Exhibit 10.2

EXECUTION VERSION

K-V PHARMACEUTICAL COMPANY

REGISTRATION RIGHTS AGREEMENT

February 14, 2011

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TABLE OF CONTENTS

 

         Page   Section 1   Definitions      1    Section 2.   Registrations   
  4    Section 3.   Registration Procedures      8    Section 4.   Registration
Expenses      12    Section 5.   Indemnification and Contribution      12   
Section 6.   Underwritten Registrations; Suspended Distributions      14   
Section 7.   Current Public Information      15    Section 8.   Subsidiary
Public Offering      16    Section 9.   General Provisions      16   

 

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K-V PHARMACEUTICAL COMPANY

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of February 14,
2011, by and among K-V Pharmaceutical Company, a Delaware corporation (the
“Company”), and the investors listed on the “Schedule of Investors” attached
hereto (each an “Investor” and collectively, the “Investors”). Except as
otherwise specified herein, all capitalized terms used in this Agreement are
defined in Section 1.

The Company and the Investors are parties to that certain Securities Purchase
Agreement dated as of the date hereof (the “Purchase Agreement”), pursuant to
which the Investors purchased shares of Common Stock from the Company (the
“Purchased Shares”). In order to induce the Investors to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement. The execution and delivery of this Agreement is a condition
to the consummation of the transactions under the Purchase Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby agree as follows:

Section 1. Definitions Unless otherwise set forth below or elsewhere in this
Agreement, other capitalized terms contained herein have the meanings set forth
in the Purchase Agreement.

“Affiliate” of any Person means any other Person controlled by, controlling or
under common control with such Person; provided that the Company and its
Subsidiaries shall not be deemed to be Affiliates of any holder of Registrable
Securities. As used in this definition, “control” (including, with its
correlative meanings, “controlling,” “controlled by” and “under common control
with”) shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities, by contract or otherwise). With respect to any Person who is an
individual, “Affiliates” shall also include, without limitation, any member of
such individual’s Family Group.

“Allowable Grace Period” has the meaning set forth in Section 2(f).

“Agreement” has the meaning set forth in the recitals.

“Capital Stock” means (i) with respect to any Person that is a corporation, any
and all shares, interests or equivalents in capital stock of such corporation
(whether voting or nonvoting and whether common or preferred) and (ii) with
respect to any Person that is not a corporation, individual or governmental
entity, any and all partnership, membership, limited liability company or other
equity interests of such Person that confer on the holder thereof the right to
receive a share of the profits and losses of, or the distribution of assets of,
the issuing Person, including in each case any and all warrants, rights
(including conversion and exchange rights) and options to purchase any of the
foregoing.

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“Closing” has the meaning set forth in the Purchase Agreement.

“Common Stock” means the Company’s Class A common stock, par value $0.01 per
share.

“Company” has the meaning set forth in the preamble.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor federal law then in force, together with all rules and
regulations promulgated thereunder.

“Event” has the meaning set forth in Section 2(c).

“Event Date” has the meaning set forth in Section 2(c).

“Family Group” means, with respect to a Person who is an individual, (i) such
individual’s spouse and descendants (whether natural or adopted) (collectively,
for purposes of this definition, “relatives”), (ii) such individual’s executor
or personal representative, (iii) any trust, the trustee of which is such
individual or such individual’s executor or personal representative and which at
all times is and remains solely for the benefit of such individual and/or such
individual’s relatives, (iv) any corporation, limited partnership, limited
liability company or other tax flow-through entity the governing instruments of
which provide that such individual or such individual’s executor or personal
representative shall have the exclusive, nontransferable power to direct the
management and policies of such entity and of which the sole owners of stock,
partnership interests, membership interests or any other equity interests are
limited to such individual, such individual’s relatives and/or the trusts
described in clause (iii) above, and (v) any retirement plan for such individual
or such individual’s relatives.

“FINRA” means the Financial Industry Regulatory Authority.

“Grace Period” has the meaning set forth in Section 2(f).

“Indemnified Parties” has the meaning set forth in Section 5(a).

“Investor” and “Investors” have the respective meanings set forth in the
recitals.

“Issuer Free-Writing Prospectus” means an issuer free-writing prospectus as
defined in Rule 433 under the Securities Act.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

“Public Offering” means any sale or distribution by the Company and/or holders
of Registrable Securities to the public of Common Stock of the Company pursuant
to an offering registered under the Securities Act.

 

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“Purchased Shares” has the meaning set forth in the recitals.

“Purchase Agreement” has the meaning set forth in the recitals.

“Registrable Securities” means (i) the Purchased Shares, and (ii) any Capital
Stock of the Company or any Subsidiary of the Company issued or issuable with
respect to the securities referred to in clause (i) above by way of dividend,
distribution, split or combination of securities, or any recapitalization,
merger, consolidation or other reorganization. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when they
have been (a) sold or distributed pursuant to a Public Offering, (b) disposed of
pursuant to Rule 144 or which may be disposed of pursuant to Rule 144 by a
non-affiliate without volume, timing or current public information restrictions,
or (c) repurchased by the Company or a Subsidiary of the Company. For purposes
of this Agreement, a Person shall be deemed to be a holder of Registrable
Securities, and the Registrable Securities shall be deemed to be in existence,
whenever such Person has the right to acquire, directly or indirectly, such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected, and such Person shall be entitled to exercise the
rights of a holder of Registrable Securities hereunder.

“Registration Expenses” has the meaning set forth in Section 4(a).

