Exhibit 99.1
Endo Pharmaceuticals Holdings Inc.
11,000,000 Shares
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
August 3, 2004
Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, NY 10179
Ladies and Gentlemen:
The persons named in Schedule I hereto (the "Selling Stockholders"),
propose to sell to Bear, Stearns & Co. Inc. (the "Underwriter"), 11,000,000
shares of Common Stock, $.01 par value ("Common Stock") of Endo Pharmaceuticals
Holdings Inc., a corporation organized under the laws of Delaware (the
"Company"), (said shares to be sold by the Selling Stockholders being
hereinafter called the "Underwritten Securities"). The Selling Stockholders also
propose to grant to the Underwriter an option to purchase up to 1,650,000
additional shares of Common Stock to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). The Securities include shares of
Common Stock (collectively, the "Stock Option Shares") to be acquired by certain
Selling Stockholders identified in Schedule I hereto (the "Stock Option Selling
Stockholders") upon exercise of currently outstanding options to purchase Common
Stock granted under the Endo Pharma LLC Stock Option Plans (as defined in the
Registration Statement.)
Any reference herein to the Registration Statement or the Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statement or the issue date
of the Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration
Statement, or the issue date of the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
16 hereof.
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1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, the
Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
Registration Statement (file number 333-115032) on Form S-3, including
pre-effective amendments no. 1, no. 2 and no. 3 thereto, for
registration under the Act of shares of Common Stock and the offering
thereof from time to time in accordance with Rule 415. Such
Registration Statement has been declared effective by the Commission
and the Company has filed such post-effective amendments thereto as may
be required prior to the Execution Time and each such post-effective
amendment has been declared effective by the Commission. Promptly after
Execution Time, the Company will file the Prospectus with the
Commission in accordance with Rule 424(b). The Company has included in
such registration statement, as amended at the Effective Date, all
information required by the Act and the rules thereunder to be included
in such registration statement and the Prospectus.
(b) On the Effective Date, the Registration Statement did, and
when the Prospectus is filed in accordance with Rule 424(b) and on the
Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a
"Settlement Date"), the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the
Act and the rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Prospectus did not, and on the date of any filing pursuant to Rule
424(b), and on the Closing Date and any Settlement Date, the Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration
Statement, or the Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the
Company by the Underwriter specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
(c) Each of the Company's (a) Form 10-K, for the fiscal year
ended December 31, 2003, (b) Form 10-Q for the period ended March 31,
2003, (c) Information Statement for the 2004 annual meeting of
shareholders pursuant to Section 14(c) of the Exchange Act, and (d)
current reports on Form 8-K filed or furnished since December 31, 2003
(collectively, the documents listed in (a), (b), (c) and (d) above are
referred to as the "1934 Act Reports") filed or furnished with the
Commission pursuant to the Exchange Act at the time they were or
hereafter are filed or furnished with the Commission complied or will
comply in all material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder, and,
when filed of furnished with the Commission, did not and will not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
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(d) Each of the Company and Endo Pharmaceuticals Inc., a
Delaware corporation ("Endo Pharmaceuticals"), EPI Company, a Delaware
corporation ("EPI"), BML Pharmaceuticals, Inc., a Delaware corporation
("BML") and Endo Pharma Canada Inc., a corporation organized under the
laws of the province of New Brunswick, Canada ("Endo Canada", together
with Endo Pharmaceuticals, EPI and BML, the "Subsidiaries"), has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware or, with respect to
Endo Canada, the province of New Brunswick, Canada, with full corporate
power and authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the Prospectus,
and is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified or in good
standing in any such other jurisdiction would not have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and the Subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business (a "Material Adverse Effect").
(e) Other than the Subsidiaries, the Company has no
subsidiaries and, except for the Company's ownership interest in DURECT
Corporation and U.S. Dermatologics, Inc., does not own any shares of
capital stock of or interests in any other Person.
(f) All of the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiaries
are owned by the Company directly free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
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(g) The Company's authorized equity capitalization is as set
forth in the Prospectus. The capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus. The outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable. The
Securities being sold hereunder by the Selling Stockholders have been
duly and validly authorized, and are fully paid and nonassessable. The
Securities being sold hereunder by the Selling Stockholders are duly
listed, and admitted and authorized for trading on the Nasdaq National
Market. The certificates for the Securities are in valid and sufficient
form; the holders of outstanding shares of capital stock of the Company
are not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in
the Company are outstanding.
(h) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements included or
incorporated by reference in the Prospectus under the headings "Risk
Factors - Our ability to protect our proprietary technology, which is
vital to our business, is uncertain", "Business - Governmental
Regulation", "Business - Patents, Trademarks, Licenses and Proprietary
Property", "Business - Service Agreements", Business - Licenses and
Collaboration Agreements", "Business - Environmental Matters",
"Business - Legal Proceedings" and "Certain U.S. Federal Income Tax
Consequences to Non-U.S. Holders of Common Stock," insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.
(i) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms.
(j) The Company is not an "investment company" as defined in
the Investment Company Act of 1940, as amended.
(k) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriter in the manner
contemplated herein and in the Prospectus.
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(l) Neither the sale of the Securities nor the consummation of
any other of the transactions herein contemplated nor the fulfillment
of the terms hereof will conflict with, result in a breach or violation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to, (i) the
charter or by-laws of the Company or any of the Subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of the Subsidiaries
is a party or bound or to which their property is subject, or (iii) any
statute, law, rule, regulation, judgment, order or decree applicable to
the Company or any of the Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of the Subsidiaries or any
of its or their properties; except, in the case of clause (ii) or
(iii), for any such conflict, breach, violation or imposition that
would not have a Material Adverse Effect.
(m) Except for those rights contained in the Registration
Rights Agreement, dated as of July 17, 2000, as amended as of June 30,
2003, by and between the Company and Endo Pharma LLC (the "Registration
Rights Agreement"), no holders of securities of the Company have rights
to the registration of any such securities. Pursuant to the Shelf
Registration Agreement between the Company and Endo Pharma LLC, dated
April 30, 2004, as amended, and Section 5.6(d) of the Amended and
Restated Employee Stockholder Agreement, dated June 5, 2003, as
amended, no demand is being exercised by Endo Pharma LLC and the rights
granted under the Registration Rights Agreement do not apply to the
Registration Statement.
(n) The consolidated historical financial statements and
schedules of the Company incorporated by reference in the Prospectus
and the Registration Statement present fairly in all material respects
the financial condition, results of operations and cash flows of the
Company and its consolidated subsidiaries as of the dates and for the
periods indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein).
The selected consolidated financial data set forth under the caption
"Selected Financial Data" incorporated by reference in the Prospectus
and Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included
therein.
(o) Except as set forth in the Prospectus, no action, suit or
proceeding by or before any court or governmental agency, authority or
body or any arbitrator, including, without limitation, the United
States Food and Drug Administration (the "FDA") and United States Drug
Enforcement Agency (the "DEA"), involving the Company or any of the
Subsidiaries or its or their respective properties is pending or, to
the best knowledge of the Company, threatened that (i) could have a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii)
could have a Material Adverse Effect.
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(p) The Company and each of the Subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations
as presently conducted.
(q) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) except as set forth in the Prospectus,
any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
such Subsidiary or any of its properties; except, in the case of clause
(ii) or (iii), for any such violation or default that would not have a
Material Adverse Effect.
