PHARMACEUTICAL RESOURCES, INC.
13,634,012 SHARES OF COMMON STOCK, $0.01 PAR VALUE PER SHARE
PLACEMENT AGENCY AGREEMENT
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August 21, 2001
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
As Placement Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sir or Madam:
You have approached EMD, Inc., a Delaware corporation, Genpharm Inc., a
corporation organized under the laws of Ontario, and Merck KGaA, a
Kommanditgesellschaft auf Aktein organized under the laws of Germany (each, a
"Selling Stockholder," and collectively, the "Selling Stockholders"), to
determine whether the Selling Stockholders would be interested in selling
13,634,012 shares (the "Shares") of common stock, par value $0.01 per share (the
"Common Stock"), of Pharmaceutical Resources, Inc., a New Jersey corporation
(the "Company"), beneficially owned by the Selling Stockholders, to certain
Investors (as defined below). The Selling Stockholders have informed you that no
decision has been made by them to sell the Shares, but that if the Selling
Stockholders were to receive offers to purchase the Shares on terms and
conditions, including price, deemed acceptable to the Selling Stockholders, the
Selling Stockholders may determine to sell the Shares, subject to obtaining
necessary internal corporate approvals by the Selling Stockholders. You have
provided the Selling Stockholders with offers from Investors to purchase the
Shares on terms and conditions that the Selling Stockholders are considering
accepting. The Selling Stockholders desire to engage you, and any sub-agent
designated by you, as their placement agent (the "Placement Agent") in
connection with the possible sale of the Shares to the Investors. The Shares are
more fully described in the Registration Statement (as hereinafter defined).
The Company and the Selling Stockholders hereby confirm as follows their
agreements with the Placement Agent.
1. Scope of Engagement. The Selling Stockholders hereby engage the
Placement Agent as their agent, acting on a reasonable best efforts basis, in
the private placement of the Shares of the Company beneficially owned by the
Selling Stockholders (a "Transaction") to one or more accredited investors
(collectively, the "Investors"). The number and price of the Shares that each
Selling Stockholder may ultimately agree to sell, pursuant to the Purchase
Agreements (as defined below), are entirely within its discretion.
2. Offering Process. The Placement Agent hereby accepts the engagement and
in that connection agrees to:
(a) assist the Company in the preparation of a Private Placement
Memorandum, as such may be amended or supplemented (the "Memorandum"),
describing the Company, the Selling Stockholders and the Common Stock; the
Memorandum will not be made available to potential Investors until such
Memorandum and its use shall be approved by the Company, the Selling
Stockholders, the Placement Agent and their respective counsel;
(b) prepare and provide to the Company and the Selling Stockholders the
list of the Investors to be contacted by the Placement Agent in connection with
a Transaction (the "Investor Contact List");
(c) if appropriate, assist the Company and the Selling Stockholders
with the preparation of any other communications to be used in placing the
Shares, whether in the form of letter, circular, notice or otherwise; and
(d) assist with the negotiation of the final terms and conditions for
the sale of the Shares to the Investors.
3. Company's and Selling Stockholders' Responsibilities, Representations
and Warranties.
(a) In connection with the engagement of the Placement Agent, the
Company will furnish the Placement Agent with all information concerning the
Company that the Placement Agent and its counsel shall reasonably request and
will provide the Placement Agent and its counsel with reasonable access to the
Company's officers, directors, accountants, counsel and other advisors. The
Company represents and warrants to the Placement Agent that: (i) the Memorandum,
including any documents attached as exhibits to the Memorandum and/or
incorporated by reference therein, and, when delivered, any communications
.prepared pursuant to Section 2(c) above, is and will be true and accurate in
all material respects and the Memorandum does not and will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in the light of the circumstances under
which they were made, not misleading; and (ii) any projected financial
information or other forward-looking information which the Company provides to
the Placement Agent will be provided by the Company in good faith and will
represent management's reasonable estimates. The Company and each Selling
Stockholder acknowledges and agrees that the Placement Agent will be using and
relying upon such information supplied by the Company and its officers, agents
and others and any other publicly available information concerning the Company
without any independent investigation or verification thereof or independent
appraisal by the Placement Agent of the Company or its business or assets.