“Registration Statement” means the registration statement required to be filed
hereunder and any additional registration statements contemplated hereby,
including (in each case) the prospectus, amendments and supplements to such
registration statement or prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

“Rule 144,” “Rule 158,” “Rule 405,” “Rule 415,” and “Rule 462” mean, in each
case, such rule promulgated under the Securities Act (or any successor
provision) by the SEC, as the same shall be amended from time to time, or any
successor rule then in force.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
or any successor federal law then in force, together with all rules and
regulations promulgated thereunder.

“Subsidiary” means, with respect to the Company, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by the Company or one or more of the other
Subsidiaries of the Company or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the limited liability company, partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
the Company or one or more Subsidiaries of the Company or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership

 

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interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing director or general partner
of such limited liability company, partnership, association or other business
entity.

“Violation” has the meaning set forth in Section 5(a).

“WKSI” means a “well-known seasoned issuer” as defined under Rule 405.

Section 2. Registrations Registration Statements (i) Subject to the terms and
conditions of this Agreement, the Company agrees to use its best efforts to
prepare and file with the SEC, as soon as reasonably practicable, but in no
event later than June 15, 2011, a Registration Statement covering the resale of
all or such portion of the Registrable Securities that are not then registered
on an effective Registration Statement for an offering to be made on a
continuous basis, which Registration Statement shall, subject to any SEC
comments, include the plan of distribution attached hereto as Exhibit A;
provided, however, that no Investor shall be named as an “underwriter” in the
Registration Statement without the Investor’s prior written consent. Subject to
the terms of this Agreement, the Company shall use its best efforts to cause
such Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to
July 15, 2011 (or within 16 days thereafter, to the extent such extension is
required a result of the SEC processing responses to SEC comments made regarding
the filed Registration Statement), and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act during
the period (the “Effectiveness Period”) ending on the earlier of (i) the date on
which all Registrable Securities included in such registration have been sold or
distributed pursuant to the Registration Statement, or (ii) the date as of which
no Registrable Securities are outstanding.

(ii) If at any time the SEC takes the position that the offering of some or all
of the Registrable Securities in a Registration Statement is not eligible to be
made on a delayed or continuous basis under the provisions of Rule 415 under the
Securities Act or requires any Investor to be named as an “underwriter”, the
Company shall use its best efforts to persuade the SEC that the offering
contemplated by the Registration Statement is a valid secondary offering and not
an offering “by or on behalf of the issuer” as defined in Rule 415 and that none
of the Investors is an “underwriter”. The Investors shall have the right to
participate or have their counsel participate in any meetings or discussions
with the SEC regarding the SEC’s position and to comment or have their counsel
comment on any written submission made to the SEC with respect thereto. No such
written submission shall be made to the SEC to which the Investors’ counsel
reasonably objects. In the event that, despite the Company’s best efforts and
compliance with the terms of this Section 2(a)(ii), the SEC refuses to alter its
position, the Company shall (i) remove from the Registration Statement such
portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree
to such restrictions and limitations on the registration and resale of the
Registrable Securities as the SEC may require to assure the Company’s compliance
with the requirements of Rule 415 (collectively, the “SEC Restrictions”);
provided, however, that the Company shall not agree to name any Investor as an
“underwriter” in such Registration Statement without the prior written consent
of such Investor. Any cut-back imposed on the Investors pursuant to this
Section 2(a)(ii) shall be allocated among the Investors on a pro rata

 

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basis, unless the SEC Restrictions otherwise require or provide or the Investors
otherwise agree. No liquidated damages under Section 2(c) shall accrue as to any
Cut Back Shares until such date as the Company is able to effect the
registration of such Cut Back Shares in accordance with any SEC Restrictions
(such date, the “Restriction Termination Date” of such Cut Back Shares). From
and after the Restriction Termination Date applicable to any Cut Back Shares,
all of the provisions of this Section 2 (including the liquidated damages
provisions) shall again be applicable to such Cut Back Shares; provided,
however, that (i) the filing deadline for the Registration Statement including
such Cut Back Shares shall be the later of June 15, 2011 and ten (10) Business
Days after such Restriction Termination Date, and (ii) the date by which the
Company is required to obtain effectiveness with respect to such Cut Back Shares
under Section 2(c) shall be the later of July 15, 2011 (or within 16 days
thereafter, to the extent such extension is required a result of the SEC
processing responses to SEC comments made regarding the filed Registration
Statement) and the 90th day immediately after the Restriction Termination Date.

(b) Priority on Registration The Company shall not include in any Registration
Statement any securities which are not Registrable Securities without the prior
written consent of holders of a majority of the Registrable Securities that are
included in such Registration Statement. If a Registration Statement is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold therein without adversely affecting the marketability, proposed
offering price, timing or method of distribution of the offering, the Company
shall include in such registration prior to the inclusion of any securities
which are not Registrable Securities the number of Registrable Securities
requested to be included which, in the opinion of such underwriters, can be
sold, without any such adverse effect, pro rata among the respective holders
thereof on the basis of the amount of Registrable Securities owned by each such
holder.