(r) Deloitte & Touche LLP, who has certified certain financial
statements of the Company, and delivered its report with respect to the
audited consolidated financial statements and schedules incorporated by
reference in the Prospectus, are independent public accountants with
respect to the Company, within the meaning of the Act and the
applicable published rules and regulations thereunder.
(s) Except for the New York State transfer tax, there are no
transfer taxes or other similar fees or charges under Federal law or
the laws of any state, or any political subdivision thereof, required
to be paid in connection with the execution and delivery of this
Agreement or the sale by the Selling Stockholders of the Securities
hereunder.
(t) Each of the Company and the Subsidiaries has filed all
foreign, Federal, state and local tax returns that are required to be
filed or has requested extensions thereof (except in any case in which
the failure so to file would not have a Material Adverse Effect) and
has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as would not
have a Material Adverse Effect.
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(u) No labor problem or dispute with the employees of the
Company or any of the Subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or the Subsidiaries'
principal suppliers, contractors or customers, in each case that could
have a Material Adverse Effect.
(v) The Company and each of the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the business
in which they are engaged; and the Company and each such Subsidiary
believes that it will be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(w) Except as set forth in the Prospectus, (A) the Company and
the Subsidiaries possess all permits, licenses, provider numbers,
certificates, approvals, consents, orders, certifications and other
authorizations (collectively, "Governmental Licenses") issued by, and
have made all declarations and filings with, the appropriate Federal,
state, local or foreign regulatory agencies or bodies, including
without limitation, the FDA and the DEA, necessary to conduct the
business now operated by the Company and the Subsidiaries except where
the failure to possess such Governmental Licenses or to make such
declarations and filings would not result in a Material Adverse Effect;
the Company and the Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, individually and in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Material Adverse Effect;
and (B) neither the Company nor any Subsidiary has received any notice
of proceedings relating to the revocation or modification of any such
Governmental Licenses which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(x) The Company and each of its Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
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(y) The Company has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities in violation of the Exchange Act.
(z) Except as set forth in the Prospectus, the Company, the
Subsidiaries and each of the research and development, manufacturing
and other facilities leased or operated by them (there being no such
facilities owned by the Company and the Subsidiaries) (i) are in
compliance with any and all applicable foreign, Federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses, (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, and (iv) are not subject to liabilities and
costs associated with compliance by them with Environmental Laws,
except where such non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals, or liabilities
or costs would not, individually and in the aggregate, have a Material
Adverse Effect. Neither the Company, the Subsidiaries nor any such
facility has received notice that it has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, in any proceeding
currently pending.
(aa) Each of the Company and the Subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of Section
302 of the United States Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and the Subsidiaries are eligible to
participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations. Neither the Company nor any
Subsidiary has incurred any unpaid liability to the Pension Benefit
Guaranty Corporation (other than for the payment of premiums in the
ordinary course) or to any such plan under Title IV of ERISA.
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(bb) The Company and the Subsidiaries own, have rights under,
license or have other rights to use, on reasonable terms, all patents,
patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of their business as now conducted; and neither the Company nor any of
the Subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property, which infringement or conflict, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(cc) Neither the Company nor any of the Subsidiaries have
failed to file with applicable regulatory authorities (including, but
not limited to, the FDA and DEA) any statement, report, information or
form required by any applicable law, regulation or order, except where
the failure to file or to be so in compliance would not, individually
and in the aggregate, have a Material Adverse Effect. No deficiencies
have been asserted by any regulatory commission, agency or authority
with respect to any such filings or submissions, except for any such
failures to be in compliance or deficiencies which would not,
individually and in the aggregate, have a Material Adverse Effect.
(dd) The Company has established a compliance program
(including a written compliance policy) to assist the Company and the
Subsidiaries and their respective directors, officers and employees in
complying with applicable regulatory agency guidelines (including,
without limitation, those regulations and guidelines published by FDA
and DEA), and to provide compliance policies governing applicable areas
for pharmaceutical companies.
(ee) Except as disclosed in the Registration Statement and the
Prospectus, the Company and the Subsidiaries do not have any material
lending or other relationship with any bank or lending affiliate of the
Underwriter.
(ff) The sale of the Securities will result in the occurrence
of a liquidity event under the amended and restated tax sharing
agreement, dated as of April 30, 2004, by and among the Company, Endo
Pharmaceuticals and Endo Pharma LLC as described in the Registration
Statement and the Prospectus; the amounts payable by the Company to
Endo Pharma LLC under the tax sharing agreement as a result thereof
will be as described in the Registration Statement and the Prospectus.
Any certificate signed by any officer of the Company and delivered to
the Underwriter or counsel for the Underwriter in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to the Underwriter.
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(ii) Each Selling Stockholder represents and warrants to, and agrees
with, the Underwriter that:
(a) Such Selling Stockholder is, or, in the case of any Stock
Option Selling Stockholder, prior to the Closing Date or any Settlement
Date for Option Securities, will be, the record and beneficial owner of
the Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims and has, or, in the case of any Stock
Option Selling Stockholder, prior to the Closing Date or any Settlement
Date for Option Securities, will have, duly endorsed, or will have
required the attorney-in-fact to duly endorse, such Securities in
blank, and, assuming that the Underwriter acquires its interest in the
Securities from such Selling Stockholder without notice of any adverse
claim (within the meaning of Section 8-105 of the New York Uniform
Commercial Code as in effect in the State of New York from time to time
("UCC")), the Underwriter, having purchased such Securities delivered
on the Closing Date or any Settlement Date for Option Securities to The
Depository Trust Company or other securities intermediary by making
payment therefor as provided herein and, having had such Securities
credited to the securities account or accounts of the Underwriter
maintained with The Depository Trust Company or such other securities
intermediary, will have acquired a security entitlement (within the
meaning of Section 8-102(a)(17) of the UCC) to such Securities
purchased by the Underwriter, and no action based on an adverse claim
(within the meaning of Section 8-105 of the UCC) may be asserted
against the Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) Certificates in negotiable form for such Selling
Stockholder's Securities have been, or, in the case of any Stock Option
Selling Stockholder, prior to the Closing Date or any Settlement Date
for Option Securities, will have been, placed in custody, for delivery
pursuant to the terms of this Agreement, under a Custody Agreement and
Power of Attorney duly authorized (if applicable), executed and
delivered by such Selling Stockholder, in the forms heretofore
furnished to you (each a "Custody Agreement") with American Stock
Transfer & Trust Company as Custodian (the "Custodian"); the Securities
represented by the certificates so held or to be held, as the case may
be, in custody for each Selling Stockholder are or will be, as the case
may be, subject to the interests hereunder of the Underwriter; the
arrangements for custody and delivery of such certificates, made by
such Selling Stockholder hereunder and under the Custody Agreement, are
not subject to termination by any acts of such Selling Stockholder, or
by operation of law, whether by the death or incapacity of such Selling
Stockholder, or the occurrence of any other event; and if any such
death, incapacity or any other such event shall occur before the
delivery of such Securities hereunder, certificates for the Securities
will be delivered by the Custodian in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such
death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such death,
incapacity or other event.
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(d) To the best knowledge of such Selling Stockholder, no
consent, approval, authorization or order of any court or governmental
agency or body is required for consummation by such Selling Stockholder
of the transactions contemplated herein, except such as may have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriter and such other
approvals as have been obtained.
