EXECUTION COPY
PHARMACEUTICAL RESOURCES, INC.
$200,000,000
2.875% Senior Subordinated Convertible Notes due 2010
REGISTRATION RIGHTS AGREEMENT
-----------------------------
September 30, 2003
New York, New York
Pharmaceutical Resources, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the initial purchasers named in the purchase
agreement (the "Initial PURCHASERS"), upon the terms set forth in such purchase
agreement, dated September 25, 2003, (the "PURCHASE AGREEMENT"), $200,000,000
aggregate principal amount of its 2.875% Senior Subordinated Convertible Notes
due 2010 (the "SECURITIES"). The Securities will be convertible into fully paid,
nonassessable shares of Common Stock, par value $0.01 per share, of the Company
(the "COMMON STOCK") on the terms, and subject to the conditions, set forth in
the Indenture (as defined herein).
As a condition to the Initial Purchasers' obligation to purchase the
Securities pursuant to the Purchase Agreement, the Company agrees with the
Initial Purchasers for the benefit of Holders (as defined herein) from time to
time of the Registrable Securities (as defined herein) as follows:
1. DEFINITIONS.
Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Purchase Agreement. As used in this Agreement, the
following defined terms shall have the following meanings:
"ADDITIONAL INTEREST" has the meaning assigned thereto in Section 7(a)
hereof.
"ADDITIONAL SHARES" has the meaning assigned thereto in Section 7(a)
hereof.
"AFFILIATE" has the meaning assigned thereto in Rule 405 under the
Securities Act.
"AGREEMENT" means this Registration Rights Agreement, as amended, modified
or otherwise supplemented from time to time in accordance with the terms hereof.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in the City of New York are
authorized or obligated by law, regulation or executive order to close.
"COMMISSION" means the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.
"COMMON STOCK" has the meaning assigned thereto in the preamble hereto.
"COMPANY" has the meaning assigned thereto in the preamble hereto.
"CONVERSION PRICE" has the meaning assigned thereto in Section 1.1 of the
Indenture.
"EFFECTIVE TIME" means the time at which the Commission declares any
Shelf Registration Statement effective or at which any Shelf Registration
Statement otherwise becomes effective.
"EFFECTIVENESS PERIOD" has the meaning assigned thereto in Section 2(b)(i)
hereof.
"EFFECTIVENESS TARGET DATE" has the meaning assigned thereto in Section
2(a) hereof.
"ELECTION AND QUESTIONNAIRE" means a Notice of Registration Statement and
Selling Securityholder Election and Questionnaire, which shall be substantially
in the form of Appendix A hereto.
"ELECTION HOLDER" has the meaning assigned thereto in Section 3(a)(i)
hereof.
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"HOLDER" means any person who owns, beneficially or otherwise, any
Registrable Security.
"INDENTURE" means the Indenture, dated as of September 30, 2003, between
the Company and American Stock Transfer & Trust Company, as trustee (the
"TRUSTEE"), pursuant to which the Securities are to be issued, and as such
Indenture is amended, modified or supplemented from time to time in accordance
with the terms thereof.
"INITIAL PURCHASERS" has the meaning assigned thereto in the preamble
hereto.
"INTEREST PAYMENT DATE" has the meaning assigned thereto in Section 1.1 of
the Indenture.
"ISSUE DATE" means the first date of original issuance of the Securities.
"MAJORITY OF ELECTION HOLDERS" has the meaning assigned thereto in Section
3(p) hereof.
"MAJORITY OF HOLDERS" means Holders holding more than 50% of the aggregate
principal amount of the Securities outstanding; PROVIDED, that, for purpose of
this definition, a Holder of shares of Common Stock that constitute Registrable
Securities shall be deemed to hold an aggregate principal amount of Securities
(in addition to the principal amount of Securities held by such Holder, if any)
equal to the product of (x) the number of such shares of Common Stock that
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constitute Registrable Securities held by such Holder and (y) the Conversion
Price in effect at the time of such calculation as determined in accordance with
the Indenture.
"PERSON" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"PROSPECTUS" means the prospectus included in any Shelf Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments to such prospectus, including all material incorporated by
reference in such prospectus and all documents filed after the date of such
prospectus by the Company under the Exchange Act and incorporated by reference
therein.
"PURCHASE AGREEMENT" has the meaning assigned thereto in the preamble
hereto.