(b) The Company and the Selling Stockholders shall keep the Memorandum
confidential and shall not distribute it or any other materials related to the
Transaction contemplated hereby, or otherwise advertise to or solicit purchasers
of Shares, without the consent of the Placement Agent.
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(c) In connection with the engagement of the Placement Agent, the
Selling Stockholders will furnish the Placement Agent with all information
concerning the Selling Stockholders that the Placement Agent and its counsel
shall reasonably request. The Selling Stockholders represent and warrant to the
Placement Agent that all such information is and will be true and accurate in
all material respects and does not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made, in the light of the circumstances in which they were made, not
misleading.
(d) The sale of Shares to any Investor will be evidenced by a purchase
agreement ("Purchase Agreement") among the Selling Stockholders, the Company and
such Investor. Prior to the execution of any Purchase Agreement, the Company
will make its management, including officers with responsibility for financial
affairs, reasonably available to the Investors to address inquiries by the
Investors regarding the Company. Subject to the Selling Stockholders' approval,
the selling price of the Shares to be sold by the Selling Stockholders to the
Investors pursuant to the Purchase Agreements will be specified in writing by
the Placement Agent on behalf of the Selling Stockholders (by fax, letter or
otherwise) to the Investors prior to the execution of the Purchase Agreements.
(e) The form of Purchase Agreement shall be reasonably satisfactory to
the Placement Agent. The Company and the Selling Stockholders will perform the
covenants set forth in the Purchase Agreements. The Purchase Agreements will
require the Company to file, promptly after execution and delivery of such
Purchase Agreements by all parties thereto, a registration statement with the
Securities and Exchange Commission (the "SEC") for the resale from time to time
of the Shares to be sold to the Investors pursuant to such Purchase Agreements
(the "Registration Statement"). Neither the Company nor the Selling Stockholders
will modify any such Purchase Agreements, nor will they execute and deliver any
additional Purchase Agreements after the time the Company has filed the
Registration Statement with the SEC. The closing of the sale of the Shares
contemplated by the Purchase Agreements (the "Closing") shall be held promptly
following the receipt by the Company of confirmation by the SEC of its
willingness to declare effective the Registration Statement (or on such other
later date as the Placement Agent and the Selling Stockholders both agree) and
the satisfaction of the other conditions set forth in such Purchase Agreements.
(f) The Company agrees that the Placement Agent shall be entitled to
rely on the representations and warranties of the Company contained in the
Purchase Agreements as if they were made directly to the Placement Agent. Each
Selling Stockholder, jointly and severally, (i) represents and warrants that the
representations and warranties of such Selling Stockholder contained in the
Purchase Agreements will be true and correct in all respects on the date of such
Purchase Agreements and on the Closing Date and (ii) agrees that the Placement
Agent shall be entitled to rely on such representations and warranties as if
they were made directly to the Placement Agent.
(g) Neither the Company nor any Selling Stockholder shall take or
permit its respective directors, officers, employees, agents, affiliates
controlled by it or associates to take any action that would cause the sale of
Shares contemplated by this
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Agreement to fail to qualify for an exemption from the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act").
(h) The Company will cause its independent public accountants to
address and deliver to the Company and the Placement Agent a letter or letters
(which letters are frequently referred to as "Comfort Letters") dated as of the
Closing, which letter or letters shall be in the form reasonably requested by
the Placement Agent.
(i) The Company will cause its counsel to address and deliver to the
Company and the Placement Agent opinions dated, respectively, as of the date of
the Closing and as of the date of effectiveness of the Registration Statement,
which opinions shall be in the form reasonably requested by the Placement Agent.