(e) To the best knowledge of such Selling Stockholder, neither
the sale of the Securities being sold by such Selling Stockholder nor
the consummation of any other of the transactions herein contemplated
by such Selling Stockholder or the fulfillment of the terms hereof by
such Selling Stockholder will conflict with, result in a breach or
violation of, or constitute a default under any law or the charter or
by-laws or other organizational documents, in each case if applicable,
of such Selling Stockholder or the terms of any indenture or other
agreement or instrument to which such Selling Stockholder or any of its
subsidiaries (if applicable) is a party or bound, or any judgment,
order or decree applicable to such Selling Stockholder or any of its
subsidiaries (if applicable) of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder or any of its subsidiaries
(if applicable).
(f) In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Selling Stockholder
specifically for use in connection with the preparation thereof, such
Selling Stockholder hereby makes the same representations and
warranties to the Underwriter as the Company makes to the Underwriter
under paragraph (i)(b) of this Section; such Selling Stockholder does
not possess any material non-public information concerning the Company
or any of its subsidiaries which is not set forth in the Prospectus or
any supplement thereto. The Underwriter acknowledges and agrees that,
for all purposes of this Agreement, the only information furnished to
the Company by or on behalf of any Selling Stockholder specifically for
use in the Registration Statement or the Prospectus or any amendment or
supplement thereto are the statements pertaining to the number of
shares owned and the number of shares proposed to be sold by such
Selling Stockholder under the caption "Principal and Selling
Stockholders."
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Any certificate signed by or on behalf of any Selling Stockholder and
delivered to the Underwriter or counsel for the Underwriter in connection with
the offering of the Securities shall be deemed a representation and warranty by
such Selling Stockholder, as to matters covered thereby, to the Underwriter.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Stockholders agree,
severally and not jointly, to sell to the Underwriter, and the Underwriter
agrees to purchase from the Selling Stockholders, at a purchase price of $17.46
per share, the Underwritten Securities.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Stockholders named
in Schedule I hereby grant an option to the Underwriter to purchase up to
1,650,000 Option Securities at the same purchase price per share as the
Underwriter shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriter. Said option may be exercised in whole or in part
at any time on or before the 30th day after the date of the Prospectus upon
written notice by the Underwriter to the Company and the Selling Stockholders
setting forth the number of shares of the Option Securities as to which the
Underwriter is exercising the option and the Settlement Date. The maximum number
of Option Securities which the Selling Stockholders agree to sell is set forth
in Schedule I hereto. In the event that the Underwriter exercises less than its
full over-allotment option, the number of Option Securities to be sold by each
Selling Stockholder listed on Schedule I shall be, as nearly as practicable, in
the same proportion as the maximum number of Option Securities to be sold by
each Selling Stockholder and the number of Option Securities to be sold.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on August 9,
2004, or at such time on such later date not more than three Business Days after
the foregoing date as the Underwriter shall designate, which date and time may
be postponed by agreement among the Underwriter, the Company and the Selling
Stockholders, being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Underwriter against payment by the Underwriter
of the aggregate purchase price of the Securities being sold by the Selling
Stockholders to or upon the order of the Selling Stockholders by wire transfer
payable in same-day funds to the accounts of the Custodian, one account
established for the Advance Shares (as defined in the Custody Agreement), the
second account established for the Goldman Advance Shares (as defined in the
form of Custody Agreement entered into among the Custodian, Goldman, Sachs & Co.
and each of Carol A. Ammon, Peter A. Lankau, David A.H. Lee, Jeffrey R. Black
and Caroline B. Manogue) and the third account established for Securities other
than the Advance Shares and the Goldman Advance Shares. Delivery of the
Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the Underwriter shall
otherwise instruct.
13
The Company will pay all applicable state transfer taxes, if any,
involved in the transfer to the Underwriter of the Securities to be purchased by
it from the Selling Stockholders, and the Underwriter will pay any additional
stock transfer taxes involved in further transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Selling Stockholders named
in Schedule I will deliver the Option Securities (at the expense of the Company)
to the Underwriter, at 383 Madison Avenue, New York, New York, on the date
specified by the Underwriter (which shall be within three Business Days after
exercise of said option) for the account of the Underwriter, against payment by
the Underwriter of the purchase price thereof to or upon the order of the
Selling Stockholders named in Schedule I hereto by wire transfer payable in
same-day funds to the accounts of the Custodian, one account established for the
Advance Shares, the second account established for the Goldman Advance Shares
and the third account established for Securities other than the Advance Shares
and the Goldman Advance Shares. If settlement for the Option Securities occurs
after the Closing Date, the Company and the Selling Stockholders will deliver to
the Underwriter on the Settlement Date for the Option Securities, and the
obligation of the Underwriter to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by the Underwriter. It is understood that the Underwriter
proposes to offer the Securities for sale to the public as set forth in the
Prospectus.
5. Agreements. (i) The Company agrees with the Underwriter that:
14
(a) Prior to the termination of the offering of the
Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished the Underwriter
a copy for its review prior to filing and will not file any such
proposed amendment or supplement to which the Underwriter reasonably
objects. Subject to the foregoing sentence, the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Underwriter of such timely filing. The Company will
promptly advise the Underwriter (1) when the Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant
to Rule 424(b) or when any Rule 462(b) Registration Statement shall
have been filed with the Commission, (2) when, prior to termination of
the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (3) of any request
by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Prospectus or for any additional information, (4) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (5) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company
promptly will (1) notify the Underwriter of any such event, (2) prepare
and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance, and (3)
supply any supplemented Prospectus to the Underwriter in such
quantities as the Underwriter may reasonably request in writing;
provided that in case the Underwriter is required to deliver a
Prospectus in connection with sales of any of the Securities at any
time nine months or more after the Execution Time, any preparation and
delivery of any amended or supplemented Prospectus shall be at the
expense of the Underwriter.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Underwriter an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
15
(d) The Company will furnish to the Underwriter and counsel
for the Underwriter four signed copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus
by the Underwriter or any dealer may be required by the Act, as many
copies of the Prospectus and any supplement thereto as the Underwriter
may reasonably request in writing.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Underwriter may reasonably designate in writing
and will maintain such qualifications in effect so long as required for
the distribution of the Securities; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out
of the offering or sale of the Securities, in any jurisdiction where it
is not now so subject.
(f) The Company will not, without the prior written consent of
the Underwriter, offer, sell, contract to sell, pledge, or otherwise
dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company
or any person in privity with the Company or any affiliate of the
Company) directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Commission in
respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act, any other shares of Common Stock or any
securities convertible into, or exercisable, or exchangeable for,
shares of Common Stock; or publicly announce an intention to effect any
such transaction, for a period of 45 days after the date of this
Agreement, provided, however, that the Company and Endo Pharma LLC may
issue and sell Common Stock pursuant to any employee stock option plan,
stock ownership plan or dividend reinvestment plan of the Company or
Endo Pharma LLC in effect at the Execution Time and the Company may
issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities in violation of the Exchange Act.
16
(h) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), the Prospectus, and each
amendment or supplement to either of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, the Prospectus, and all amendments or supplements to either
of them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iii) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes
in connection with the original issuance and sale of the Securities;
(iv) the printing (or reproduction) and delivery of this Agreement, any
blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities; (v) the registration of the Securities under the Exchange
Act and the listing of the Securities on the Nasdaq National Market;
(vi) any registration or qualification of the Securities for offer and
sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel
for the Underwriter relating to such registration and qualification);
(vii) any filings required to be made with the National Association of
Securities Dealers, Inc. (including filing fees and the reasonable fees
and expenses of counsel for the Underwriter relating to such filings);
(viii) the transportation and other expenses incurred by or on behalf
of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of
the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company and the Selling
Stockholders (as among the Selling Stockholders, as may be determined
by Endo Pharma LLC); and (x) all other costs and expenses incident to
the performance by the Company and the Selling Stockholders of their
obligations hereunder (as among the Selling Stockholders, as may be
determined by Endo Pharma LLC).
