EXHIBIT 10.21
THIRD AMENDMENT TO STOCK PURCHASE AGREEMENT
THIRD AMENDMENT TO STOCK PURCHASE AGREEMENT (the "Amendment"), dated July 28,
1997, between PHARMACEUTICAL RESOURCES, INC., a New Jersey corporation (the
"Company"), and CLAL PHARMACEUTICAL INDUSTRIAL LTD., a corporation formed under
the laws of the State of Israel, (the "Purchaser").
WHEREAS, the Company and the Purchaser entered into a Stock Purchase Agreement,
dated March 25, 1995, as amended pursuant to Amendment No. 1 to Stock Purchase
Agreement, dated May 1, 1995, and Amendment No. 2 to Stock Purchase Agreement
(as amended, the "SPA"); and
WHEREAS, a subsidiary of the Company is acquiring all of the interests in the
Joint Venture (as defined in the SPA) held by a subsidiary of the Purchaser;
WHEREAS, incident to such acquisition, the Company and the Purchaser desire to
amend certain terms of the SPA and the Registration Rights Agreement between the
Company and the Purchaser, dated May 1, 1995, and desire to set forth their
mutual agreements with respect thereto.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants set
forth herein, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
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herein shall have the same meanings as in the SPA.
2. New Shares.
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2.1 The Company shall execute and deliver to the Purchaser a certificate
representing 186,000 shares of Common Stock (the "New Shares") promptly
following approval for listing of the New Shares by The New York Stock
Exchange, provided that, in the event that the Company shall not deliver
the New Shares by the 42nd day following the execution and delivery of this
Amendment, (i) PRI Research, Inc. hereby agrees that principal amount of
the Non-Recourse Secured Promissory Note, dated the date hereof, of PRI
Research, Inc. shall be increased by an amount equal to the product of the
closing price of a share of Common Stock on the trading day prior to the
execution and delivery of this Amendment multiplied by 186,000 and (ii) the
Company's obligation to deliver the New Shares hereunder shall terminate.
The Company shall file an application for the listing of the New Shares
with The New York Stock Exchange promptly following the execution and
deliver of this Amendment. The Purchaser shall pay to the Company the sum
of $1,860 (representing the par value of the New Shares) upon the delivery
of the New Shares to the Purchaser. If the New Shares shall not be
delivered, the other
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agreements executed and delivered by the Company, the Purchaser and their
respective affiliates on the date hereof or contemplated thereby shall
remain in full force and effect, except for the Non-Recourse Secured
Promissory Note which shall be modified as stated herein.
2.2 Simultaneous with the execution and delivery of this Amendment, the
Purchaser shall deliver to the Company the original Warrant and Additional
Warrant (or an affidavit of lost security and indemnification agreement in
the event the original security is misplaced or destroyed). The New Shares
shall be issued, or the principal amount of the Non-Recourse Secured
Promissory Note, dated the date hereof, of PRI Research, Inc. shall be
increased, in exchange for the surrender and cancellation of the Warrant
and the Additional Warrant.
2.3 The Company and the Purchaser hereby agree that references to
"Securities" in the SPA shall also include and refer to the New Shares.
3. Third party transactions.
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3.1 In Section 10 of the SPA the terms "60 days" and "60-day period"
wherever they appear shall be amended to read "30 days" and "30 day
period", respectively.
3.2 It is hereby clarified that a bona fide offer made for more than 10%
of PRI's securities, but which could result by its express terms in the
acquisition of more than 50% of PRI's outstanding voting securities, shall
be deemed a Third Party Transaction for the purposes of Section 10 of the
SPA.
4. Acquisitions and Dispositions of Securities.
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4.1 The first sentence of Section 11.1(a) of the SPA shall be amended in
its entirety as follows:
(a) During the period ("Consent Period") commencing on May 1, 1995 and
terminating six months after the date on which the Purchasers' rights shall
terminate under Section 10.1 hereof, the Purchaser shall not sell, assign,
pledge, transfer or otherwise dispose of (collectively, a "Transfer") any
Securities (as hereinafter defined) without the written consent of the
Company (which may be granted or withheld in its sole discretion) unless
such Securities (i) shall be registered under the Securities Act and
applicable state securities laws, (ii) shall be sold in brokers'
transactions pursuant to Rule 144 promulgated under the Securities Act,
(iii) shall be sold or transferred in connection with a Third Party
Transaction or any other transaction that has been approved by a majority
of the members of the Board (exclusive of those members appointed by the
Purchaser pursuant to Section 7.2 hereof), (iv) shall be sold or
transferred in any transaction which shall comply with the Securities Act
and applicable state securities laws, in accordance with Section 11.1(b)
hereof or, (v) a Transfer of all Securities owned at the time of Transfer
by the Purchaser if the Board has written notice of such Transfer and the
Company's Board of Directors does not reject the transferee, it being
agreed that the company's Board of Directors may
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only reject such transferee (but subject to Section 11.1(c) hereof) if such
entity is asserted in good faith and then demonstrated by the Board (acting
in good faith) to be a competitor or a party with a demonstrated adverse
interest to the Company (the Board to act within 7 U.S. business days of
the Company's receipt of a notice regarding such contemplated Transfer).