(j) The Company will cause its outside intellectual property and/or
regulatory counsel to address and deliver to the Placement Agent one or more
opinions, dated as of the Closing, which opinions shall be in the form
reasonably requested by the Placement Agent.
(k) The Company acknowledges that the Purchase Agreements will require
the Company's counsel, its intellectual property counsel and/or its regulatory
counsel to deliver one or more opinions to the Investors. The Company agrees
that the Placement Agent shall be entitled to rely on any opinions delivered to
the Investors in connection with the Transaction and resale of the Shares under
the Registration Statement.
(l) For a period of ninety (90) days from the effective date of the
Registration Statement, neither the Company nor any Selling Stockholder will,
without the prior written consent of the Placement Agent, sell, contract to sell
or otherwise dispose of or issue any securities of the Company, except pursuant
to previously issued options, any agreements providing for anti-dilution or
other share issuance rights in existence on the date hereof, any employee
benefit or similar plan of the Company in existence on the date hereof, or any
strategic investment and/or alliance transactions, acquisition or joint venture
the Company may enter into.
(m) During the time the Registration Statement is effective covering
the resale of any Shares sold to Investors, the Company will furnish to the
Placement Agent:
(i) as soon as practicable (but in the case of the annual
report of the Company to its stockholders, within 150 days after the end of
each fiscal year of the Company), one copy of: (A) its annual report to its
stockholders (which annual report shall contain financial statements
audited in accordance with generally accepted accounting principles in the
United States of America by a firm of certified public accountants of
recognized standing), (B) if not included in substance in its annual report
to stockholders, its annual report on Form 10-K, (C) each of its quarterly
reports to its stockholders and, if not included in substance in its
quarterly report to stockholders, its quarterly report on Form 10-Q and any
other document or agreement that is
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incorporated by reference into the Registration Statement, and (D) a copy
of the full Registration Statement (the foregoing in each case, excluding
exhibits), and
(ii) upon reasonable request, all exhibits excluded by the
parenthetical to clause (D) of the immediately preceding subsection (i) and
all other information that is generally available to the public,
and the Company, upon reasonable request, will meet with the Placement Agent or
its representatives to discuss all information relevant for disclosure in the
Memorandum and will reasonably cooperate in any investigation undertaken by the
Placement Agent thereof, including any document included or incorporated by
reference therein.
4. Compensation. As compensation for the services rendered by the Placement
Agent hereunder, the Selling Stockholders shall pay the Placement Agent a fee
equal to 4.5% of the gross proceeds paid by the Purchasers for the Shares
pursuant to the Purchase Agreements. The fees set forth in this Section 4 shall
be payable with respect to any private placement or similar transaction
involving the sale of Shares that occurs either (a) during the term of the
Placement Agent's engagement hereunder regardless of whether the Investor is on
the Investor Contact List or (b) at any time during a period of six months
following the effective date of termination of the Placement Agent's engagement
hereunder if such transaction includes a sale of Shares to an Investor who is
named on the Investor Contact List, or any parent, subsidiary or other affiliate
thereof.
5. Reimbursable Expenses. The Selling Stockholders shall reimburse the
Placement Agent (up to a maximum of $175,000) for its out-of-pocket and
incidental expenses incurred in connection with any Transaction (whether or not
consummated), including the reasonable fees and expenses of its legal counsel
and those of any advisor retained by the Placement Agent. Such expenses are to
be paid in cash upon the Selling Stockholders' receipt of a ▇▇▇▇ from the
Placement Agent from time to time and in all events upon the closing of a
Transaction.
6. Indemnification.
(a) Company Indemnification.