(ii) Each Selling Stockholder agrees with the Underwriter
that:
(a) Such Selling Stockholder will not, without the prior
written consent of the Underwriter, offer, sell, contract to sell,
pledge or otherwise dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the undersigned or
any affiliate of the undersigned or any person in privity with the
undersigned or any affiliate of the undersigned), directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in
respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder with respect to, any shares of capital stock of
the Company or any securities convertible into, or exercisable or
exchangeable for such capital stock, or publicly announce an intention
to effect any such transaction, for a period of 45 days after the date
of the Underwriting Agreement, other than Securities to be sold by such
Selling Stockholder hereunder; except, with respect to Endo Pharma LLC,
subject to the limited exceptions described in the lock-up letter
executed by Endo Pharma LLC.
17
(b) Such Selling Stockholder will not take, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so as long as
delivery of a prospectus relating to the Securities by an underwriter
or dealer may be required under the Act, of any change in information
in the Registration Statement or the Prospectus relating to such
Selling Stockholder.
6. Conditions to the Obligations of the Underwriter. The obligations of
the Underwriter to purchase the Underwritten Securities and the Option
Securities shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders contained
herein as of the Execution Time and the Closing Date and any Settlement Date
pursuant to Section 3 hereof, to the accuracy of the statements of the Company
and the Selling Stockholders made in any certificates pursuant to the provisions
hereof, to the performance by the Company and the Selling Stockholders of their
respective obligations hereunder and to the following additional conditions:
(a) The Registration Statement, including any 462(b) Registration
Statement, shall have become effective; the Prospectus, and any supplement
thereto, will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Skadden, Arps, Slate,
Meagher & Flom LLP, counsel for the Company, and Caroline B. Manogue, General
Counsel of the Company, to have furnished to the Underwriter their opinions,
dated the Closing Date and addressed to the Underwriter, in the form attached
hereto as Exhibits B and C, respectively.
18
(c) The Company shall have requested and caused (i) Wiley Rein &
Fielding, special regulatory counsel for the Company, to have furnished to the
Underwriter their opinion, dated the Closing Date and addressed to the
Underwriter, in the form attached hereto as Exhibit D and (ii) (A) Hedman &
Costigan P.C., and (B) Dilworth & Barrese LLP, special intellectual property
counsels for BML and the Company, respectively, to have furnished to the
Underwriter their opinions, each dated the Closing Date and addressed to the
Underwriter, in the form attached hereto as Exhibit E .
(d) The Selling Stockholders shall have requested and caused James J.
Connors II, Esq., Kleinberg, Kaplan, Wolff & Cohen and Skadden, Arps, Slate,
Meagher & Flom LLP and such other counsel to the Selling Stockholders as are
reasonably acceptable to the Underwriter, to have furnished to the Underwriter
their respective opinions dated the Closing Date and addressed to the
Underwriter, covering the matters specified in Exhibit F.
(e) The Underwriter shall have received from Debevoise & Plimpton LLP,
counsel for the Underwriter, such opinion or opinions, dated the Closing Date
and addressed to the Underwriter, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Underwriter may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Underwriter a certificate
of the Company, signed by the Chief Executive Officer and the Chief Financial
Officer of the Company, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
19
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus (exclusive of
any supplement thereto), there has been no Material Adverse Effect.
(g) The Selling Stockholders shall have furnished to the Underwriter a
certificate, signed on behalf of the Selling Stockholders and delivered pursuant
to the Custody Agreement, dated the Closing Date, to the effect that the
representations and warranties of the Selling Stockholders in this Agreement are
true and correct on and as of the Closing Date with the same effect as if made
on the Closing Date.
(h) The Company shall have requested and caused Deloitte & Touche LLP
to have furnished to the Underwriter a letter, at the Closing Date, dated the
Closing Date, in form and substance satisfactory to the Underwriter,
substantially in the same form and substance as the letters furnished by them in
connection with the 2003 offering of common stock by certain selling
stockholders of the Company, updated accordingly to cover periods subsequent to
such offering to the satisfaction of the Underwriter.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (f) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the condition
(financial or otherwise), earnings, business or properties of the Company and
the Subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Underwriter, so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(j) Prior to the Closing Date, the Company and the Selling Stockholders
shall have furnished to the Underwriter such further information, customary
closing and secretary certificates and documents as the Underwriter may
reasonably request, including, without limitation, Forms W-8 or W-9, as
required, from the Selling Stockholders.
(k) The Securities shall have been duly approved for quotation on the
Nasdaq National Market, and satisfactory evidence of such actions shall have
been provided to the Underwriter.
20
(l) Prior to the Execution Time, the Company shall have furnished to
the Underwriter a letter substantially in the form of Exhibit A hereto from Endo
Pharma LLC and each executive officer and director of the Company, addressed to
the Underwriter.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriter and counsel for the Underwriter, this Agreement
and all obligations of the Underwriter hereunder may be canceled at, or at any
time prior to, the Closing Date by the Underwriter. Notice of such cancellation
shall be given to the Company and the Selling Stockholders in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Company, at 4 Times Square, New York, New York 10036, on the Closing Date.
7. Reimbursement of the Underwriter's Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriter set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Underwriter, the Company will reimburse
the Underwriter on demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been reasonably incurred by
it in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter,
the directors, officers, employees and agents of the Underwriter and each person
who controls the Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or in any amendment thereof, or in the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by the Underwriter specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
21
(b) Each Selling Stockholder severally agrees to indemnify and hold
harmless the Underwriter, the directors, officers, employees and agents of the
Underwriter and each person who controls the Underwriter within the meaning of
either the Act or the Exchange Act to the same extent as the foregoing indemnity
to the Underwriter, but only with reference to written information furnished to
the Company by or on behalf of such Selling Stockholder specifically for use in
the documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any such Selling Stockholder may
otherwise have.
(c) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of either
the Act or the Exchange Act and each Selling Stockholder, to the same extent as
the foregoing indemnity to the Underwriter, but only with reference to written
information relating to the Underwriter furnished to the Company by or on behalf
of the Underwriter specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which the Underwriter may otherwise have. The Company and each of the
Selling Stockholders acknowledge that the statements set forth in the third and
penultimate paragraphs of the cover page of the Prospectus Supplement regarding
a commission equivalent and delivery of the Securities, respectively, and, under
the heading "Underwriting" in the Prospectus Supplement, the sentence related to
a commission equivalent and the paragraphs related to short sales, stabilization
and syndicate covering transactions in the Prospectus constitute the only
information furnished in writing by or on behalf of the Underwriter for
inclusion in the Prospectus.
22
(d) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b) or (c) above unless and to the extent it did
not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding. If at any time
an indemnified party shall have requested that an indemnifying party reimburse
the indemnified party for fees and expenses of counsel as contemplated by this
paragraph, the indemnifying party shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the indemnifying party of such
request and (ii) the indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement.