"REGISTRABLE SECURITIES" means all or any portion of the Securities issued
from time to time under the Indenture and all of the shares of Common Stock
issued upon conversion of such Securities until, in the case of any such
securities, the earliest of:
(x) the date on which such security has been registered under the
Securities Act and disposed of pursuant to an effective registration
statement; PROVIDED that, if such security is a share of Common Stock
issued upon conversion of a Security that has been so registered and
disposed of, the date on which the Security that was converted was
registered and disposed of;
(y) the date on which such security is distributed to the public
pursuant to Rule 144 under the Securities Act or may be sold or
transferred by a person who is not an Affiliate of the Company pursuant to
Rule 144 under the Securities Act (or any other similar provision then in
force) without any volume or manner of sale restrictions thereunder; and
(z) the date on which such securities cease to be outstanding
(whether as a result of repurchase and cancellation, conversion or
otherwise).
"REGISTRATION DEFAULT" has the meaning assigned thereto in Section 7(a)
hereof.
"REGISTRATION DEFAULT PERIOD" has the meaning assigned thereto in Section
7(a) hereof.
"SECURITIES" has the meaning assigned thereto in the preamble hereto.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"SHELF FILING DEADLINE" has the meaning assigned thereto in Section 2(a)
hereof.
"SHELF REGISTRATION" means a registration effected pursuant to Section 2
hereof.
"SHELF REGISTRATION STATEMENT" means a registration statement filed (i)
under the Securities Act providing for the registration of, and the sale on a
continuous or delayed basis pursuant to Rule 415 under the Securities Act and/or
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any similar rule that may be adopted by the Commission, by the Holders of, all
of the Registrable Securities for which Holders have properly completed,
executed and delivered to the Company an Election and Questionnaire and (ii) by
the Company pursuant to the provisions of Section 2 hereof, including the
Prospectus contained therein, any amendments and supplements to such
registration statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in such registration statement, and
any additional registration statements filed under the Securities Act to permit
the registration and sale of Registrable Securities pursuant to Section 3(a)(ii)
hereof.
"SUSPENSION PERIOD" has the meaning assigned thereto in Section 2(c)
hereof.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended,
or any successor thereto, and the rules, regulations and forms of the Commission
promulgated thereunder, as in effect on the date the Indenture is qualified
thereunder.
"UNDERWRITING MAJORITY" means on any date, Holders holding at least 66
2/3% of the aggregate principal amount of the Securities outstanding on such
date; PROVIDED, that for the purpose of this definition, a holder of shares of
Common Stock that constitute Registrable Securities when issued upon conversion
of Securities shall be deemed to hold an aggregate principal amount of
Securities (in addition to the principal amount of Securities held by such
Holder, if any) equal to the product of (x) the number of such shares of Common
Stock that are Registrable Securities held by such Holder and (y) the Conversion
Price in effect at the time of such calculation as determined in accordance with
the Indenture.
"UNDERWRITTEN OFFERING" means an offering in which securities of the
Company are sold to one or more underwriters for reoffering to the public.
2 SHELF REGISTRATION.
(a) The Company shall, no later than 90 calendar days following the
Issue Date (the "SHELF FILING DEADLINE"), file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable
Securities by the Holders from time to time in accordance with the methods of
distribution elected by such Holders and, thereafter, shall use its reasonable
best efforts to cause such initial Shelf Registration Statement to be declared
effective under the Securities Act no later than 180 calendar days following the
Issue Date (the "EFFECTIVENESS TARGET DATE"); PROVIDED, HOWEVER, that no Holder
shall be entitled to be named as a selling securityholder in any Shelf
Registration Statement as of the date it is declared effective or to use the
Prospectus forming a part thereof for offers and resales of Registrable
Securities unless such Holder is an Election Holder.
(b) Subject to Section 2(c) hereof, the Company shall use its reasonable
best efforts:
(i) to keep any Shelf Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 3(j)
hereof, in order to permit the Prospectus forming a part thereof to be
usable by Holders until the earlier of: (1) two years from the last date
of original issuance of any Securities or (2) such shorter period ending
on the date that (x) all of the Holders of Registrable Securities are able
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to sell all Registrable Securities immediately without restriction
pursuant to Rule 144(k) under the Securities Act or any successor rule
thereto, (y) all Registrable Securities registered under the Shelf
Registration Statements have been sold or (z) all Registrable Securities
have ceased to be outstanding (such period being referred to herein as the
"EFFECTIVENESS PERIOD"); and
(ii) after the Effective Time of the initial Shelf Registration
Statement, after the receipt of a properly completed and signed Election
and Questionnaire from any Holder of Registrable Securities that is not
then an Election Holder, to take the actions provided for in Section
3(a)(ii) hereof.