(i) The Company agrees to indemnify and hold harmless the
Placement Agent and its affiliates, their respective directors, officers,
controlling persons (within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act), if any, agents and employees of the
Placement Agent or any of the Placement Agent's affiliates (collectively,
"Indemnified Persons" and individually, an "Indemnified Person") from and
against any and all actions, claims, suits, proceedings, liabilities,
losses, damages and expenses incurred, joint or several (collectively,
"Claims"), by any Indemnified Person (including reasonable fees and
disbursements of the Placement Agent and an Indemnified Person's counsel)
insofar as such Claims arise out of or are based upon any untrue statement
of any material fact contained in the
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Memorandum (or any other material used by the Company or
authorized by the Company for use in connection with the Transaction)
and/or the Registration Statement, including the prospectus, financial
statements and schedules, and all other documents filed as a part of the
Registration Statement, as amended at the time of effectiveness of the
Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule
430A, or pursuant to Rule 434 of the rules and regulations promulgated by
the SEC under the Securities Act (the "Rules and Regulations"), or the
prospectus, in the form first filed with the SEC pursuant to Rule 424(b) of
the Rules and Regulations, or filed as part of the Registration Statement
at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or
are based upon the omission to state in such document a material fact
required to be stated therein or necessary to make the statements in the
Memorandum and/or the Registration Statement or any amendment or supplement
thereto not misleading or in the Prospectus or any amendment or supplement
thereto not misleading, in light of the circumstances under which they were
made, or (if the transactions contemplated herein are consummated) arise
out of or are based on any material breach in the representations and
warranties of the Company contained in this Agreement, or any failure of
the Company to perform its obligations hereunder or under law, and will
reimburse any Indemnified Person for any legal and other expenses as such
expenses are reasonably incurred by such Indemnified Person for any legal
and other expenses as such expenses are reasonably incurred by such
Indemnified Person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action (collectively, "Costs"); provided, however, that the Company will
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not be liable in any such case to the extent that any such Claim resulted
directly and primarily from an Indemnified Person's gross negligence or
willful misconduct.
(ii) The Company agrees that neither the Placement Agent nor
any other Indemnified Person shall have any liability to the Company for or
in connection with such engagement except liability for Claims which are
found in a final judgment by a court of competent jurisdiction (not subject
to further appeal or as to which appeal has been waived) to have resulted
directly and primarily from an Indemnified Person's gross negligence or
willful misconduct. The Company shall be liable for any settlement of any
claim against the Placement Agent made with the Company's written consent,
which consent shall not be unreasonably withheld. The Company also agrees
that the Company will not, without the prior written consent of the
Placement Agent, settle or compromise or consent to the entry of any
judgment in any pending or threatened Claim in respect of which
indemnification may be sought hereunder (whether or not the Placement Agent
or any Indemnified Person is an actual or potential party to such Claim).
Such settlement, compromise or consent shall include an unconditional
release of the Placement Agent and each other Indemnified Person from all
liability arising out of such Claim, and the Company shall furnish the
Placement Agent with a copy of such settlement reasonably in advance of
entering into such settlement.
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(iii) In order to provide for just and equitable
contribution, if a demand for indemnification or reimbursement for Claims
or Costs is made pursuant to these provisions but is not available for any
reason, then the Company, on the one hand, and the Placement Agent, on the
other hand, shall contribute to such Claims or Costs for which such
indemnification or reimbursement is held unavailable in such proportion as
is appropriate to reflect the relative benefits to the Company, on the one
hand, and the Placement Agent on the other hand, in connection with the
transaction or transactions from which the Claims or Costs in question
arose. The relative benefits received by the Company, on the one hand, and
by the Placement Agent, on the other hand, shall be deemed to be in the
same proportion as the value (before deducting expenses) of the
consideration paid by or received by the Company (which for these purposes
shall include the consideration received by the Selling Stockholders), in
connection with the transaction or transactions from which the Claims or
Costs in question arose bears to the total fees actually received by the
Placement Agent in connection therewith. If the allocation provided by the
foregoing sentence is not permitted by applicable law, then such allocation
shall be based not only on such relative benefits determined as aforesaid
but also on the relative fault of the Company, on the one hand, and the
Placement Agent, on the other, as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined by
reference to, among other things, the parties' relative intents, knowledge,
access to information and, if applicable, whether any untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or by
the Placement Agent, and any other equitable considerations appropriate in
the circumstances. Any such contribution shall be subject to the limitation
that in any event the Placement Agent's aggregate contribution to all
Claims or Costs for which contribution is available hereunder shall not
exceed the amount of fees actually received by the Placement Agent pursuant
to the particular engagement relating to the transaction or transactions
from which the Claims or Costs in question arose.