4.2 The following shall be inserted as Section 11.1(e) of the SPA:
(e) Notwithstanding the provisions of Section 11.1 hereof, the
Purchaser may Transfer 90% or more of the Common Stock then beneficially
owned by the Purchaser to a bona fide purchaser if the Company's Board of
Directors does not reject the transferee as provided below (a "Permitted
Transfer"); provided, however, that the Purchaser shall not be entitled to
request or consummate a Permitted Transfer if, at the time of the
Purchaser's request to the Company for its consent to the Permitted
Transfer, the Purchaser shall have Transferred more than 290,000 shares of
Common Stock in any 365-day period or shall have Transferred an aggregate
of more than 586,000 shares of Common Stock since May 1, 1995. The
Purchaser will advise the Company of the beneficial owner of the proposed
transferee. The Company's Board of Directors may reject the tranferee if
such entity is asserted in good faith and then demonstrated by the Board
(acting in good faith) to be a competitor or a party with a demonstrated
adverse interest to the Company (the Board to act within 7 U.S. business
days of the Company's receipt of a notice regarding such contemplated
sale).
5. Assignment.
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(a) Section 16.2 of the SPA shall be amended in its entirety as follows:
16.2 Assignment. All terms and provisions of this Agreement shall be
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binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor
any of the rights, interests or obligations hereunder may be assigned by
any party hereto without the prior written consent of the other party;
provided, that, (a) the Purchaser may assign its rights under this
Agreement, in whole or in part, to any subsidiary or related entity "Hevra
Kshura" of the Purchaser, within the meaning of the Israel Securities Act
5728-1968, as amended, so long as such (i) subsidiary or related party
shall assume and agree to be bound by all of the Purchaser's obligations
hereunder and (ii) the Purchaser shall not be relieved of its primary
liability to the Company for all of the Purchaser's obligations set forth
herein and (b) the Purchaser may assign all, but not less than all, of its
rights under this Agreement to any person or entity pursuant to a Permitted
Transfer so long as the transferee thereof shall assume and agree to be
bound by all of the Purchaser's obligations hereunder (a "Permitted
Assignment").
(b) The Company and the Purcahser hereby acknowledge and agree that, for
the purposes of the Rights Agreement, between the Company and Midlantic
Bank, N.A., dated August 6, 1991, as amended, only transferees and
assignees of Purchaser pursuant to Sections 16.2(a) or (b) of the
Agreement, as amended,
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shall constitute "permitted assigns" of Clal Pharmaceutical Industries Ltd.
under Section 1(a)(v) of such Rights Agreement. Purchaser shall inform all
transferees of Securities of this provision.
6. Registration Rights Agreement. Section 8.1 of the Registration Rights
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Agreement shall be amended in its entirety as follows:
8.1 Assignment. All terms and provisions of this Agreement shall be
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binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor
any of the rights, interests or obligations hereunder may be assigned by
any party hereto without the prior written consent of the other party;
provided, that, (a) the Holder may assign this Agreement to any permitted
assignee under Section 16.2(a) of the Stock Purchase Agreement without the
Company's written consent so long as (i) such assignee shall agree to
assume and agree to be bound by all of the Holder's obligations hereunder
and (ii) the Holder shall not be relieved of its primary liability to the
Company for all of the Holder's obligations set forth herein and (b) the
Holder may assign all, but not less than all, of the rights under this
Agreement to a person or entity pursuant to a Permitted Transfer as defined
in the Stock Purchase Agreement so long as such assignee shall agree to
assume and agree to be bound by all of the Holder's obligations hereunder.
The Registration Rights Agreement shall also apply to the New Shares.
This provision shall constitute an amendment of the Registration Rights
Agreement pursuant to Section 8.4 thereof.
7. Representations and Indemnification.
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7.1 Representations. The Company and the Purchaser each hereby represent
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and warrant to the other as follows:
(a) It is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its formation. It has all
requisite corporate power and authority to conduct its business and to
enter into and perform its obligations under this Amendment in accordance
with the terms hereof.
