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REGISTRATION RIGHTS AGREEMENT
August 9, 1999
To Hoechst Corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
This will confirm that in consideration of our mutual agreements in
connection with the proposed acquisition of ▇▇▇▇▇▇ Pharmaceutical, Inc. (the
"Company") by Teva Pharmaceuticals USA, Inc. ("T") pursuant to the Agreement and
Plan of Merger between the Company, T and Caribou Merger Corporation ("TS")
dated the date hereof (the "Merger Agreement"), the Company covenants and agrees
with you as follows:
1. Certain Definitions. As used in this Registration Rights Agreement, the
following terms shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock, $0.1 par value, of the
Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Registration Expenses" shall mean the expenses so described in Section
4.
"Restricted Stock" shall mean the 9,934,100 shares of Common Stock owned
by you on the date hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 4.
2. Required Registration. (a) At any time after September 30, 1999, you may
request the Company to register under the Securities Act up to 4,967,050 shares
of Restricted
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Stock held by you for sale to not more than ten (10) purchasers as contemplated
in the Stockholder Agreement dated the date hereof between you, T and TS (the
"Stockholder Agreement"), for the sole purpose contemplated by Section 6(a) of
the Stockholder Agreement, as in effect on the date hereof (the "Relevant
Section"), and the Company shall use its reasonable best efforts to so register
such securities. The Company shall not include in any such registration any
securities other than shares of Restricted Stock. Nothing in this Agreement
shall require the Company to take any action that would, or would reasonably be
expected to, breach or result in a breach of the Company's obligations under the
Merger Agreement or of your obligations under the Stockholder Agreement (as such
term is defined in the Merger Agreement).
(b) The Company shall be obligated to file only one registration
statement pursuant to this Section 2. Such registration statement shall, if you
so request and subject to the terms and conditions of this Agreement and the
Relevant Sections, permit the sale of Restricted Stock on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act.
3. Registration Procedures. If and whenever the Company is required by the
provisions of Section 2 to use its reasonable best efforts to effect the
registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such securities and use its reasonable best efforts to cause such
registration statement to become effective by October 31, 1999;
(b) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for the period
specified in Section 8(f) below and comply with the provisions of the Securities
Act with respect to the disposition of all Restricted Stock covered by such
registration statement;
(c) furnish to you such number of copies of the registration statement
and the prospectus included therein (including each preliminary prospectus and
any amendments and supplements thereto) you reasonably may request in order to
facilitate the disposition of the Restricted Stock covered by such registration
statement in accordance with this Agreement and the Relevant Sections;
(d) use its reasonable best efforts to register or qualify the
Restricted Stock covered by such registration statement under the securities or
"blue sky" laws of such jurisdictions as you reasonably shall request, provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(e) immediately notify you at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event of which the Company has knowledge as a result of which the
prospectus contained in such registration
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statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing and, at your request, as soon as reasonably practicable and subject to
Section 8(g), prepare and furnish to you a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Restricted Stock, such prospectus
shall 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 in the light of the circumstances then existing;
(f) make available for inspection by you and any attorney, accountant or
other agent retained by you, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by you or your attorney, accountant or agent in connection with such
registration statement.
In connection with any registration hereunder, you will furnish to the
Company in writing such information with respect to yourself and the proposed
distribution by you as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws.
The Company shall not be required to enter into an underwriting agreement
in connection with any registration hereunder.
4. Expenses. All out-of-pocket expenses incurred by the Company in
complying with Sections 2 and 3 that it would not have incurred absent taking
the actions required by Sections 2 and 3 hereunder, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the Company,
fees and expenses (including counsel fees) incurred in connection with complying
with state securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars, costs of insurance and fees and disbursements of your counsel are
called "Selling Expenses". Expenses that the Company would have incurred absent
taking the actions required by Sections 2 and 3 hereunder are called
"Registration Expenses."
The Company will pay all Registration Expenses in connection with any
registration under Sections 2 and 3. All Selling Expenses shall be borne by you.