(iv) The foregoing rights to indemnity, reimbursement and
contribution shall be in addition to any rights that the Placement Agent,
the Company and/or any other Indemnified Person may have at common law or
otherwise.
(b) Selling Stockholders Indemnification.
(i) In connection with the engagement agreement, the Selling
Stockholders, jointly and severally, agree to indemnify and hold harmless
the Placement Agent and its affiliates, their respective directors,
officers, controlling persons (within the meaning of Section 15 of the
Securities Act, or Section 20(a) of the Exchange Act), if any, agents and
employees of the Placement Agent or any of the Placement Agent's affiliates
(collectively, "Indemnified Persons" and individually, an "Indemnified
Person") from and against any and all actions, claims, suits, proceedings,
liabilities, losses, damages and expenses incurred, joint or several
(collectively, "Claims"), by any Indemnified Person (including reasonable
fees and disbursements of the Placement
7
Agent and an Indemnified Person's counsel) which are related to or arise
from the Placement Agent's engagement by the Selling Stockholders,
including Claims that relate to or arise from (1) the inaccuracy, in whole
or in part, of any representation or warranty made by the Selling
Stockholders in the Purchase Agreement; (2) any untrue statement or alleged
untrue statement made by the Selling Stockholders in the Purchase
Agreement; (3) any untrue statement or alleged untrue statement of any
material fact contained in the Memorandum and/or the Registration Statement
(or any other material used by the Company or authorized by the Company for
use in connection with the Transaction, provided, that, any other such
material shall have been provided to the Selling Stockholders a reasonable
period in advance of its use) concerning the Selling Stockholders; or (4)
the omission or alleged omission to state in such document a material fact
concerning the Selling Stockholders required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, and will reimburse the Placement
Agent and any other Indemnified Person for all costs and expenses
(including reasonable fees and disbursements of the Placement Agent or an
Indemnified Person's counsel), as they are incurred, in connection with
investigating, preparing for, providing depositions for, testifying in or
defending any such action or claim, formal or informal, investigation,
inquiry or other proceeding, whether or not in connection with pending or
threatened litigation, whether or not the Placement Agent or any
Indemnified Person is named as a party thereto and whether or not any
liability results therefrom related to or arising from the foregoing
(collectively, "Costs"). The Selling Stockholders shall not, however, be
responsible for any Claims, which are found in a final judgment by a court
of competent jurisdiction (not subject to further appeal) to have resulted
directly and primarily from an Indemnified Person's gross negligence or
willful misconduct.
(ii) If the Company shall sustain any indemnification
liability under Section 6(a) hereof and such liability shall be reasonably
attributable or related to (x) any breach of a representation or warranty
of such Selling Stockholders contained in this Agreement or (y) any untrue
statement of material fact concerning the Selling Stockholders made by any
Selling Stockholder and/or any of its affiliates to the Company in the
Memorandum and/or the Registration Statement, such Selling Stockholders
shall, jointly and severally, indemnify and hold harmless the Company from
such liability and pay or reimburse the Company for any related costs. The
provisions of this Agreement shall not affect any arrangements, agreements
or understanding as between the Company and the Selling Stockholders
concerning indemnification, including those agreements between the Company
and the Selling Stockholders contained in Section 8 of the Purchase
Agreement.