(c) Liquidated Damages If: (i) the Registration Statement is not filed on or
prior to June 15, 2011, (ii) the Company fails to have the Registration
Statement declared effective under the Securities Act prior to July 15, 2011 (or
within 16 days thereafter, to the extent such extension is required as a result
of the SEC processing responses to SEC comments made regarding the filed
Registration Statement), or (iii) after a Registration Statement is declared
effective, such Registration Statement ceases for any reason to remain
continuously effective as to all Registrable Securities included in such
Registration Statement, or the holders of such Registrable Securities are
otherwise not permitted to utilize the prospectus therein to resell such
Registrable Securities (other than during an Allowable Grace Period (as defined
below)), or (iv) a Grace Period (as defined below) exceeds the Allowable Grace
Period (any such failure or breach being referred to as an “Event,” and for
purposes of clause (i) and (ii), the date on which such Event occurs, or for
purposes of clause (iii) the date on which such Registration Statement ceases to
be effective, or the holders of such Registrable Securities are otherwise not
permitted to utilize the prospectus therein to resell such Registrable
Securities (other than during an Allowable Grace Period), or for purposes of
clause (iv) the date on which the Allowable Grace Period is exceeded, being
referred to as “Event Date”), then, in addition to any other rights the holders
of such Registrable Securities may have hereunder or under applicable law, on
each such Event Date and on each monthly anniversary of each such Event Date
(for the avoidance of doubt, if an Event is cured prior to a monthly anniversary
of an Event Date, the Company shall

 

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be responsible for paying to the holders of Registrable Securities their pro
rata portion of the liquidated damages for that portion of the monthly
anniversary period during which such Event is not cured) until the applicable
Event is cured, the Company shall pay to each holder of Registrable Securities
an amount in cash, as partial liquidated damages and not as a penalty, equal to
1.5% of the aggregate purchase price paid by such holder pursuant to the
Purchase Agreement for the number of shares of unregistered Registrable
Securities then held by such holder. Notwithstanding the foregoing, (A) no
liquidated damages shall accrue after the date as of which all of the
Registrable Securities included in such registration are able to be sold by
non-affiliates of the Company pursuant to Rule 144(b)(1) without compliance with
the current public information requirements of such rule, and (B) no liquidated
damages shall accrue during any period during which the Company has advised the
holders of Registrable Securities to suspend the use of any prospectus, provided
such period does not exceed the Allowable Grace Period. If the Company fails to
pay any partial liquidated damages pursuant to this Section in full within seven
calendar days after the date payable, the Company will pay interest thereon at a
rate of 12% per annum (or such lesser maximum amount that is permitted to be
paid by applicable law) to the holders, accruing daily from the date such
partial liquidated damages are due until such amounts, plus all such interest
thereon, are paid in full. The partial liquidated damages pursuant to the terms
hereof shall apply on a daily pro rata basis for any portion of a month prior to
the cure of an Event. Notwithstanding the foregoing, an “Event” shall not
include a Registration Statement not remaining effective if the Company has
advised the holders of Registrable Securities to suspend the use of any
prospectus pursuant to Section 2(f), provided such period does not exceed the
Allowable Grace Period. In addition, an “Event” with respect to any one
Purchaser shall not include an Event that occurs as a result of a Registration
Statement not being filed, not being declared effective, or not remaining
effective as a result of such Purchaser failing to timely provide the Company
with information requested by the Company and necessary to complete the
Registration Statement in accordance with the requirements of the Securities
Act, and then the liquidated damages shall not be accrued or payable to such
Purchaser who has not provided such information.

(d) Selling Shareholder Questionnaires Each Investor agrees to furnish to the
Company a completed Selling Shareholder Questionnaire not more than fifteen
Business Days following the date of this Agreement. At least ten Business Days
prior to the first anticipated filing date of a Registration Statement for any
registration under this Agreement, the Company will notify each holder of
Registrable Securities of the information the Company requires from that holder
other than the information contained in the Selling Shareholder Questionnaire,
if any, which shall be completed and delivered to the Company promptly upon
request and, in any event, within three Business Days prior to the applicable
anticipated filing date. Each Investor further agrees that it shall not be
entitled to be named as a selling securityholder in the Registration Statement
or use any prospectus for offers and resales of Registrable Securities at any
time, unless such Investor has returned to the Company a completed and signed
Selling Shareholder Questionnaire and a response to any requests for further
information as described in the previous sentence. If a holder of Registrable
Securities returns a Selling Shareholder Questionnaire or a request for further
information, in either case, after its respective deadline, the Company shall
use its commercially reasonable efforts at the expense of the holder who failed
to return the Selling Shareholder Questionnaire or to respond for further
information to take such actions as are required to name such holder as a
selling security holder in the Registration Statement or any pre-effective or
post-effective amendment thereto and to include (to the extent

 

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not theretofore included) in the Registration Statement the Registrable
Securities identified in such late Selling Shareholder Questionnaire or request
for further information. Each Investor acknowledges and agrees that the
information in the Selling Shareholder Questionnaire or request for further
information as described in this Section 2(d) will be used by the Company in the
preparation of the Registration Statement and hereby consents to the inclusion
of such information in the Registration Statement. The Company agrees not to
name any holder of Registrable Securities as an underwriter in the Registration
Statement without such holder’s prior written consent.

(e) Selection of Underwriters The holders of a majority of the Registrable
Securities included in an underwritten offering shall have the right to select
the investment banker(s) and manager(s) to administer the offering and the
Company shall pay all reasonable expenses in connection therewith.