23
(e) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Stockholders and the
Underwriter agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company, one or more of the Selling Stockholders and the Underwriter may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and by the
Underwriter on the other from the offering of the Securities; provided, however,
that in no case shall the Underwriter be responsible for any amount in excess of
the underwriting discount or commission applicable to the Securities purchased
by the Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company, the Selling
Stockholders and the Underwriter shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company, the Selling Stockholders and of the Underwriter in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company and the Selling Stockholders on the one hand shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses) received
by the Selling Stockholders, and benefits received by the Underwriter on the
other shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company or the Selling Stockholders on the one hand or the Underwriter on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Selling Stockholders and the Underwriter agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls the Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of the Underwriter shall have the same rights to contribution as the
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (e). Notwithstanding the
foregoing, no Selling Stockholder shall be obligated to make contributions
hereunder which in the aggregate exceed the amount for which such Selling
Stockholder would have been liable pursuant to paragraph (b), as limited by
paragraph (f), of this Section 8 had indemnification been available thereunder.
(f) The liability of each Selling Stockholder under such Selling
Stockholders' representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the initial public offering price, net of
underwriting discounts, of the Securities sold by such Selling Stockholder to
the Underwriter.
24
9. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Underwriter, by notice given to the Company by the
Underwriter, prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or the Nasdaq National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Underwriter, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriter set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriter, will be mailed,
delivered or telefaxed to Bear, Stearns & Co. Inc., 383 Madison Avenue, New
York, New York 10179, Attention: Syndicate Desk and copied to Debevoise &
Plimpton LLP, 919 Third Avenue, New York, NY, 10022, Attention: Peter J.
Loughran, Esq., or, if sent to the Company, will be mailed, delivered or
telefaxed to Endo Pharmaceuticals Holdings Inc. (fax no.: (610) 558-9682) and
confirmed to the General Counsel, Endo Pharmaceuticals Holdings Inc. at 100
Painters Drive, Chadds Ford, PA 19317, Attention: Caroline B. Manogue, Esq., and
copied to Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, NY
10036, Attention: Stacey J. Kanter, Esq., or if sent to the Selling
Stockholders, will be mailed delivered, or telefaxed to Kelso & Company (fax
no.: (212) 233-2379) and confirmed to the General Counsel, Kelso & Company at
320 Park Avenue, 24th Floor, New York, NY 10022, Attention: James J. Connors II,
Esq. and to Caroline B. Manogue, Esq., 100 Painters Drive, Chadds Ford, PA
19317.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
25
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
14. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
15. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
16. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date (which shall be the date
of the Prospectus) and time that this Agreement is executed and
delivered by the parties hereto.
"Prospectus" shall mean, collectively, the prospectus included
in the Registration Statement at the Effective Date and the final
prospectus and prospectus supplement relating to the Securities that is
first filed pursuant to Rule 424(b) after the Execution Time, in each
case, as amended or supplemented.
26
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean
such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be.
"Rule 415", "Rule 424", and "Rule 462" refer to such rules
under the Act.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the Underwriter.
Very truly yours,
Endo Pharmaceuticals Holdings Inc.
By:_________________________________________
Name:
Title:
Endo Pharma LLC
By:_________________________________________
Name:
Title:
Attorney-in-Fact acting on behalf of the
Selling Stockholders
By:_________________________________________
As Attorney-in-Fact acting on behalf of
the Selling Stockholders named in
Schedule I hereto and for herself
28
The foregoing Agreement is
hereby confirmed and
accepted as of the date
first above written.
By: Bear, Stearns & Co. Inc.
By:_________________________________________
Name:
Title:
SCHEDULE I
Number of Underwritten Maximum Number of
Name of Selling Stockholder Securities Being Sold Option Securities to be Sold
- --------------------------- ----------------------- ----------------------------
Acosta, Randall 452 68
Ali-Jackson, Kamil 396 59
118
Allen, Doris 786
Ammon, Carol A. 1,328,877 199,332
Ammon, Robert D. 8,583 1,287
Baldoz, Celia-Olivia 3,128 469
Ball, William 718 108
Bann, Deborah 4,346 652
Bennett, Richard L. 7,456 1,118
Black, Jeffrey R. 440,400 66,060
Bloom, Eric E. 36,432 5,465
Carlucci, Toni Ann 1,267 190
Chang, Sou-Chan 16,122 2,418
Combs, Olive A. 2,807 421
Comley, Patricia 786 118
Connell, Jill M. 9,939 1,491
Cowan, Steven D. 7,896 1,184
DasGupta, Sudhendu 5,186 778
Datta, Dipankar 22,009 3,301
Dawson, Edith R. 4,042 606
Dazenski, Michael 2,337 350
DeStasio, Joseph 786 118
Doyle, Barbara Jean 1,267 190
Dunk, Jeanmarie 8,891 1,334
Endo Pharma LLC 6,974,379 1,046,157
Felton, Douglas 5,334 800
Gardner, Dennis W. 1,961 294
Grigsby, Michael 718 108
GST Taxable Marital Trust under
the Inez L. Kimmel Receptacle
Trust ui June 18, 2004 36,667 5,500
Hassell, Robert M. 2,773 416
Hein, II, William A. 10,687 1,603
Hill, IV, William M. 7,743 1,162
Howard-Sparks, Michelle 2,743 412
Hurd, Linda A. 3,817 573
Number of Underwritten Maximum Number of
Name of Selling Stockholder Securities Being Sold Option Securities to be Sold
- --------------------------- ----------------------- ----------------------------
Hyatt, Michael 36,667 5,500
Hyatt Family Trust 18,337 2,750
Ivison, III, Sterling H. 8,240 1,236
Jamal, Shahin 2,807 421
Jeannis, Marie 786 118
Jim, Fai 2,743 411
Johnson, Melanie F. 1,958 294
Jones, Charles D. 1,846 277
Jurasits, Adelheid 1,958 294
Kao, Huaihung 11,031 1,655
Keenan, Arlene K. 2,913 437
Kitlinski, Linda 9,805 1,471
Koch, Britta A. 3,936 590
Kornfeld, Jeffrey S. 1,958 294
Koumou, Janis D. 3,660 549
Lamborn, Kathy S. 3,993 599
Lankau, Peter A. 54,764 8,214
LaRegina, Jessica Courtney 2,743 411
LaSusa, Frank T. 7,511 1,127
Laudadio, Charles 1,299 195
Lee, David A.H. 497,455 74,618
Lubin, Jeff 928 139
Ludwig, Tracy 1,787 268
MacDonald, Mariann T. 1,121,482 168,222
Manogue, Caroline B. 31,723 4,758
McArdle, Debra 30,045 4,507
McCaughan, Kevin M. 22,163 3,324
McKelligot, Betty 3,733 560
Melissa Kimmel Trust 15,400 2,310
Moore, Judith A. 1,613 242
Papa, Donna M. 5,818 873
Patel, Rita G. 2,743 411
Pathak, Ranjana B. 8,915 1,337
Pedagna, Jean 2,774 416
Persad, Alvin 1,267 190
Rahman, Mohammed 2,743 411
Rickman, Donna 1,613 242
Rouvas, Erica 3,768 565
Sammler, Thomas M. 4,522 678
Schoen, Mary Ann T. 1,285 193
Segura, John 16,141 2,421
Skalski, Gary C. 1,127 169
Smiley, April 1,846 277
Number of Underwritten Maximum Number of
Name of Selling Stockholder Securities Being Sold Option Securities to be Sold
- --------------------------- ----------------------- ----------------------------
Stelter, Jeanne 3,353 503
Stewart, Robert 786 118
Sullivan, Kathleen 1,285 193
Taormina, Margaret 1,623 243
Todd Kimmel Trust 12,467 1,870
Tormo, Vince 1,675 251
Torosian, George 3,879 582
Treisner, George H. 21,173 3,176
Trivedi, Dharmishta 4,254 638
Utecht, Kenneth 9,161 1,374
Van Nostrand, Patricia A. 3,841 576
Vandal, Eric J. 1,656 248
Walker, Lisa M. 2,973 446
Zeng, Yadi 5,151 773
Zheng, Lynn 5,151 773
EXHIBIT A
[FORM OF LOCK-UP AGREEMENT]
[LETTERHEAD OF ENDO PHARMA LLC OR OFFICER/DIRECTOR OF
ENDO PHARMACEUTICALS HOLDINGS INC.]