(iii) The Selling Stockholders agree that neither the
Placement Agent nor any other Indemnified Person shall have any liability
to the Selling Stockholders for or in connection with such engagement
except, to the extent that liability for Claims which are found in a final
judgment by a court of competent jurisdiction (not subject to further
appeal) to have resulted directly and primarily from
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an Indemnified Person's gross negligence or willful misconduct. The Selling
Stockholders also agree that no Selling Stockholder will, without the prior
written consent of the Placement Agent, settle or compromise or consent to
the entry of any judgment in any pending or threatened Claim in respect of
which indemnification may be sought hereunder (whether or not the Placement
Agent or any Indemnified Person is an actual or potential party to such
Claim). Such prior written consent of the Placement Agent shall be required
only with respect to the Placement Agent determining that such settlement,
compromise or consent complies with the terms of the following sentence and
does not impose any material obligation on the Placement Agent or any other
Indemnified Person or contain any admission of culpability on the part of
the Placement Agent or any Indemnified Person. Such settlement, compromise
or consent shall include an unconditional release of the Placement Agent
and each other Indemnified Person from all liability arising out of such
Claim, and such Selling Stockholder shall furnish the Placement Agent with
a copy of such settlement reasonably in advance of entering into such
settlement.
(iv) In order to provide for just and equitable
contribution, if a demand for indemnification or reimbursement for Claims
or Costs is made pursuant to these provisions but is not available for any
reason, then the Selling Stockholders, on the one hand, and the Placement
Agent, on the other hand, shall contribute to such Claims or Costs for
which such indemnification or reimbursement is held unavailable in such
proportion as is appropriate to reflect the relative benefits to the
Selling Stockholders, on the one hand, and the Placement Agent, on the
other hand, in connection with the transaction or transactions from which
the Claims or Costs in question arose. The relative benefits received by
the Selling Stockholders, on the one hand, and by the Placement Agent, on
the other hand, shall be deemed to be in the same proportion as the value
(before deducting expenses) of the consideration paid by or received by the
Selling Stockholders, in connection with the transaction or transactions
from which the Claims or Costs in question arose bears to the total fees
actually received by the Placement Agent in connection therewith. If the
allocation provided by the foregoing sentence is not permitted by
applicable law, then such allocation shall be based not only on such
relative benefits determined as aforesaid but also on the relative fault of
the Selling Stockholders, on the one hand, and the Placement Agent, on the
other, as well as any other relevant equitable considerations. The relative
fault of the parties shall be determined by reference to, among other
things, the parties' relative intents, knowledge, access to information
and, if applicable, whether any untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Selling Stockholders or by the
Placement Agent, and any other equitable considerations appropriate in the
circumstances. Any such contribution shall be subject to the limitation
that in any event the Placement Agent's aggregate contribution to all
Claims or Costs for which contribution is available hereunder shall not
exceed the amount of fees actually received by the Placement Agent pursuant
to the particular engagement relating to the transaction or transactions
from which the Claims or Costs in question arose.
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(v) Notwithstanding the other provisions of this Agreement,
no Selling Stockholder shall be liable for indemnification hereunder for an
amount exceeding the total net proceeds received by such Selling
Stockholder from a Transaction.
(vi) The foregoing rights to indemnity, reimbursement and
contribution shall be in addition to any rights that the Placement Agent
and/or any other Indemnified Person may have at common law or otherwise.
7. Assignment.
(a) The Placement Agent may, with the prior approval of the Company and
the Selling Stockholders, designate one or more sub-agents; it being understood
that the Placement Agency disclaims any liability resulting from the actions of
the sub-agents.
(b) Without the consent of the Placement Agent, each Selling
Stockholder and the Company agree that during the term of the Placement Agent's
engagement hereunder: (i) it will not, and will not permit its representatives
to, contact or solicit institutions, corporations or other entities other than
the Investors on the Investor Contact List as potential purchasers of the Shares
and (ii) it will not pursue any financing transaction with respect to the Shares
which would be in lieu of a Transaction. Furthermore, each Selling Stockholder
and the Company agree that during the term of the Placement Agent's engagement
hereunder, all inquiries, whether direct or indirect, from prospective Investors
as to the Shares will be referred to the Placement Agent and will be deemed to
be added to the Investor Contact List.