(f) Grace Periods Notwithstanding anything to the contrary herein, at any time
after any Registration Statement has been declared effective by the SEC, the
Company may delay the disclosure of material non-public information concerning
the Company if the disclosure of such information at the time is not, in the
good faith judgment of the Company, in the best interests of the Company (a
“Grace Period”); provided, however, the Company shall promptly (i) notify the
holders of Registrable Securities in writing (including via facsimile or other
electronic transmission) of the existence of material non-public information
giving rise to a Grace Period (provided that the Company shall not disclose the
content of such material non-public information to the holders) or the need to
file a supplement or post-effective amendment, as applicable, and the date on
which such Grace Period will begin, and (ii) notify the holders of Registrable
Securities in writing (including via facsimile or other electronic transmission)
of the date on which the Grace Period ends; provided, further, that no single
Grace Period shall exceed thirty (30) consecutive days, and during any three
hundred sixty-five (365) day period, the aggregate of all Grace Periods shall
not exceed an aggregate of sixty (60) days (each Grace Period complying with
this provision being an “Allowable Grace Period”). For purposes of determining
the length of a Grace Period, the Grace Period shall be deemed to begin on and
include the date the holders receive the notice referred to in clause (i) above
and shall end on and include the later of the date the holders receive the
notice referred to in clause (ii) above and the date referred to in such notice;
provided, however, that no Grace Period shall be longer than an Allowable Grace
Period.

(g) Other Registration Rights.

(i) The parties to this Agreement acknowledge that the Company is party to (A) a
Registration Rights Agreement dated as of November 17, 2010 and (B) an Amended
and Restated Registration Rights Agreement dated as of February 10, 2011, and
(C) a Second Amended and Restated Registration Rights Agreement dated on or
about February 14, 2011 (collectively, the “USH Registration Rights
Agreements”), by and among the Company, U.S. Healthcare I, L.L.C. and U.S.
Healthcare II, L.L.C. (U.S. Healthcare I, L.L.C. and U.S. Healthcare II, L.L.C.
are collectively referred to herein as the “USH Investor”). Pursuant to the USH
Registration Rights Agreements, the Company has agreed, among other things, (A)
to

 

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register under the Securities Act certain shares of the Class A Common Stock of
the Company that may be issued to the USH Investor pursuant to warrants issued
to the USH Investor (the “USH Securities”), and (B) that the Company will not
grant to any Persons the right to request the Company or any Subsidiary to
register any Class A Common Stock or Class B Common Stock of the Company, or any
securities convertible or exchangeable into or exercisable for such securities.
The Company has received a waiver from USH Investor from the foregoing with
respect to this Agreement. The parties acknowledge and agree that the Company
shall be entitled to register the USH Securities pursuant to a registration
statement filed under the Securities Act and take such other actions necessary
to fulfill its obligations under the USH Registration Rights Agreement.

(ii) The parties to this Agreement acknowledge that the Company is party to a
Settlement Agreement, dated as of November 15, 2010 (the “Settlement
Agreement”), by among the Company, The Office of Inspector General of the United
States Department of Health and Human Services, Marc Hermelin and his wife,
Sarah Weltscheff. Pursuant to the Settlement Agreement, the Company has agreed,
among other things, to register under the Securities Act certain shares of the
Class A Common Stock and Class B Common Stock of the Company beneficially owned
by Mr. Hermelin and Ms. Weltscheff. The parties acknowledge and agree that the
Company shall be entitled to register such shares pursuant to a registration
statement filed under the Securities Act and take such other actions necessary
to fulfill its obligations under the Settlement Agreement.

Section 3. Registration Procedures

(a) The Company shall effect the registration and the sale of Registrable
Securities in accordance with the intended method of disposition by the holders
thereof, and pursuant thereto the Company shall as promptly as reasonably
practicable:

(i) in accordance with the Securities Act and all applicable rules and
regulations promulgated thereunder, prepare and file with the SEC a registration
statement, and all amendments and supplements thereto and related prospectuses,
with respect to such Registrable Securities and use best efforts to cause such
registration statement to become effective (provided that before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to the counsel selected by the holders of the
Registrable Securities covered by such registration statement copies of all such
documents proposed to be filed);

(ii) notify each holder of Registrable Securities of (A) the issuance by the SEC
of any stop order suspending the effectiveness of any registration statement or
the initiation of any proceedings for that purpose, (B) the receipt by the
Company or its counsel of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, and (C) the
effectiveness of each registration statement filed hereunder;

(iii) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be

 

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necessary to keep such registration statement effective during the Effectiveness
Period and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;

(iv) provide copies to and permit counsel designated by the Investors to review
each Registration Statement and all amendments and supplements thereto as far in
advance as reasonably practicable prior to their filing with the SEC and not
file any document to which such counsel reasonably objects;

(v) furnish to each seller of Registrable Securities thereunder such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus), each Issuer Free-Writing Prospectus and such other
documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;

(vi) register or qualify such Registrable Securities under such other securities
or blue sky laws of such jurisdictions as any seller reasonably requests and do
any and all other acts and things which may be reasonably necessary or advisable
to enable such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller, except that the Company shall not
for any such purpose be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified, (ii) subject itself to taxation
in any such jurisdiction where it is not then so subject;

(vii) notify each seller of such Registrable Securities (A) promptly after it
receives notice thereof, of the date and time when such registration statement
and each post-effective amendment thereto has become effective or a prospectus
or supplement to any prospectus relating to a registration statement has been
filed and when any registration or qualification has become effective under a
state securities or blue sky law or any exemption thereunder has been obtained,
(B) promptly after receipt thereof, of any request by the SEC for the amendment
or supplementing of such registration statement or prospectus or for additional
information, and (C) at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement contains
an untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of any such seller, the
Company shall prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;

(viii) use best efforts to cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on a securities exchange and, if
not then listed on NYSE, to use its best efforts to arrange for at least two
market markers to register as such with respect to such Registrable Securities
with FINRA;

 

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(ix) provide a transfer agent and registrar for all such Registrable Securities
not later than the effective date of such registration statement;