Endo Pharmaceuticals Holdings Inc.
Public Offering of Common Stock
, 2004
Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, NY 10179
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among Endo
Pharmaceuticals Holdings Inc., a Delaware corporation (the "Company"), the
Selling Stockholders named in Schedule I thereto and you, relating to an
underwritten public offering of Common Stock, $.01 par value (the "Common
Stock"), of the Company.
In order to induce you to enter into the Underwriting Agreement, the
undersigned will not, without your prior written consent, offer, sell, contract
to sell, pledge or otherwise dispose of (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the undersigned or any affiliate of the undersigned
or any person in privity with the undersigned or any affiliate of the
undersigned), directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Securities and Exchange
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of capital stock of the Company or any securities
convertible into, or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period of
45 days after the date of the Underwriting Agreement.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
2
Yours very truly,
[SIGNATURE OF ENDO PHARMA
LLC/OFFICER/DIRECTOR]
[NAME AND ADDRESS OF ENDO PHARMA LLC/OFFICER/DIRECTOR]
EXHIBIT B
FORM OF OPINION OF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP
TO BE DELIVERED PURSUANT TO SECTION 6(b)
[Underwriter]
Re: Endo Pharmaceuticals Holdings Inc.
Public Offering of
Common Stock, par value $.01 per share
Ladies and Gentlemen:
We have acted as special counsel to Endo Pharmaceuticals
Holdings Inc. a Delaware corporation (the "Company"), in connection with the
purchase by the underwriter (the "Underwriter") named in the Underwriting
Agreement, dated June [ ], 2004 (the "Underwriting Agreement"), between the
Underwriter, the Selling Stockholders named in Schedule I thereto and the
Company, and the sale by the Selling Stockholders to the Underwriter of [ ]
shares (the "Shares") of the Company's common stock, par value $.01 per share
("Common Stock").
This opinion is being rendered pursuant to Section 6(b) of the
Underwriting Agreement.
In connection with this opinion, we have examined and relied
on originals or copies, certified or otherwise identified to our satisfaction,
of the following:
(i) the registration statement on Form S-3 (File No.
333-115032) of the Company relating to the Shares filed with the Securities and
Exchange Commission (the "Commission") on May 30, 2004 under the Securities Act
of 1933 (the "Securities Act"), and Amendment No. 1 thereto filed with the
Commission on June 11, 2004 and Amendment No. 2 thereto filed with the
Commission on June 14, 2004], (such registration statement, including the
exhibits thereto, schedules thereto, if any, and the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act, at
the time of effectiveness, being hereinafter referred to as the "Registration
Statement"; any registration statement filed pursuant to Rule 462(b) of the
General Rules and Regulations under the Securities Act (the "Rules and
Regulations") is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement);
(ii) the final prospectus dated [ ], 2004, relating to the
Shares, in the form filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations, including the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities (the "Prospectus");
B-1
(iii) a specimen certificate evidencing the Common Stock;
(iv) an executed copy of the Underwriting Agreement;
(v) the Amended and Restated Certificate of Incorporation of
the Company, as currently in effect (the "Certificate of Incorporation");
(vi) the Amended and Restated By-laws of the Company, as
currently in effect (the "By-laws");
(vii) resolutions of the Board of Directors of the Company
dated [ ]; and
(viii) [documents incorporated by reference].
We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company and
such agreements, certificates or records of public officials, certificates of
officers or other representatives of the Company and others, and such other
documents, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. In making our
examination of executed documents, we have assumed that the parties thereto,
other than the Company, had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof on such
parties. As to any facts material to the opinions expressed herein which we did
not independently establish or verify, we have relied upon statements and
representations of officers and other representatives of the Company and others.
In rendering the opinion set forth in paragraph 7 below, we
have assumed that the Shares will be registered by the transfer agent and
registrar for the Common Stock. In rendering the opinion set forth in paragraph
6 below, we have assumed that the Company has received the entire amount of the
consideration contemplated by the resolutions of the Board of Directors of the
Company authorizing the original issuance of all shares of Common Stock, par
value $.01 per share and that the certificates evidencing such shares as
originally issued conform to the specimen certificate examined by us.
B-2
As used herein: (a) the term "Applicable Laws" means the
Delaware General Corporation Law (the "DGCL") and those laws, rules and
regulations of the State of New York and the federal laws of the United States
of America, in each case, which, in our experience, are normally applicable to
transactions of the type contemplated by the Underwriting Agreement, but without
our having made any special investigation concerning any other laws, rules or
regulations; provided that the term "Applicable Laws" does not include (1) any
federal or state securities or blue sky laws, (2) any antifraud laws or (3) the
rules and regulations of the National Association of Securities Dealers, Inc.;
(b) the term "Governmental Authorities" means any executive, legislative,
judicial, administrative or regulatory body of the State of New York, the State
of Delaware or the United States of America having jurisdiction over the Company
and the Subsidiaries (as defined in the Underwriting Agreement) under Applicable
Laws; (c) the term "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing or registration with, any Governmental
Authority required to be made or obtained by the Company or the Subsidiaries
pursuant to Applicable Laws, other than any consent, approval, license,
authorization, validation, filing or registration which may have become
applicable as a result of your involvement in the transactions contemplated by
the Underwriting Agreement or because of your legal or regulatory status or
because of any other facts specifically pertaining to you; (d) the term
"Applicable Orders" means those judgments, orders and decrees listed on Schedule
I hereto; and (e) "Applicable Contracts" means those contracts and agreements
listed on Schedule II hereto. We note that certain of the Applicable Contracts
may be governed by laws other than the law of the State of New York; we do not
express any opinion with respect to the interpretation, validity, binding nature
or enforceability of such Applicable Contracts and we do not express any opinion
as to the effect such laws may have on the opinions and statements set forth
herein.
Members of our firm are admitted to the Bar of the State of
New York, and we do not express any opinion as to the laws of any jurisdiction
other than the laws of the State of New York, the DGCL and the federal laws of
the United States of America to the extent referred to specifically herein.
Insofar as the opinions expressed herein relate to matters governed by laws
other than those referred to in the preceding sentence, we have assumed, but
without having made any independent investigation, that such laws do not affect
any of the opinions set forth herein. The opinions expressed herein are based on
laws in effect on the date hereof, which laws are subject to change with
possible retroactive effect.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Delaware. The opinion set forth in this paragraph 1 with respect to the valid
existence and good standing of the Company under the laws of the State of
Delaware is based solely upon our review of a certificate, dated [ ], 2004, of
the Secretary of State of the State of Delaware and a bring-down facsimile,
dated [ ], 2004, from the Secretary of State of the State of Delaware.
B-3
2. The Company has the corporate power and corporate authority
to conduct its business and to own and lease its properties, in each case as
described in the Prospectus.
3. The Company's authorized capitalization consists of
175,000,000 shares of Common Stock and 40,000,000 shares of preferred stock, par
value $.01 per share.
4. The authorized capital stock of the Company conforms as to
legal matters in all material respects to the description thereof contained in
the Prospectus under the caption "Description of Capital Stock."
