OPTION LETTER AGREEMENT
Schedule
99.8
To:
Alkaloida
Chemical Company Exclusive Group Ltd.
4440
Tiszavasvari
Xxxxx
Xxxxx u 29
Hungary
Date:
May 18, 2007
OPTION
LETTER AGREEMENT
Reference
is made to the Share Purchase Agreement (the “SPA”),
dated
May 18, 2007 (the “SPA”),
between Taro Pharmaceutical Industries Ltd. (the “Company”)
and
Alkaloida Chemical Company Exclusive Group Ltd. (the “Purchaser”).
Capitalized terms not defined herein shall have the same meanings set forth
in
the SPA.
1. The
Options. (a) Taro
Development Corporation (“TDC”)
hereby
grants the Purchaser (the “Option
Holder”)
the
option to acquire TDC pursuant to a merger whereby a new wholly-owned subsidiary
of the Option Holder would merge into TDC (the “TDC
Option”)
for a
total merger, consideration of U.S.$18,088,275, (b) Xxxxxx Xxxxxx, Xxx
Xxxxxx and Xxx Xxxxx (the “Grantors”)
hereby
grant to the Option Holder the option to acquire 2,405,925 Ordinary Shares
held
by the Grantors at a purchase price of U.S.$7.75 per Ordinary Share (the
“Ordinary
Share Option”)
and
(c) Xxxxxx Xxxxxx grants the Option Holder an option to acquire all
Class B Common Stock of Xxxxxx and Company, Inc. held by Xxxxxx Xxxxxx for
no consideration (the “Xxxxxx
Option”
and
together with the TDC Option and the Ordinary Share Option, the “Options”),
in
each case upon the terms and conditions herein.
2. Exercise
of the Options. Each
of the Options referred to above may be exercised by the Option Holders at
any
time during the Option Exercise Period (as defined below) if the agreement
of
merger (the “Merger
Agreement”)
entered
into by Purchaser, the Company and the other parties named therein dated the
date hereof terminates for any reason other than pursuant to
Section 8.01(h) of the Merger Agreement, except that if the Merger
Agreement is terminated pursuant to Section 8.1(i) of the Merger Agreement,
then the Option will not be exercisable unless the transaction contemplated
by
the Specified Definitive Acquisition Agreement (as defined in the Merger
Agreement) is not consummated. If the Option Holder elects to exercise any
Option in accordance with the terms herein, it must exercise all of the Options.
3. Option
Exercise Period. The
Options may be exercised by the Option Holder within 30 days after
termination of the Merger Agreement as described in paragraph 2 above,
except that if the Merger Agreement is terminated pursuant to
Section 8.1(i) of the Merger Agreement, then the Options may only be
exercised within 30 days after the termination of the Specified Definitive
Acquisition Agreement (the “Option
Exercise Period”).
4. Tender
Offer. In
the event the Option Holder elects to exercise the Options in accordance with
the terms herein, the Option Holder will promptly thereafter commence a tender
offer (the “Tender
Offer”)
to
acquire any Ordinary Shares, other than those acquired pursuant to the Ordinary
Share Option, at a purchase price of U.S.$7.75 per share. The transactions
contemplated by the Options will be consummated contemporaneously with the
expiration of the Tender Offer. The Tender Offer shall expire not later than
25
business days after its commencement and, if any condition to the Tender Offer
is not satisfied or waived, the Options provided for herein shall immediately
terminate; provided,
however,
that
the Tender Offer period may be extended as permitted by applicable law or in
order to obtain any Governmental Authority approval necessary to consummate
the
transactions contemplated by the Options or the Tender Offer.
5. Shareholder
Undertakings. In
the event the Option Holder elects to exercise the Options in accordance with
the terms herein, the Grantors and Xxxxx Xxxxxx shall vote all securities of
TDC
beneficially owned by them in favor of the approval of the transactions
contemplated by the TDC Option.
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6. Representations
of TDC and the Grantors. (a) TDC
has the corporate right, power and authority to enter into and to perform its
obligations under this letter agreement and each of the Grantors and Xxxxx
Xxxxxx have the right, power and authority to enter into and to perform their
respective obligations under this letter agreement. The execution, delivery
and
performance by TDC of this Agreement have been duly authorized by all necessary
corporate action on the part of TDC.
(b) This
letter agreement has been duly and validly executed and delivered by TDC, the
Grantors and Xxxxx Xxxxxx and constitutes the legal, valid and binding
obligation of TDC, the Grantors and Xxxxx Xxxxxx enforceable against them in
accordance with its terms, subject to: (a) laws of general application
relating to bankruptcy, insolvency and the relief of debtors; and (b) rules
of law governing specific performance, injunctive relief and other equitable
remedies.
7. Governmental
Authority Approvals. If
in the written opinion of counsel to TDC reasonably acceptable to the Option
Holder, approval of any Governmental Authority is required in order to
consummate the transactions contemplated by the Options, such transactions
may
be deferred until such time as approval of such Governmental Authority is
obtained or is no longer required. Furthermore, TDC and the Grantors will use
their reasonable best efforts to obtain any Governmental Authority approvals
required to permit the Option Holder to consummate the transactions contemplated
by the Options as promptly as reasonably practicable following the exercise
of
the Options by the Option Holder.
8. Covenants. (a) TDC
agrees that, until the expiration of the Option Exercise Period, it shall not
make or solicit any transfer or sale of, or create, incur or assume any
encumbrance or lien with respect to, any share capital of TDC, any Ordinary
Shares held by TDC, any Class A Common Stock of Xxxxxx and Company, Inc.
held by TDC or any other TDC assets.
(b) The
Grantors and Xxxxx Xxxxxx agree that, until the expiration of the Option
Exercise Period, none of them shall make or solicit any transfer or sale of,
or
create, incur or assume any encumbrance or lien with respect to, any of the
Ordinary Shares subject to the Ordinary Shares Option or any capital stock
of
TDC held by them.
(c) Xxxxxx
Xxxxxx agrees that, until the expiration of the Option Exercise Period, he
shall
not make or solicit any transfer or sale of, or create, incur or assume any
encumbrance or lien with respect to, any of the Class B Common Stock of
Xxxxxx and Company, Inc. held by him.
9. Assignment. The
Option Holder may assign this letter agreement or any of its rights and
obligations hereunder to one or more of Affiliates of Sun Pharmaceutical
Industries Ltd. without the consent of TDC, the Grantors and Xxxxx Xxxxxx.
10. Governing
Law. The
governing law of this letter agreement shall be the substantive law of the
State
of New York, without giving effect to rules of conflicts of laws. All actions
and proceedings arising out of or relating to this letter agreement shall be
heard and determined exclusively in any New York state or federal court sitting
in The City of New York.
[Signatures
on following page]
-2-
Sincerely,
TARO
DEVELOPMENT CORPORATION
|
By:
|
/s/ Xxxxxx
Xxxxxx
|
Name:
Xxxxxx Xxxxxx
Title:
President
XXXXXX
XXXXXX
|
By:
|
/s/ Xxxxxx
Xxxxxx
|
XXX
XXXXXX
|
By:
|
/s/ Xxx
Xxxxxx
|
XXX
XXXXX
|
By:
|
/s/ Xxx
Xxxxx
|
XXXXX
XXXXXX
|
By:
|
/s/ Xxxxx
Xxxxxx
|
ACCEPTED
AND AGREED:
ALKALOIDA
CHEMICAL COMPANY EXCLUSIVE GROUP LTD.
|
By:
|
/s/ Xxxxxx
Xxxxx
|
Name:
Xxxxxx Xxxxx
Title:
Director
-3-