(x) enter into and perform such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
the Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split, combination
of shares, recapitalization or reorganization);

(xi) subject to execution of customary confidentiality arrangements, make
available for inspection by any seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate and
business documents and properties of the Company as shall be necessary to enable
them to exercise their due diligence responsibility, and cause the Company’s
officers, directors, employees, agents, representatives and independent
accountants to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement;

(xii) take all reasonable actions to ensure that any Issuer Free-Writing
Prospectus utilized in connection with any Registration Statement hereunder
complies in all material respects with the Securities Act, is filed in
accordance with the Securities Act to the extent required thereby, is retained
in accordance with the Securities Act to the extent required thereby and, when
taken together with the related prospectus, shall not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading;

(xiii) otherwise comply with all applicable rules and regulations of the SEC,
and make available to its security holders, as soon as reasonably practicable,
an earning statement covering the period of at least twelve months beginning
with the first day of the Company’s first full calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158.

(xiv) permit any holder of Registrable Securities which holder, in its sole and
exclusive judgment, might be deemed to be an underwriter or a controlling person
of the Company, to participate in the preparation of such registration or
comparable statement and to allow such holder to provide language for insertion
therein, in form and substance satisfactory to the Company, which in the
judgment of such holder and its counsel should be included;

 

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(xv) in the event of the issuance of any stop order suspending the effectiveness
of a registration statement, or the issuance of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, use best efforts to promptly to obtain the withdrawal of such
order;

(xvi) cause such Registrable Securities covered by such registration statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the sellers thereof to consummate the
disposition of such Registrable Securities;

(xvii) cooperate with the holders of Registrable Securities covered by the
registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement and enable such securities to be in such denominations and registered
in such names as the managing underwriter, or agent, if any, or such holders may
request;

(xviii) cooperate with each holder of Registrable Securities covered by the
registration statement and each underwriter or agent participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with FINRA;

(xix) in connection with any underwritten offering, make available the executive
officers of the Company to participate with the holders of Registrable
Securities and any underwriters in any “road shows” or other selling efforts
that may be reasonably requested by the holders in connection with the methods
of distribution for the Registrable Securities;

(xx) in connection with any underwritten offering, use best efforts to obtain
one or more cold comfort letters from the Company’s independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters; and

(xxi) in connection with any underwritten offering, use best efforts to provide
a legal opinion of the Company’s outside counsel, dated the effective date of
such registration statement.

(b) The Company shall not undertake any voluntary act intended to cause a
Violation or result in the declaration of a Grace Period. During any Grace
Period, and as may be extended hereunder, the Company shall correct or update
any disclosure causing the Company to provide notice of the Grace Period and to
file and cause to become effective or terminate the suspension of use or
effectiveness, as the case may be, the subject registration statement. In the
event that the Company shall exercise its right to delay or suspend the filing
or effectiveness of a registration hereunder, the applicable time period during
which the registration statement is to remain effective shall be extended by a
period of time equal to the duration of the Grace Period. The Company may extend
the Grace Period for an additional consecutive 60 days with the

 

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consent of the holders of a majority of the Registrable Securities registered
under the applicable registration statement, which consent shall not be
unreasonably withheld. If so directed by the Company, all holders of Registrable
Securities registering shares under such registration statement shall (i) not
offer to sell any Registrable Securities pursuant to the registration statement
during the period in which the delay or suspension is in effect after receiving
notice of such delay or suspension and (ii) deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such
holders’ possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.

Section 4. Registration Expenses

(a) The Company’s Obligation All expenses incident to the Company’s performance
of or compliance with this Agreement (including, without limitation, all
registration, qualification and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, fees and disbursements of custodians, and fees and disbursements of
counsel for the Company, reasonable fees and expenses billed at the standard
hourly rates of one counsel to the Investors and the Investors’ reasonable
expenses in connection with the registration, and all independent certified
public accountants, underwriters and other Persons retained by the Company) (all
such expenses being herein called “Registration Expenses”), shall be borne by
the Company.

(b) Counsel Fees and Disbursements In connection with each Registration
Statement, the Company shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by a majority of the holders of the Registrable Securities
requesting such registration for the purpose of rendering a legal opinion on
behalf of such holder in connection with any underwritten Registration
Statement.

Section 5. Indemnification and Contribution

(a) By the Company The Company shall indemnify and hold harmless, to the extent
permitted by law, each holder of Registrable Securities, such holder’s officers,
directors employees, agents and representatives, and each Person who controls
such holder (within the meaning of the Securities Act) (the “Indemnified
Parties”) against all losses, claims, actions, damages, liabilities and expenses
(including with respect to actions or proceedings, whether commenced or
threatened, and including reasonable attorney fees and expenses) caused by,
resulting from, arising out of, based upon or related to any of the following
statements, omissions or violations (each a “Violation”) by the Company: (i) any
untrue or alleged untrue statement of material fact contained in (A) any
registration statement pursuant to which Registrable Securities are registered,
any prospectus, preliminary prospectus or Issuer Free-Writing Prospectus
included in any such registration statement, or any amendment thereof or
supplement thereto or (B) any application or other document or communication (in
this Section 5, collectively called an “application”) executed by or on behalf
of the Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify any Registrable
Securities covered by such registration under the securities laws thereof,
(ii) any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
violation or alleged violation by the Company

 

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of the Securities Act or any other similar federal or state securities laws or
any rule or regulation promulgated thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration, qualification or compliance; provided that the Company will
not be liable for losses arising out of written information provided by a holder
for inclusion in the registration statement or sales of Registrable Securities
made during a Grace Period after notice has been given by the Company. In
addition, the Company will reimburse such Indemnified Party for any reasonable
legal or any other expenses incurred by them in connection with investigating or
defending any such losses.

