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PENTOXIFYLLINE AGREEMENT AMENDMENT
This Agreement Amendment (this "Agreement") is entered into as of
August 9, 1999 by and between Xxxxxx Pharmaceutical, Inc., a Delaware
corporation (the "Company"), and Hoechst Xxxxxx Xxxxxxx, Inc., a Delaware
corporation ("HMRI").
WITNESSETH
WHEREAS, the Company and HMRI entered into an agreement dated January
1, 1997 (the "Pentoxifylline Agreement") whereby HMRI would supply
pentoxifylline to the Company for resale for an agreed profit split; and
WHEREAS, the Company, concurrently with the execution of
this Agreement, is entering into an Agreement and Plan of Merger
(the "Merger Agreement") with Teva Pharmaceuticals USA, Inc.
("Parent") and Caribou Merger Corporation ("Merger Sub"); and
WHEREAS, Parent and Merger Sub, concurrently with the execution of this
Agreement, are entering into a Stockholder Agreement (the "Stockholder
Agreement") with Hoechst Corporation.
NOW, THEREFORE, in consideration of the premises and the covenants and
obligations set forth herein, and as a condition and inducement to Parent's
willingness to enter into the Merger Agreement, the parties hereto agree as
follows:
1. Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Pentoxifylline
Agreement.
2. Until the Offer Closing Date (as defined in the Merger
Agreement), the Company shall conduct its business with
respect to the Products in the ordinary course of
business, including, without limitation, regarding the
Company's marketing and pricing decisions and forecasts
of its Product requirements as required by the
Pentoxifylline Agreement. For avoidance of doubt,
nothing herein shall prevent the Company from
increasing or decreasing such forecasted requirements
to the extent permitted by the Pentoxifylline
Agreement.
3. With respect to any determination of Xxxxxx Net Profit Margin
made on or after the Offer Closing Date, (i) HMRI shall
continue to receive 80% of such Xxxxxx Net Profit Margin,
assuming such Xxxxxx Net Profit Margin is a positive amount,
but in no event shall HMRI be charged with, or otherwise
required to bear, any losses
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if such Xxxxxx Net Profit Margin is a negative amount and (ii)
no such determination shall give effect to any shelf stock
adjustments made after the Offer Closing Date. With respect to
any determination of Xxxxxx Net Profit Margin prior to the
Offer Closing Date, the profit and loss sharing provisions
contained in Section 1.7 of the Pentoxifylline Agreement shall
continue to apply.
4. Every obligation of the Company to purchase Products shall
terminate at the Offer Closing Date, except that
(a) the Company shall be obligated to continue to
purchase the Products, at the price set forth in the
Pentoxifylline Agreement, in a quantity equal to 100%
of the quantity set forth in its last forecast
delivered before the Offer Closing Date, for the
three calendar months following the month in which
the Offer Closing Date occurs; and
(b) the Company shall be obligated to continue to
purchase the Products, at the price set forth in the
Pentoxifylline Agreement, in a quantity equal to 50%
of the quantities set forth in the forecast
referenced above for the fourth, fifth and sixth
calendar months following the month in which the
Offer Closing Date occurs.
5. From and after the Offer Closing Date, HMRI shall not be
obligated to sell Products to the Company except for the
Products the Company is required to purchase pursuant to
Section 4 above.
6. From and after the Offer Closing Date, HMRI shall be
permitted to agree to sell Products to any other party
to the extent such sales would occur after HMRI is
relieved of its obligation to sell Products only to the
Company. From and after the earlier of (i) the
beginning of the fourth calendar month referred to in
Section 4(b) hereof and (ii) the beginning of the first
calendar month in which the Company's forecasted
requirement of Products is 50% or less of such
forecasted requirement for July 1999, HMRI shall be
relieved of its obligation to sell Products only to the
Company and may sell Products to any other party, at
its discretion.
7. If Merger Sub shall not have purchased all Shares (as defined
in the Merger Agreement) tendered pursuant to the Offer (as
defined in the Merger Agreement), then this Agreement shall
terminate and be of no further force or effect, and shall be
null and void in all
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respects, upon the occurrence of a Termination Event (as such
term is defined (excluding clause (i) of such definition) in
the Stockholder Agreement).
8. The Pentoxifylline Agreement shall terminate
automatically at the end of the sixth calendar month
following the month in which the Offer Closing Date
occurs, without regard to Section 11.2 thereof;
provided that following such termination the parties
shall continue to have their respective rights and
obligations thereunder to the extent relating to
Products purchased by the Company prior to such
termination, including HMRI's right to receive 80% of
Xxxxxx Net Profit Margin on such Products; and
provided, further, that provisions in the
Pentoxifylline Agreement expressly intended to survive
termination shall survive as set forth therein.
9. This Agreement shall be governed by the Laws of the State of
Delaware, without giving effect to the principles of conflicts
of law thereof.
10. The provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Company, Parent and HMRI, and
their respective successors and assigns.
11. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
12. Except as amended and modified hereby, the terms and
provisions of the Pentoxifylline Agreement shall continue to
be in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
XXXXXX PHARMACEUTICAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Title: President & CEO
Date: August 9, 1999
HOECHST XXXXXX XXXXXXX, INC.
By: /s/ Xxxxxx Xxxxxx
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Title: Vice President
Date: August 9, 1999