(b) It has taken all required corporate actions to approve and adopt this
Amendment. This Amendment constitutes a duly authorized, valid and binding
agreement on it and enforceable against it in accordance with its terms.
Each person executing this Amendment on its behalf is duly authorized and
empowered to do so.
(c) The execution and delivery of this Amendment and the consummation of
the transactions as contemplated hereunder (i) do not, and will not,
violate or conflict with any statute, regulation, judgment, order, writ,
decree or injunction currently applicable to it or any of its property or
assets; and (ii) do not, and will not, violate or conflict with its charter
or By-laws and/or Memorandum and
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Articles of Association, or any existing mortgage, indenture, contract,
licensing agreement, financing statement or other agreement binding on it.
(d) All required consents and approvals, as well as any approvals or
consents of any governmental authorities or any other third parties in
connection with the execution and delivery of this Amendment or the
performance of the transactions contemplated hereunder, have been obtained
by it, except for such approvals required under New York Stock Exchange
rules. No contract or agreement binding upon it restricts its ability to
fulfill its obligations and responsibilities under this Amendment or to
carry out the activities contemplated herein.
(e) It is not a party to or, to the best of its knowledge, threatened with
any litigation or judicial or administrative proceeding that, if decided
adversely to it, would delay or preclude the consummation of the
transactions contemplated in this Amendment or have a material adverse
effect upon the transactions contemplated hereby.
7.2 Indemnification. The Company and the Purchaser each agree to
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indemnify and hold harmless the other and their respective employees, agents and
affiliates against all losses, liabilities, claims, damages, and expenses
(including, but not limited to, reasonable counsel fees) resulting from or
arising out of any actual or alleged misrepresentation or breach by it of any
representation or warranty set forth in Section 8.1 hereof or otherwise set
forth in this Amendment.
8. Miscellaneous
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8.1 No Further Amendment. Except as amended herein, the terms and
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provisions of the SPA and the Registration Rights Agreement are hereby ratified,
confirmed and approved in all respects.
8.2 Assignment. All terms and provisions of this Amendment shall be
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binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Amendment nor any of the
rights, interest or obligations hereunder may be assigned by any party hereto
without the prior written consent of the other party, other than pursuant to a
Permitted Assignment.
8.3 Entire Agreement. This Amendment and the other agreements referred to
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herein or delivered pursuant hereto contain the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous arrangements or understandings with respect thereto.
8.4 Amendments; Waiver. This Amendment may not be amended or terminated,
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and no provision hereof may be waived, except pursuant to a written instrument
executed by each of the parties hereto.
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8.5 Counterparts. This Amendment may be executed in any number of
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counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
8.6 Headings. The headings of the Sections of this Amendment have been
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inserted for convenience of reference only and shall not be deemed to be a part
of this Amendment.
8.7 Governing Law. This Amendment shall be governed by and construed in
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accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly therein.
8.8 Severability. If any term or provision hereof shall be invalid or
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unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired, (b) any such invalidity or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction and (c) the invalid or unenforceable term or provision shall be
deemed replaced by a term or provision as determined by a court to be valid and
enforceable and to express the intention of the parties with respect to the
invalid or unenforceable term or provision.
8.9 Consent to Jurisdiction. In connection with any dispute which may
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arise under this Amendment or under any other agreement referred to herein, each
of the parties hereby irrevocably submits to, consents to, and waives any
objection to, the jurisdiction of the courts of the State of New York located in
the County of New York or of the United States District Court for the Southern
District of New York, and waives any objection to the laying of venue in such
courts. Each such party admits that any such dispute may be resolved at least as
conveniently in such a court as in any other court, and shall not seek dismissal
or a change of venue on the ground that resolution of such a dispute in any such
court shall not be convenient or in the interests of justice. The Purchaser
hereby appoints Proskauer Rose LLP as its agent upon whom service of process may
be made with the same force and effect as if such service shall have been made
personally upon the Purchaser. The Company hereby appoints Xxxxxxx, Calamari &
Xxxxxxx as its agent upon; whom service of process may be made with the same
force and effect as if such service shall have been made personally upon the
Company.
IN WITNESS WHEREOF, each of the undersigned has caused this Third Amendment to
Stock Purchase Agreement to be executed as of the date first written above.
PHARMACEUTICAL RESOURCES, INC.
By:/s/Xxxxxxx X. Xxxxxx, President
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CLAL PHARMACEUTICAL INDUSTRIES LTD.
By: /s/
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By: /s/
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AGREED AND ACCEPTED AS TO SECTION 2.1 ONLY
PRI - RESEARCH, INC.
By:/s/Xxxxxxx X. Xxxxxx, President
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