(b) By Each Security Holder. In connection with any registration statement in
which a holder of Registrable Securities is participating, each such holder
shall furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, shall indemnify the
Company, its officers, directors, employees, agents and representatives, and
each Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus, preliminary prospectus or Issuer
Free-Writing Prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder specifically for inclusion in
such registration statement or prospectus or amendment or supplement thereto;
provided that the obligation to indemnify shall be individual, not joint and
several, for each holder (with no holder being responsible for any misstatements
or omissions of any other holder) and shall be limited to the amount of proceeds
(net of all expense paid by such holder in connection with any claim relating to
this Section 5 and the amount of any damages such holder has otherwise been
required to pay by reason of such untrue statement or omission) received by such
holder from the sale of securities pursuant to such registration statement
giving rise to such indemnification obligation.

(c) Claim Procedure. Any Person entitled to indemnification hereunder shall
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
prompt notice shall impair any Person’s right to indemnification hereunder only
to the extent such failure has prejudiced the indemnifying party) and
(ii) unless in such indemnified party’s judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld, conditioned or delayed). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim. In such instance, the conflicted indemnified parties shall have a right
to retain one separate counsel, chosen by the holders of the Registrable
Securities included in the registration if such holders are indemnified parties,
at the expense of the indemnifying party.

 

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(d) Contribution. If the indemnification provided for in this Section 5 is held
by a court of competent jurisdiction to be unavailable to, or is insufficient to
hold harmless, an indemnified party or is otherwise unenforceable with respect
to any loss, claim, damage, liability or action referred to herein, then the
indemnifying party shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or action
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
claim, damage, liability or action as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just or
equitable if the contribution pursuant to this Section 5(d) were to be
determined by pro rata allocation or by any other method of allocation that does
not take into account such equitable considerations. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or expenses referred to herein shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject
hereof. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who is not guilty of such fraudulent misrepresentation. Notwithstanding
anything to the contrary, in no event shall the contribution obligation of a
holder of Registrable Securities be greater in amount than the dollar amount of
the proceeds (net of all expenses paid by such holder in connection with any
claim relating to this Section 5 and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

(e) Release. No indemnifying party shall, except with the consent of the
indemnified party, consent to the entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.

(f) Non-exclusive Remedy; Survival. The indemnification and contribution
provided for under this Agreement shall be in addition to any other rights to
indemnification or contribution that any indemnified party may have pursuant to
law or contract and shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and shall survive the
transfer of Registrable Securities and the termination or expiration of this
Agreement.

Section 6. Underwritten Registrations; Suspended Distributions.

(a) Participation. No Person may participate in any registration hereunder which
is underwritten unless such Person (i) agrees to sell such Person’s securities
on the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements (including, without
limitation, pursuant to any over-allotment or

 

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“green shoe” option requested by the underwriters; provided that no holder of
Registrable Securities shall be required to sell more than the number of
Registrable Securities such holder has requested to include) and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements; provided that no holder of Registrable Securities included in any
underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters (other than representations and
warranties regarding such holder and such holder’s intended method of
distribution) or to undertake any indemnification obligations to the Company or
the underwriters with respect thereto that are materially more burdensome than
those provided in Section 5.

(b) Suspended Distributions. Each Person that is participating in any
registration under this Agreement, upon receipt of any notice from the Company
of the happening of any event giving rise to a Grace Period, shall immediately
discontinue the disposition of its Registrable Securities pursuant to the
registration statement until such Person’s receipt of the copies of a
supplemented or amended prospectus as contemplated by Section 3(a)(vii). In the
event the Company has given any such notice, the applicable time period set
forth in Section 3(a)(ii) during which a Registration Statement is to remain
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to this Section 6(b) to
and including the date when each seller of Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 3(a)(vii).

Section 7. Current Public Information. At all times after the Company has filed
a registration statement with the SEC pursuant to the requirements of either the
Securities Act or the Exchange Act, the Company shall file all reports required
to be filed by it under the Securities Act and the Exchange Act and shall take
such further action as any holder or holders of Registrable Securities may
reasonably request, all to the extent required to enable such holders to sell
Registrable Securities pursuant to Rule 144. Upon request, the Company shall
deliver to any holder of Restricted Securities a written statement as to whether
it has complied with such requirements.

Section 8. Due Diligence Review; Information. Subject to the following paragraph
of this section, the Company shall make available, during normal business hours,
for inspection and review by the Investors, advisors to and representatives of
the Investors (who may or may not be affiliated with the Investors and who are
reasonably acceptable to the Company), all financial and other records, all 1934
Act Filings and other filings with the SEC, and all other corporate documents
and properties of the Company as may be reasonably necessary for the purpose of
such review, and cause the Company’s officers, directors and employees, within a
reasonable time period, to supply all such information reasonably requested by
the Investors or any such representative, advisor or underwriter in connection
with such Registration Statement (including, without limitation, in response to
all questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling the Investors and such
representatives, advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.

 

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Anything in the foregoing notwithstanding, the Company shall not disclose
material nonpublic information to the Investors, or to advisors to or
representatives of the Investors, unless prior to disclosure of such information
the Company identifies such information as being material nonpublic information
and provides the Investors, such advisors and representatives with the
opportunity to accept or refuse to accept such material nonpublic information
for review and any Investor wishing to obtain such information enters into an
appropriate confidentiality agreement with the Company with respect thereto.