8. Advertisements. Upon completion of a Transaction, the Placement Agent
may place advertisements in financial and other publications at its own expense
describing its services to the Selling Stockholders hereunder.
9. Survival of Terms of Agreement. Subject to the provisions of Sections 3
(excluding the first sentence thereof) through 6, and 9 through 13 which shall
survive any termination of this Agreement, the Selling Stockholders may
terminate the Placement Agent's engagement hereunder at any time after six
months after the date hereof, with or without cause, by giving the other parties
at least 10 days' prior written notice; provided, however, that the
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representations and warranties of the Company and the Selling Stockholders
contained in Section 3 hereof shall survive for one (1) year following the date
hereof. The Placement Agent may terminate this Agreement at any time, with or
without cause, by giving the other parties at least 10 days' prior written
notice. Upon termination of the Placement Agent's engagement hereunder by any
party hereto, the Placement Agent shall provide the Selling Stockholders and the
Company with a final Investor Contact List.
10. Disclosure to Third Parties. Without the prior written consent of the
Placement Agent, none of the Selling Stockholders or the Company will, subject
to applicable securities laws, publicly refer to the Placement Agent or publicly
disclose or otherwise make
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available to third parties other than to Investors (except the Selling
Stockholders' or the Company's counsel or other advisers; provided, the Selling
Stockholders or the Company, as applicable, informs them of this provision) and
other than in the Memorandum, any advice, either oral or written, which the
Placement Agent provides to the Selling Stockholders in connection with this
engagement.
11. Successors and Assigns. The benefits of this Agreement shall inure to
the respective successors and permitted assigns of the parties hereto and of the
indemnified parties under such indemnification agreement and their respective
successors, permitted assigns and representatives, and the obligations and
liabilities assumed in this Agreement by the parties hereto shall be binding
upon their respective successors and assigns. This Agreement may not be assigned
without the prior written consent of the non-assigning parties.
12. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman and
Chief Executive Officer, with a copy to ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, 1251 Avenue
of the Americas, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇; (b) if to any Selling Stockholder, at the office of Merck KGaA,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
or (c) if to the Placement Agent, at the office of the Placement Agent, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Private Equity Group, Messrs. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇. Any such notice shall be effective only upon
receipt. Any notice under Section 6 may be made by facsimile or telephone, but
if so made shall be subsequently confirmed in writing.
13. Other Terms and Conditions.
(a) The Company further represents and warrants to the Placement Agent
that:
(i) the Company has taken no action that would give any
brokers, representatives, finders or other persons an interest in the
compensation due to the Placement Agent in connection with any transaction
contemplated herein and there are no other financial advisors or similar
persons entitled to receive compensation from the Company in connection
with any transaction contemplated herein; and
(ii) this Agreement does not violate or constitute a breach
or default under any contract, agreement, arrangement or understanding,
whether written or oral, to which the Company or any of its subsidiaries is
a party or by which its or their assets are bound.
(b) Each Selling Stockholder further represents and warrants to the
Placement Agent that:
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(i) such Selling Stockholder has taken no action that would
give any brokers, representatives, finders or other persons an interest in
the compensation due to the Placement Agent in connection with any
transaction contemplated herein and there are no other financial advisors
or similar persons entitled to receive compensation from the Selling
Stockholders in connection with any transaction contemplated herein; and
(ii) this Agreement does not violate or constitute a breach
or default under any contract, agreement, arrangement or understanding,
whether written or oral, to which such Selling Stockholder or any of its
subsidiaries is a party or by which its or their assets are bound.
(c) This Agreement may not be amended or modified except in a writing
signed by the party against whom enforcement is sought and shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to its principles of conflicts of laws.