(c) After the Effective Time of the initial Shelf Registration
Statement, the Company may suspend the use of any Prospectus by written notice
to the Election Holders for a period or periods not to exceed an aggregate of 45
calendar days in any 90-calendar day period (each such period, a "SUSPENSION
PERIOD") if:
(i) an event has occurred and is continuing as a result of which the
Shelf Registration Statement would, in the Company's judgment, contain 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; and
(ii) the Company determines in good faith that the disclosure of
such event at such time would have a material adverse effect on the
Company and its subsidiaries taken as a whole;
PROVIDED, that in the event the disclosure relates to a proposed or pending
material business transaction that is previously not disclosed publicly, the
disclosure of which would impede the Company's ability to consummate such
transaction, the Company may extend a Suspension Period from 45 calendar days to
60 calendar days; PROVIDED, HOWEVER, that Suspension Periods (including, without
limitation, any such extension of a Suspension Period) shall not exceed an
aggregate of 90 calendar days in any 360-calendar day period.
3 REGISTRATION PROCEDURES.
In connection with the Shelf Registration Statements, the following
provisions shall apply:
(a) (i) Not less than 30 calendar days prior to the intended
Effective Time of the initial Shelf Registration Statement, the Company
shall distribute the Election and Questionnaire to the Holders of
Registrable Securities. The Company shall take action to name as a selling
securityholder in the initial Shelf Registration Statement at the time of
its effectiveness each Holder that properly completes, executes and
delivers an Election and Questionnaire to the Company at the address set
forth in the Election and Questionnaire (an "ELECTION HOLDER") prior to or
on the 20th calendar day after such Xxxxxx's receipt thereof so that such
Holder is permitted to deliver the Prospectus forming a part thereof as of
such time to purchasers of such Holder's Registrable Securities in
accordance with applicable law. The Company shall not be required to take
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any action to name any Holder as a selling securityholder in the initial
Shelf Registration Statement at the time of its effectiveness or to enable
any Holder to use the Prospectus forming a part thereof for resales of
Registrable Securities unless such Xxxxxx has returned a properly
completed and signed Election and Questionnaire to the Company in a timely
manner.
(ii) After the Effective Time of the initial Shelf Registration
Statement, the Company shall, upon the written request of any Holder of
Registrable Securities that is not then an Election Holder, promptly send
an Election and Questionnaire to such Holder. After the Effective Time of
the initial Shelf Registration Statement, the Company shall (A) after the
date that a completed and signed Election and Questionnaire is delivered
to the Company, prepare and file with the Commission (x) a supplement to
the Prospectus as promptly as practicable or, if required by applicable
law, a post-effective amendment to the Shelf Registration Statement or an
additional Shelf Registration Statement as promptly as practicable after
the end of each fiscal quarter and (y) any other document required by
applicable law, so that the Holder delivering such Election and
Questionnaire is named as a selling securityholder in a Shelf Registration
Statement and is permitted to deliver the Prospectus to purchasers of such
Holder's Registrable Securities in accordance with applicable law, and (B)
if the Company shall file a post-effective amendment to the Shelf
Registration Statement, or an additional Shelf Registration Statement, use
its reasonable best efforts to cause such post-effective amendment or such
additional Shelf Registration Statement to become effective under the
Securities Act as promptly as is practicable; PROVIDED, HOWEVER, that if
an Election and Questionnaire is delivered to the Company during a
Suspension Period, the Company shall not be obligated to take the actions
set forth in this clause (ii) until the termination of such Suspension
Period.
(b) Before filing any Shelf Registration Statement or Prospectus or any
amendments or supplements (other than supplements solely for the purpose of
naming one or more Election Holders as selling securityholders) thereto with the
Commission, furnish to the Initial Purchasers copies of all such documents
proposed to be filed and use reasonable best efforts to reflect in each such
document when so filed with the Commission such comments as the Initial
Purchasers reasonably shall propose within five Business Days of the delivery of
such copies to the Initial Purchasers.