Section 9. Subsidiary Public Offering If, after an initial Public Offering of
the Capital Stock of one of its Subsidiaries, the Company distributes securities
of such Subsidiary to its equity holders, then the rights and obligations of the
Company pursuant to this Agreement shall apply, mutatis mutandis, to securities
of such Subsidiary, and the Company shall cause such Subsidiary to comply with
such Subsidiary’s obligations under this Agreement.

Section 10. Lock-up. For a period of 45 days after the date of the effectiveness
of the Registration Statement the Company will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly any additional
shares of its securities or securities convertible into or exchangeable or
exercisable for any shares of its securities, excluding (i) options granted to
employees, directors or consultants under the Company’s stock option plans,
(ii) the conversion or exercise of convertible or exercisable securities
outstanding on the date hereof, (iii) the issuance of shares in connection with
debt financing or similar transactions that are primarily of a non-equity
financing nature and approved by the Company’s Board of Directors,
(iv) securities issued pursuant to acquisitions or strategic transactions
approved by the Company’s Board of Directors, and (v) securities issued in
exchange for outstanding debt.

Section 11. General Provisions

(a) Amendments and Waivers Except as otherwise provided herein, the provisions
of this Agreement may be amended, modified or waived only with the prior written
consent of the Company and a majority of the holders of the Registrable
Securities. The failure or delay of any Person to enforce any of the provisions
of this Agreement shall in no way be construed as a waiver of such provisions
and shall not affect the right of such Person thereafter to enforce each and
every provision of this Agreement in accordance with its terms. A waiver or
consent to or of any breach or default by any Person in the performance by that
Person of his, her or its obligations under this Agreement shall not be deemed
to be a consent or waiver to or of any other breach or default in the
performance by that Person of the same or any other obligations of that Person
under this Agreement.

(b) Remedies The parties to this Agreement shall be entitled to enforce their
rights under this Agreement specifically (without posting a bond or other
security), to recover damages caused by reason of any breach of any provision of
this Agreement and to exercise all other rights existing in their favor. The
parties hereto agree and acknowledge that a breach of this Agreement would cause
irreparable harm and money damages would not be an adequate remedy for any such
breach and that, in addition to any other rights and remedies existing
hereunder, any party shall be entitled to specific performance and/or other
injunctive relief from any court of law or equity of competent jurisdiction
(without posting any bond or other security) in order to enforce or prevent
violation of the provisions of this Agreement.

 

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(c) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited, invalid,
illegal or unenforceable in any respect under any applicable law or regulation
in any jurisdiction, such prohibition, invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other provision of this Agreement in such jurisdiction or in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such prohibited, invalid, illegal or unenforceable
provision had never been contained herein.

(d) Entire Agreement. Except as otherwise provided herein, this Agreement
contains the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties hereto,
written or oral, which may have related to the subject matter hereof in any way,
except as may be contained in the Purchase Agreement.

(e) Successors and Assigns. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit and be enforceable by the Company and its
successors and assigns and the holders of Registrable Securities and their
respective successors and assigns (whether so expressed or not). In addition,
whether or not any express assignment has been made, the provisions of this
Agreement which are for the benefit of purchasers or holders of Registrable
Securities are also for the benefit of, and enforceable by, any subsequent
holder of Registrable Securities.

(f) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be delivered personally, mailed by certified or registered
mail, return receipt requested and postage prepaid, or sent by reputable
overnight courier service (charges prepaid), to the recipient. Such notices,
demands and other communications will be sent to the Company or the Investors
specified below:

The Company:

K-V Pharmaceutical Company

One Corporate Woods Drive

Bridgeton, MO 63044

Attn:   CEO and President

Fax:    314-646-3785

With a copy to:

Thompson Coburn LLP

One US Bank Plaza

St. Louis, MO 63101

Attention:  Thomas A. Litz

Facsimile:  314-552-7000

 

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Investors:

if to an Investor, to its address and facsimile number set forth on the Schedule
of Investors, with copies to such Investor’s representatives as set forth on the
Schedule of Investors;

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party. All
such notices, demands or other communications will be deemed to have been given
when actually received or refused by the recipient or when returned to the
sender as undeliverable.

(g) Business Days. If any time period for giving notice or taking action
hereunder expires on a day that is not a Business Day, the time period shall
automatically be extended to the Business Day immediately following such
Saturday, Sunday or legal holiday.

(h) Governing Law. The corporation laws of the State of Delaware shall govern
all issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal law of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.

(i) MUTUAL WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR
EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE
OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN
ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

(j) CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH OF THE PARTIES
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY
SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES
HERETO FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT
BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH ABOVE SHALL
BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT
TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS PARAGRAPH. EACH
OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO
THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS
AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND
HEREBY AND THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

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(k) No Recourse. Notwithstanding anything to the contrary in this Agreement, the
Company and each holder of Registrable Securities agrees and acknowledges that
no recourse under this Agreement or any documents or instruments delivered in
connection with this Agreement, shall be had against any current or future
director, officer, employee, general or limited partner or member of any holder
of Registrable Securities or of any Affiliate or assignee thereof, whether by
the enforcement of any assessment or by any legal or equitable proceeding, or by
virtue of any statute, regulation or other applicable law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any current or future officer, agent
or employee of any holder of Registrable Securities or any current or future
member of any holder of Registrable Securities or any current or future
director, officer, employee, partner or member of any holder of Registrable
Securities or of any Affiliate or assignee thereof, as such for any obligation
of any holder of Registrable Securities under this Agreement or any documents or
instruments delivered in connection with this Agreement for any claim based on,
in respect of or by reason of such obligations or their creation.