5. All of the issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable and none of the outstanding shares of Common Stock was issued in
violation of the preemptive or similar rights of any securityholder of the
Company.
6. The Shares have been duly authorized and, when delivered to
and paid for by the Underwriters in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and nonassessable,
free and clear of any preemptive or similar subscription rights arising under
the Certificate of Incorporation, the By-laws, the DGCL or any Applicable
Contract.
7. The specimen certificate examined by us evidencing the
Common Stock complies in all material respects with the applicable requirements
of the Certificate of Incorporation, the By-laws and the DGCL.
8. Each of the Company and the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus.
9. To our knowledge, there are no legal or governmental
proceedings pending to which the Subsidiaries are a party or of which any
property of the Company of the Subsidiaries is subject that are required to be
disclosed in the Prospectus pursuant to Regulation S-K of the Rules and
Regulations that are not so disclosed. The opinion set forth in this paragraph 9
is based solely on our discussions with senior management of the Company and our
review of documents furnished to us by the Company and our reliance on the
representations and warranties of the Company contained in the Underwriting
Agreement; we have not made any other inquiries or investigations or any search
of the public docket records of any court, governmental agency or body or
administrative agency.
B-4
10. The statements set forth in the Prospectus under the
caption "Certain United States Federal Tax Considerations for Non-United States
Holders," insofar as such statements purport to summarize certain provisions of
the laws referred to therein, fairly summarize such provisions in all material
respects.
11. The Registration Statement, at the time it became
effective, and the Prospectus, as of its date, excluding the documents
incorporated by reference therein, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Securities Act
and the Rules and Regulations, except that in each case, we do not express any
opinion as to the financial statements, financial statement schedules or other
financial data included in the Registration Statement or Prospectus or excluded
therefrom and we do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained therein.
12. The documents incorporated by reference in the
Registration Statement and the Prospectus, when they became effective or were
filed with the Commission, as the case may be, appeared on their face to be
appropriately responsive in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations, except that in each case, we do not express any opinion as to the
financial statements, financial statement schedules or other financial data
included in the Registration Statement or Prospectus or excluded therefrom and
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained therein.
13. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
14. The Company is not an "investment company," as such term
is defined in the Investment Company Act of 1940, as amended.
15. No Governmental Approval is required for the sale of the
Shares by the Selling Stockholders pursuant to the Underwriting Agreement,
except such as have been made and obtained.
16. The execution and delivery by the Company of the
Underwriting Agreement and the performance of its obligations pursuant thereto
do not violate or conflict with, constitute a default under, or result in the
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to the Certificate of Incorporation, the By-laws, any
Applicable Contract, any Applicable Law or any Applicable Order. We do not
express any opinion, however, as to any financial ratios or tests or any aspect
of the financial condition or results of operations of the Company.
B-5
17. No holders of securities of the Company have any rights
under any [Applicable Contract] to have such securities included in the
Registration Statement.
We have been orally advised by representatives of the
Commission that the Registration Statement was declared effective under the
Securities Act at [ ] on [ ], 2004 and we have been orally advised by the
Commission that no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the best of our knowledge, no proceedings for
that purpose have been instituted or threatened by the Commission. The
Prospectus was filed with the Commission in the manner and within the time
period required by Rule 424(b) of the Rules and Regulations.
In addition, we have participated in conferences with officers
and other representatives of the Company, representatives of the independent
accountants for the Company and you and your counsel at which the contents of
the Registration Statement and the Prospectus and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check or
verification thereof (other than to the limited extent specified in paragraph 11
above) on the basis of the foregoing, no facts have come to our attention that
have led us to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date and as
of the date hereof, contained or contains an untrue statement of a material fact
or omitted or omits to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that we express no belief with respect to the financial
statements, financial statement schedules and other financial data included
therein or excluded therefrom or the exhibits to the Registration Statement.
This opinion is furnished to you solely for your benefit in
connection with the closing under the Underwriting Agreement occurring today and
is not to be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by any other person without our express written
permission.
Very truly yours,
B-6
Schedule I
Applicable Orders
B-7
Schedule II
Applicable Contracts
B-8
EXHIBIT C
FORM OF OPINION OF
CAROLINE B. MANOGUE
TO BE DELIVERED PURSUANT TO SECTION 6(b)
1. Each of the Company and the Subsidiaries is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or to be in good standing would not result in a Material
Adverse Effect. Except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
2. The statements contained or incorporated by reference in
the Prospectus under the headings "Risk Factors - Our ability to protect our
proprietary technology, which is vital to our business, is uncertain", "Business
- - Government Regulation", Business - Patents, Licenses and Proprietary
Information", "Business - Services Agreements", "Business - Licenses and
Collaboration Agreements", "Business - Environmental Matters" and
"Business-Legal Proceedings", insofar as such statements purport to summarize
legal matters, agreements, documents or proceedings discussed therein, are
accurate and fair summaries of such legal matters, agreements, documents and
proceedings.
3. No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection with the
sale of the Shares by the Selling Stockholders as contemplated by the
Underwriting Agreement, except as may be required under the securities and blue
sky laws in connection with the purchase and distribution of the Shares by the
Underwriters in the manner contemplated by the Underwriting Agreement and the
Prospectus.
4. The performance of the Company of its obligations under the
Underwriting Agreement as contemplated hereby will not conflict with, result in
a breach or violation of or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or the Subsidiaries pursuant to, (i) the
charter or by-laws of any of the Subsidiaries, (ii) the terms of any indenture
or other agreement, obligation, condition, covenant or instrument known to me to
which the Company or the Subsidiaries are a party or bound or to which its or
their property is subject or (iii) any statute, law, rule, regulation, judgment,
order or decree known to me to be applicable to the Company or the Subsidiaries
of any court, regulatory body, administrative agency, governmental body,
arbitratory or other authority having jurisdiction over the Company or the
Subsidiaries or any of its or their properties, except, in the case of each of
(ii) and (iii) above, for any such conflict, breach, violation or imposition
that would have a Material Adverse Effect.
C-1
5. Except as set forth in the Prospectus, no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator, including, without limitation, the United States Food and Drug
Administration (the "FDA") and United States Drug Enforcement Agency (the
"DEA"), involving the Company or any of the Subsidiaries or its or their
respective properties is pending or, to the best of my knowledge, threatened
that (i) could have a material adverse effect on the performance of the
Underwriting Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could have a Material Adverse Effect.
6. Except as set forth in the Prospectus, (A) the Company and
the Subsidiaries possess all permits, licenses, provider numbers, certificates,
approvals, consents, orders, certifications and other authorizations
(collectively, "Governmental Licenses") issued by, and have made all
declarations and filings with, the appropriate Federal, state, local or foreign
regulatory agencies or bodies, including without limitation, the FDA and the
DEA, necessary to conduct the business now operated by the Company and the
Subsidiaries except where the failure to possess such Governmental Licenses or
to make such declarations and filings would not result in a Material Adverse
Effect; the Company and the Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so to
comply would not, individually and in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a Material
Adverse Effect; and (B) neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
7. There is no franchise, contract or other document of a
character required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required.
C-2
I have participated in conferences with officers and other
representatives of the Company, representatives of the independent accountants
for the Company and you and your counsel at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although I am not passing upon, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check or
verification thereof (other than to the limited extent specified in paragraph 2
above) on the basis of the foregoing, no facts have come to my attention that
have led me to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date and as
of the date hereof, contained or contains an untrue statement of a material fact
or omitted or omits to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that we express no belief with respect to the financial
statements, financial statement schedules and other financial data included
therein or excluded therefrom or the exhibits to the Registration Statement.