(c) The Company shall promptly take such action as may be necessary so
that (i) each of the Shelf Registration Statements and any amendment thereto and
the Prospectus forming a part thereof and any amendment or supplement thereto
(and each report or other document incorporated therein by reference in each
case) complies in all material respects with the Securities Act and the Exchange
Act, as in effect at any relevant time, (ii) each of the Shelf Registration
Statements and any amendment thereto does not, when it becomes effective,
contain 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, and (iii) each of the Prospectus forming a part of any Shelf
Registration Statement, and any amendment or supplement to such Prospectus, in
the form delivered to purchasers of the Registrable Securities during the
Effectiveness Period does not include an untrue statement of a material fact or
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omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(d) The Company shall promptly give written notice to, in the case of
clauses (i) and (ii) below, the Initial Purchasers, and, in the case of clause
(ii) and the remaining clauses below, each Election Holder (which written notice
pursuant to clauses (iv)-(vii) hereof shall be accompanied by an instruction to
such Election Holders to suspend the use of the Prospectus until the requisite
changes have been made, which written notice need not specify the nature of the
event giving rise to such suspension):
(i) when the initial Shelf Registration Statement has been filed
with the Commission;
(ii) when the initial Shelf Registration Statement has become
effective;
(iii) when any Prospectus supplement, Shelf Registration Statement
or post-effective amendment to a Shelf Registration Statement has been
filed with the Commission and, with respect to a Shelf Registration
Statement or any post-effective amendment, when the same has been declared
effective by the Commission;
(iv) of any request by the Commission for amendments or supplements
to any Shelf Registration Statement or the Prospectus included therein or
for additional information;
(v) of the issuance by the Commission of any stop order suspending
the effectiveness of any Shelf Registration Statement under the Securities
Act or the initiation of any proceedings for such purpose;
(vi) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the securities included in any
Shelf Registration Statement for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(vii) of the happening of any event or the existence of any state of
facts that requires the making of any changes in any Shelf Registration
Statement or the Prospectus included therein so that, as of such date,
such Shelf Registration Statement and Prospectus do not contain an untrue
statement of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein
(in the case of the Prospectus, in light of the circumstances under which
they were made) not misleading.
(e) The Company shall use its reasonable best efforts to prevent the
issuance, and, if issued, to obtain the withdrawal at the earliest possible
time, of any order suspending the effectiveness of any Shelf Registration
Statement.
(f) As promptly as reasonably practicable furnish to the Initial
Purchasers and to each Election Holder, upon their written request and without
charge, at least one conformed copy of the applicable Shelf Registration
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Statement and any post-effective amendment thereto, including financial
statements and schedules but excluding all documents incorporated or deemed to
be incorporated therein by reference and all exhibits (unless requested in
writing to the Company by the Initial Purchasers or such Election Holder, as the
case may be).
(g) The Company shall, during the Effectiveness Period, deliver to each
Election Holder, without charge, as many copies of each Prospectus in which the
Election Holder is listed as a selling securityholder included in the applicable
Shelf Registration Statement and any amendment or supplement thereto as such
Election Holder may reasonably request; and the Company consents (except during
a Suspension Period or during the continuance of any event or any other state of
facts described in Section 3(d)(iv)-(vii) above) to the use of the Prospectus
and any amendment or supplement thereto by each of the Election Holders in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus and any amendment or supplement thereto during the Effectiveness
Period.
(h) Prior to any offering of Registrable Securities pursuant to a Shelf
Registration Statement, the Company shall:
(i) register or qualify or cooperate with the Election Holders or
underwriter, if any, and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and
sale under the securities or "blue sky" laws of such jurisdictions within
the United States as any Election Holder may reasonably request;
(ii) keep such registrations or qualifications in effect and comply
with such laws so as to permit the continuance of offers and sales in such
jurisdictions for so long as may be necessary to enable any Election
Holder or underwriter, if any, to complete its distribution of Registrable
Securities pursuant to such Shelf Registration Statement; and
(iii) take any and all other actions necessary or reasonably
advisable to enable the offer and sale in such jurisdictions of such
Registrable Securities;
PROVIDED, HOWEVER, that in no event shall the Company be obligated to (A)
register or qualify as a foreign corporation or as a dealer of securities in any
jurisdiction where it would not otherwise be required to so qualify but for this
Section 3(h) or (B) subject itself to general or unlimited service of process or
to taxation in any such jurisdiction if (or to the extent) it is not now so
subject.
(i) Unless the Registrable Securities shall be in book-entry only form,
the Company shall cooperate with the Election Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to any Shelf Registration Statement, which certificates, if so
required by any securities market or exchange upon which any Registrable
Securities are listed or quoted, shall be penned, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders, and
which certificates shall be free of any restrictive legends and in such
permitted denominations and registered in such names as Election Holders may
request in connection with the sale of Registrable Securities pursuant to such
Shelf Registration Statement.