(l) Descriptive Headings; Interpretation. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement. The use of the word “including” in this Agreement shall be by way of
example rather than by limitation.

(m) No Strict Construction. The language used in this Agreement shall be deemed
to be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against any party.

(n) Counterparts. This Agreement may be executed in multiple counterparts, any
one of which need not contain the signature of more than one party, but all such
counterparts taken together shall constitute one and the same agreement.

(o) Electronic Delivery. This Agreement, the agreements referred to herein, and
each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent executed and delivered by means of a photographic,
photostatic, facsimile or similar reproduction of such signed writing using a
facsimile machine or electronic mail shall be treated in all manner and respects
as an original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person. At the request of any party hereto or to any such agreement or
instrument, each other party hereto or thereto shall re-execute original forms
thereof and deliver them to all other parties. No party hereto or to any such
agreement or instrument shall raise the use of a facsimile machine or electronic
mail to deliver a signature or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of a facsimile
machine or electronic mail as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.

 

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(p) Further Assurances. In connection with this Agreement and the transactions
contemplated hereby, each holder of Registrable Securities shall execute and
deliver any additional documents and instruments and perform any additional acts
that may be necessary or appropriate to effectuate and perform the provisions of
this Agreement and the transactions contemplated hereby.

(q) No Inconsistent Agreements. The Company shall not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the holders of Registrable Securities in this Agreement.

*    *    *    *    *

 

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

  COMPANY:   K-V PHARMACEUTICAL COMPANY   By:  

/s/ Gregory J. Divis, Jr.

    Name: Gregory J. Divis, Jr.     Title: President and Chief Executive Officer

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

INVESTORS: CADUCEUS CAPITAL MASTER FUND LIMITED By:  

/s/ Sven Borha

  Name: Sven Borha   Title: Partner CADUCEUS CAPITAL II, L.P. By:  

/s/ Sven Borha

  Name: Sven Borha   Title: Partner UBS EUCALYPTUS FUND, L.L.C. By:  

/s/ Sven Borha

  Name: Sven Borha   Title: Partner PW EUCALYPTUS FUND, LTD By:  

/s/ Sven Borha

  Name: Sven Borha   Title: Partner SUMMER STREET LIFE SCIENCES HEDGE FUND
INVESTORS, LLC By:  

/s/ Sven Borha

  Name: Sven Borha   Title: Partner

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

INVESTORS: Visium Credit Master Fund, Ltd By:  

/s/ Mark Gottlieb

  Name: Mark Gottlieb   Title: Signatory Visium Balanced Master Fund, Ltd By:  

/s/ Mark Gottlieb

  Name: Mark Gottlieb   Title: Signatory

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

INVESTORS: CAPITAL VENTURES INTERNATIONAL By:   Heijub Capital Management, Inc.,
its authorized agent By:  

/s/ Martin Kobinger

  Name: Martin Kobinger   Title: Investment Manager

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

INVESTORS: Hudson Bay Master Fund LTD By:  

/s/ Yoav Roth

  Name: Yoav Roth   Title: Authorized Signatory

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

INVESTORS:

 

PFM Healthcare Fund, LP

By:  

/s/ Eric Moore

  Name: Eric Moore   Title: CFO PFM Healthcare Principals Fund, LP By:  

/s/ Eric Moore

  Name: Eric Moore   Title: CFO PFM Healthcare Offshore Fund, Ltd By:  

/s/ Eric Moore

  Name: Eric Moore   Title: CFO

--------------------------------------------------------------------------------

SCHEDULE OF INVESTORS

 

Investor

   Number of
Common Shares      Purchase
Price     

Address and Phone

Number

CADUCEUS CAPITAL MASTER FUND LIMITED      435,000         1,413,750      

767 Third Avenue

New York, NY 10017

212-739-6400

CADUCEUS CAPITAL II, L.P.      330,000         1,072,500      

767 Third Avenue

New York, NY 10017

212-739-6400

UBS EUCALYPTUS FUND, L.L.C      270,000         877,500      

767 Third Avenue

New York, NY 10017

212-739-6400

PW EUCALYPTUS FUND, LTD      17,000         55,250      

767 Third Avenue

New York, NY 10017

212-739-6400

SUMMER STREET LIFE SCIENCES HEDGE FUND INVESTORS, LLC      148,000        
481,000      

767 Third Avenue

New York, NY 10017

212-739-6400

Visium Credit Master Fund, Ltd      1,828,528         5,942,716      

950 Third Avenue

New York, NY 10022

646-840-5800

Visium Balanced Master Fund, Ltd      1,296,472         4,213,534      

950 Third Avenue

New York, NY 10022

646-840-5800

Capital Ventures International      625,000         2,031,250      

401 City Line Avenue

Bala Cynwyd, PA 19004

415-403-6500

Hudson Bay Master Fund LTD      1,000,000         3,250,000      

120 Broadway

New York, NY 10271

212-571-1244

PFM Healthcare Fund, LP      2,128,976         6,919,172      

One Market Plaza

San Francisco, CA 94105

415-281-1000

PFM Healthcare Principals Fund, LP      277,951         903,341      

One Market Plaza

San Francisco, CA 94105

415-281-1000

PFM Healthcare Offshore Fund, Ltd      1,593,073         5,177,487      

One Market Plaza

San Francisco, CA 94105

415-281-1000

 

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