C-3
EXHIBIT D
FORM OF OPINION OF COMPANY'S REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(c)(i)
(i) the statements included or incorporated by reference in
the Prospectus set forth under the captions "Risk Factors - The pharmaceutical
industry is heavily regulated, which creates uncertainty about our ability to
bring new products to market and imposes substantial compliance costs on our
business", Risk Factors - If the efforts of manufacturers of branded
pharmaceuticals to use litigation and legislative and regulatory efforts to
limit the use of generics and certain other products are successful, our sales
may suffer", "Business- Government Regulation" (collectively, the Regulatory
Disclosure"), insofar as such statements purport to describe or summarize
applicable provisions of the Federal Food, Drug, and Cosmetic Act ("FDCA") and
the Controlled Substances Act ("CSA") and the regulations promulgated
thereunder, are accurate and complete in all material respects and fairly
present the information set forth therein;
(ii) the Company and the Subsidiaries have obtained such
licenses, permits, approvals, and authorizations required by the United States
Food and Drug Administration ("FDA") and the Drug Enforcement Agency ("DEA")
that are necessary for the conduct of the business of the Company and the
Subsidiaries as it is currently conducted and described in the Prospectus and to
our knowledge such authorizations are in effect;
(iii) we are not aware of any lawsuit or regulatory
proceeding, pending or threatened, brought by or before the FDA or the DEA, in
which the Company or the Subsidiaries is or would be the defendant or
respondent, nor are we aware of any adverse judgment, decree, or order currently
in effect that has been issued by the FDA or the DEA against the Company or the
Subsidiaries.
Although we are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and have made no
independent check or verification thereof (other than to the limited extent
specified in paragraph (i) above) on the basis of the foregoing, no facts have
come to our attention that have led us to believe that the Regulatory Disclosure
in the Registration Statement, at the time the Registration Statement became
effective, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Regulatory Disclosure in the
Prospectus, as of the date of the Prospectus and as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
D-1
EXHIBIT E
FORM OF OPINION OF COMPANY'S
INTELLECTUAL PROPERTY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(c)(ii)
(i) To the best of our knowledge, the Company and the
Subsidiaries own or possess all Intellectual Property currently employed by them
in connection with the business now operated by them except where the failure to
own or possess or otherwise be able to acquire such Intellectual Property could
not, individually or in the aggregate, have a Material Adverse Effect.
(ii) Based upon a review of the third party rights made known
to us and discussions with scientific personnel of the Company, we are not aware
of any valid United States or foreign patent that is or would be infringed by
the activities of the Company or the Subsidiaries in the manufacture, use or
sale of any existing or presently proposed product, the technologies employed by
the Company and the Subsidiaries or the method of their use in any existing or
presently proposed product, each as described in the Prospectus and as such are
related to the foregoing technology and products.
(iii) We have reviewed the Company and the Subsidiary patent
applications which are identified in the Patent Schedule included with this
letter, and in such counsel's opinion the Company and the Subsidiary patent
applications have been properly prepared and filed, and are being diligently
pursued by the Company and the Subsidiaries, as the case may be, and the
inventions described in the Company and the Subsidiary patent applications are
owned by, have been assigned to or are licensed to the Company or the
Subsidiaries.
(iv) To our knowledge except as disclosed in the Prospectus,
no party or individual has any right or claim in any of the inventions, patents
or patent applications listed in the Patent Schedule and to the best of our
knowledge each of the Company's and the Subsidiaries' patent applications
discloses patentable subject matter.
(v) To the best of our knowledge, neither the Company nor the
Subsidiaries are infringing or otherwise violating any Intellectual Property of
others, unless otherwise disclosed in the Prospectus. To the best of our
knowledge, except as disclosed in the Prospectus neither the Company nor the
Subsidiaries have received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property.
(vi) All of the Company's and the Subsidiaries' Intellectual
Property licenses are in full force and effect, no default or threatened default
exists under such licenses and, to our knowledge, no basis exists for the same.
E-1
(vii) We know of no legal or governmental proceedings that are
pending or, to the best of our knowledge, that are threatened, relating to any
Intellectual Property, except (A) as disclosed in the Prospectus or (B) which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could have a Material Adverse Effect.
(viii) We are familiar with the Intellectual Property used by
the Company and the Subsidiaries in their business and the manner of such use
and we have reviewed the Registration Statement and the Prospectus, including
particularly the portions of the Prospectus describing or referring to any
Intellectual Property (collectively, the "Intellectual Property Disclosure"). We
have reviewed, among other things, the statements included or incorporated by
reference in the Prospectus under the captions:
"Risk Factors - Our Ability to protect our proprietary
technology, which is vital to our business, is uncertain"
and
"Business - Patents, Trademarks, Licenses and Proprietary
Property."
Although we are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and have made no
independent check or verification thereof (other than to the limited extent
specified in paragraph (viii) above) on the basis of the foregoing, no facts
have come to our attention that have led us to believe that the Intellectual
Property Disclosure in the Registration Statement, at the time the Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Intellectual Property
Disclosure in the Prospectus, as of the date of the Prospectus and as of the
date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
E-2
EXHIBIT F
FORM OF OPINION OF
SELLING STOCKHOLDERS' COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(d)
(i) This Agreement and the Custody Agreement and Power of
Attorney have been duly authorized (if applicable), executed and delivered by
the Selling Stockholders, the Custody Agreement is valid and binding on the
Selling Stockholders and each Selling Stockholder has full legal right and
authority to sell, transfer and deliver in the manner provided in this Agreement
and the Custody Agreement the Securities being sold by such Selling Stockholder
hereunder.
(ii) Assuming that the Underwriter acquires its interest
in the Securities it has purchased from such Selling Stockholder without notice
of any adverse claim (within the meaning of Section 8-105 of the UCC), the
Underwriter, having purchased such Securities delivered on the Closing Date to
The Depository Trust Company or other securities intermediary by making payment
therefor as provided herein and, having had such Securities credited to the
securities account or accounts of such Underwriter maintained with The
Depository Trust Company or such other securities intermediary will have
acquired a security entitlement (within the meaning of Section 8-102(a)(17) of
the UCC) to such Securities purchased by the Underwriter, and no action based on
an adverse claim (within the meaning of Section 8-105 of the UCC) may be
asserted against the Underwriter with respect to such Securities.
(iii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation by any
Selling Stockholder of the transactions contemplated herein, except such as may
have been obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals (specified in such
opinion) as have been obtained.
(iv) Neither the sale of the Securities being sold by any
Selling Stockholder nor the consummation of any other of the transactions herein
contemplated by any Selling Stockholder or the fulfillment of the terms hereof
by any Selling Stockholder will conflict with, result in a breach or violation
of, or constitute a default under any law or the charter or by-laws or other
organizational documents, in each case if applicable, of the Selling Stockholder
or the terms of any indenture or other agreement or instrument known to such
counsel and to which any Selling Stockholder or any of it subsidiaries (if
applicable) is a party or bound, or any judgment, order or decree known to such
counsel to be applicable to any Selling Stockholder or any of its subsidiaries
(if applicable) of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over any Selling Stockholder
or any of its subsidiaries (if applicable).
F-1
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
State of New York or the Federal laws of the United States or the Delaware
General Corporation Law, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriter, and (B) as
to matters of fact, to the extent they deem proper, on certificates of the
Selling Stockholders and public officials.
F-2