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(j) During the Effectiveness Period, upon the occurrence of any fact or
event contemplated by Sections 3(d)(iv)-(vii) above, subject to Section 2(c)
hereof, the Company shall promptly, but in any event within five Business Days
following such occurrence, prepare, file and, in the case of a post-effective
amendment, have declared effective a post-effective amendment to any Shelf
Registration Statement, a supplement to the related Prospectus included therein
or a report with the Commission pursuant to Section 13(a), 13(c) or 14 of the
Exchange Act so that, as thereafter delivered to Election Holders or purchasers
of the Registrable Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and will otherwise be effective and usable for resale
of Registrable Securities during the Effectiveness Period. If the Company
notifies the Election Holders of the occurrence of any fact or event
contemplated by Section 3(d)(iv)-(vii) above, the Election Holders shall
immediately suspend the use of the Prospectus until the requisite changes to the
Prospectus have been made.
(k) Not later than the Effective Time of a Shelf Registration Statement,
the Company shall obtain a CUSIP number for the Securities to be sold pursuant
to a Shelf Registration Statement, and provide the Trustee with printed
certificates for the Securities in a form eligible for deposit with The
Depository Trust Company.
(l) The Company shall make generally available to its securityholders
earnings statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month period (or
90 days after the end of any 12-month period if such period is a fiscal year),
or such shorter period as required by the Securities Act and the Exchange Act,
as in effect at any relevant time, commencing on the first day of the first
fiscal quarter of the Company commencing after (i) the Effective Time of a Shelf
Registration Statement, (ii) the effective date of each post-effective amendment
to such Shelf Registration Statement, or (iii) the date of each filing by the
Company with the Commission of an Annual Report on Form 10-K that is
incorporated by reference in such Shelf Registration Statement, which statements
shall cover such 12-month periods.
(m) Not later than the Effective Time of the initial Shelf Registration
Statement, the Company shall cause the Indenture to be qualified under the Trust
Indenture Act; in connection with such qualification, the Company shall
cooperate with the Trustee and the Holders (as defined in the Indenture) of the
Securities to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the Trust Indenture
Act; and the Company shall execute, and shall use its reasonable best efforts to
cause the Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner. In
the event that any such amendment or modification referred to in this Section
3(m) involves the appointment of a new trustee under the Indenture, the Company
shall appoint a new trustee thereunder pursuant to the applicable provisions of
the Indenture.
(n) The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement) and take all such other actions, if any,
reasonably requested in connection therewith in order to expedite or facilitate
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disposition of such Registrable Securities, including, without limitation, in
connection with the effectiveness of the initial Shelf Registration Statement,
furnishing to:
(i) each Election Holder, a certificate, dated the date of the
Effectiveness Time of the initial Shelf Registration Statement, signed by
(x) the Chief Executive Officer or Executive Vice President and (y) the
Chief Financial Officer of the Company confirming, as of the date thereof,
such matters as such Election Holders may reasonably request in writing;
and
(ii) the Board of Directors, customary comfort letter(s), dated the
date of the Effectiveness Time of the initial Shelf Registration
Statement, from the Company's independent accountants and from any other
accountants whose report is contained or incorporated by reference in such
Shelf Registration Statement, in the customary form and covering matters
of the type customarily covered in comfort letters to underwriters in
connection with primary underwritten offerings of securities.
(o) If an underwriting agreement is entered into and the offering is an
Underwritten Offering, the Company shall:
(i) upon request, furnish to each underwriter, in such substance and
scope as they may reasonably request and as are customarily made by
issuers to underwriters in primary underwritten offerings, upon the date
of closing of any sale of Registrable Securities in an Underwritten
Offering:
(A) a certificate, dated the date of such closing, signed by
(x) the Chief Executive Officer or Executive Vice President and (y)
the Chief Financial Officer of the Company confirming, as of the
date thereof, such matters as such parties may reasonably request;
(B) opinions, each dated the date of such closing, of counsel
to the Company covering such matters as are customarily covered in
legal opinions to underwriters in connection with primary
underwritten offerings of securities; and
(C) customary comfort letter(s), dated the date of such
closing, from the Company's independent accountants and from any
other accountants whose report is contained or incorporated by
reference in the Shelf Registration Statement, in the customary form
and covering matters of the type customarily covered in comfort
letters to underwriters in connection with primary underwritten
offerings of securities;
(ii) set forth in full in the underwriting agreement, if any,
customary indemnification provisions and procedures; and
(iii) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause
(i) above and with any customary conditions contained in the underwriting
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agreement or other agreement entered into by the Election Holders pursuant
to this Section 3(o).
