======= ======
27