5. Indemnification and Contribution. (a) In the event of a registration of
any of the Restricted Stock under the Securities Act pursuant to Section 2, the
Company will indemnify and hold harmless you and each other person, if any, who
controls you within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several (collectively "Losses"), to
which you or such controlling person may become subject under the Securities
Act, insofar as such Losses arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any registration
statement under which such Restricted Stock was registered under the Securities
Act pursuant to Section 2, any preliminary
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prospectus or final prospectus contained therein, or any amendment or supplement
thereof, 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 will reimburse you and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Losses, provided,
however, that the Company will not be liable in any such case if and to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by you or any such controlling person in
writing specifically for use in such registration statement or prospectus or
arise from any act by you or any of your affiliates not disclosed in writing to
the Company including, without limitation, breach of the Stockholder Agreement.
(b) In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Section 2, you will indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the registration
statement and each director of the Company, against all Losses, to which the
Company or such officer, director or controlling person may become subject under
the Securities Act or otherwise, insofar as such Losses arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Section 2, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, 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 will reimburse the Company and each
such officer, director and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Losses, provided, however, that you will be liable hereunder in any such
case if and only to the extent that any such Losses arise out of or are based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining to
you furnished to the Company by you specifically for use in such registration
statement or prospectus or arises from any act by you or any of your affiliates
not disclosed in writing to the Company, including, without limitation, breach
of the Stockholder Agreement.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 5 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 5 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be
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liable to such indemnified party under this Section 5 for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected, provided, however, that, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified party shall have the right to select a separate counsel
and to assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
(d) If the indemnification provided for in this Section 5 is unavailable
to an indemnified party in respect of any Losses or is insufficient to hold such
indemnified party harmless, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the indemnifying party, on
the one hand, and such indemnified party, on the other hand, in connection with
the actions, statements or omissions that resulted in such Losses. The relative
fault of such indemnifying party, on the one hand, and the indemnified party, on
the other hand, shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
taken by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent any such action, statement or
omission. The parties hereto agree that it would not be just and equitable if
such contribution were determined by pro rata allocation or by any other method
of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
foregoing provisions of this Section 5(d), (A) you will not be required to
contribute any amount in excess of the public offering price of all the
Restricted Stock offered pursuant to such registration statement; and (B) no
person or entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation.
6. Changes in Common Stock. If, and as often as, there is any change in the
Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Restricted Stock as so changed that you then own.
7. Representations and Warranties of the Company. The Company represents
and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company
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have been duly authorized by all requisite corporate action and will not violate
any provision of law, any order of any court or other agency of government, the
Charter or By-laws of the Company or any provision of any indenture, agreement
or other instrument to which it or any or its properties or assets is bound,
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company.
8. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto, whether so expressed or
not, provided, however, that registration rights conferred herein on you shall
only inure to the benefit of a transferee of Restricted Stock that is controlled
by you, controls you or is under common control with you.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be delivered in person, mailed by certified or
registered mail, return receipt requested, or sent by telecopier or telex,
addressed at such address or addresses as shall have been furnished in writing
to the Company (in the case of a holder of Restricted Stock) or to the holders
of Restricted Stock (in the case of the Company) in accordance with the
provisions of this paragraph.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the the State of Delaware, without giving effect to the principles
of conflicts of law thereof.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and you.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The obligations of the Company to register shares of Restricted
Stock under Section 2 or keep effective a registration statement hereunder shall
terminate on the earliest of (i) January 10, 2000, (ii) termination of the
Merger Agreement, (iii) termination of the Stockholder Agreement or (iv)
termination, withdrawal or expiration of the Offer (as defined in the Merger
Agreement) without TS accepting for payment thereunder shares of Common Stock.
(g) Notwithstanding any provisions of this Agreement to the contrary,
the Company's obligation to file a registration statement, or cause such
registration statement to
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become and remain effective, shall be suspended for a period not to exceed 10
days if there exists at the time material non-public information relating to the
Company, the premature disclosure of which would, in the reasonable opinion of
the Company, adversely affect the Company.
(h) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
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Please indicate your acceptance of the foregoing by signing and returning the
enclosed counterpart of this letter, whereupon this Agreement shall be a binding
agreement between the Company and you.
Very truly yours,
▇▇▇▇▇▇ Pharmaceutical, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: President and CEO
AGREED TO AND ACCEPTED as of the date first above written.
Hoechst Corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President