(d) EACH OF THE PLACEMENT AGENT, THE SELLING STOCKHOLDERS AND THE
COMPANY (ON THE COMPANY'S AND THE SELLING STOCKHOLDERS' OWN BEHALF AND, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF THEIR RESPECTIVE STOCKHOLDERS)
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, CLAIM, SUIT, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATING TO OR
ARISING OUT OF THE ENGAGEMENT OF THE PLACEMENT AGENT PURSUANT TO, OR THE
PERFORMANCE BY THE PLACEMENT AGENT OF THE SERVICES CONTEMPLATED BY, THIS
AGREEMENT.
(e) The validity and interpretation of this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of New
York. Each of the Company and the Selling Stockholders irrevocably (a) submits
to the jurisdiction of any court of the State of New York or the United States
District Court for the Southern District of the State of New York for the
purpose of any suit, action, or other proceeding arising out of this Agreement,
or any of the agreements or transactions contemplated hereby (each, a
"Proceeding"), (b) agrees that all claims in respect of any Proceeding may be
heard and determined in any such court, (c) waives, to the fullest extent
permitted by law, any immunity from jurisdiction of any such court or from any
legal process therein, (d) agrees not to commence any Proceeding other than in
such courts, and (e) waives, to the fullest extent permitted by law, any claim
that such Proceeding is brought in an inconvenient forum. Each Selling
Stockholder hereby irrevocably designates CT Corporation located at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as its agent for such purposes, and covenants
and agrees that service of process in a Proceeding may be made upon it at its
office or at the specified office of such agent.
(f) The purpose of this Agreement is to set forth the services that the
Placement Agent will provide to the Selling Stockholders, as an independent
contractor, either
12
as specifically provided herein or as subsequently requested in writing by any
Selling Stockholder and agreed to by the Placement Agent. The parties hereto do
not intend to create any special or fiduciary relationship between them. In
addition, the exclusivity of the relationship between the Placement Agent and
the Selling Stockholders refers to the fact that the services to be provided by
the Placement Agent hereunder are to be provided solely by the Placement Agent
and that the fees to be paid by the Selling Stockholders hereunder are solely
for the benefit of the Placement Agent. There may be other services that are
required to be provided to the Selling Stockholders and the Company in
connection with any transaction contemplated by this Agreement and which will be
provided by others (e.g., independent auditors or appraisers). Furthermore, the
parties hereto understand that the Placement Agent is not required to purchase
any Shares. This Agreement is solely for the benefit of the Placement Agent, the
Selling Stockholders and the Company and is not intended to create rights or
obligations of any party for the benefit of third parties, including without
limitation the creditors of the Selling Stockholders or the Company. Each of the
Company and the Selling Stockholders also agree that the Placement Agent shall
not have any liability (including without limitation, liability for any losses,
claims, damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses or disbursements) in contract, tort or otherwise to the Company or to
any Selling Stockholder or to any person claiming through the Company or any
Selling Stockholder, in connection with the engagement of the Placement Agent
pursuant to this Agreement and the matters contemplated hereby, except to the
extent any such liability is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from the gross negligence or willful misconduct of the Placement Agent.
(g) The Selling Stockholders and the Company acknowledge that the
Placement Agent is a full service securities firm and in the ordinary course of
its business, for its own account or the accounts of its customers, holds long
or short positions in securities or derivative securities (including options),
which may include securities or derivative securities relating to the Company or
other entities which may be involved in the engagement contemplated hereby.
Nothing in this Agreement shall be deemed to prohibit the Placement Agent from
providing any services permitted by applicable law to any third party or from
engaging in any lawfully permitted activity on its own behalf.
(h) 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.
(i) This Agreement constitutes the entire understanding between the
parties hereto as to the matters covered hereby and supersedes all prior
understandings, written or oral, relating to such subject matter.
[Signature page follows]
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the Placement Agent.
Very truly yours,
PHARMACEUTICAL RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and CEO
EMD, INC.
By: /s/ ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
GENPHARM INC.
By: /s/ ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
MERCK KGaA
By: /s/ ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Confirmed as of the date first
above mentioned:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇. ▇. ▇▇▇▇
------------------------------
Name: ▇. ▇. ▇▇▇▇
Title: S.M.D,