(p) The Company shall make (i) reasonably available for inspection by one
or more representatives of the selling Holders, designated in writing by a
Majority of Holders whose Registrable Securities are included in a Shelf
Registration Statement (the "MAJORITY OF ELECTION HOLDERS"), any underwriter
participating in any disposition pursuant to any Shelf Registration Statement,
and any attorney, accountant or other agent retained by such Election Holders or
any such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and (ii)
cause the Company's officers, directors, employees and auditors to supply all
relevant information reasonably requested by such Majority of Election Holders
or any such underwriter, attorney, accountant or other agent in connection with
such Shelf Registration Statement, in each case, as is reasonably necessary to
enable such persons to conduct a reasonable investigation within the meaning of
Section 11 of the Securities Act; PROVIDED, HOWEVER, that such persons shall, at
the Company's request, first agree in writing with the Company that any
information that is reasonably and in good faith designated by the Company in
writing as confidential at the time of delivery of such information shall be
kept confidential by such persons and shall be used solely for the purposes of
exercising rights under this Agreement, unless such disclosure is required by
law (including, without limitation, in connection with the disposition of
Registrable Securities pursuant to a Shelf Registration Statement) or is made in
connection with a court proceeding, or such records, information or documents
become available to the public generally or lawfully through a third party
without an accompanying obligation of confidentiality; and PROVIDED, FURTHER,
that, if the foregoing inspection and information gathering would otherwise
disrupt the Company's conduct of its business, such inspection and information
gathering shall, to the greatest extent possible, be coordinated on behalf of
the Election Holders and the other parties entitled thereto by one counsel
designated by such Majority of Election Holders and on behalf of the Election
Holders and the other parties.
(q) If requested by the underwriters in an Underwritten Offering, make
appropriate officers of the Company reasonably available to the underwriters for
meetings with prospective purchasers of the Registrable Securities and prepare
and present to potential investors customary "road show" material in a manner
consistent with other new issuances of other securities similar to the
Registrable Securities.
(r) The Company will use its reasonable best efforts to cause the Common
Stock issuable upon conversion of the Securities to be listed on the New York
Stock Exchange or listed or quoted on the other market or stock exchange on
which the Common Stock primarily trades on or prior to the Effective Time of
each Shelf Registration Statement hereunder.
(s) The Company will cooperate and assist in any filings or by taking any
other actions required to be made or taken with or by National Association of
Securities Dealers, Inc.
(t) The Company will use its reasonable best efforts to take all other
steps necessary to effect the registration, offering and sale of the Registrable
Securities covered by each Shelf Registration Statement contemplated hereby.
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4. REGISTRATION EXPENSES.
The Company shall bear all fees and expenses incurred in connection with
the performance by the Company of its obligations under Sections 2 and 3 of this
Agreement, whether or not any Shelf Registration Statement is declared
effective. Such fees and expenses shall include, without limitation:
(i) all registration and filing fees and expenses (including,
without limitation, fees and expenses (x) with respect to filings required
to be made with the National Association of Securities Dealers, Inc. and
(y) of compliance with federal and state securities or Blue Sky laws to
the extent such filings or compliance are required pursuant to this
Agreement (including, without limitation, reasonable fees and
disbursements of the counsel specified in the next sentence in connection
with Blue Sky qualifications or exemptions of the Registrable Securities
under the laws of such jurisdictions as the Majority of Election Holders
may designate));
(ii) all expenses of printing (including, without limitation,
expenses of printing certificates for Registrable Securities in a form
eligible for deposit with The Depository Trust Company), duplication
relating to copies of any Shelf Registration Statement or Prospectus
delivered to any Holders hereunder, messenger and delivery services and
telephone;
(iii) all fees and expenses incurred in connection with the listing
of the Common Stock issuable upon conversion of the Securities on any
securities exchange on which similar securities of the Company are then
listed;
(iv) all fees and disbursements of counsel for the Company;
(v) all fees and disbursements of independent certified public
accounts or auditors of the Company (including the expenses of any special
audit and comfort letters required by or incident to such performance);
and
(vi) all reasonable fees and disbursements of the Trustee and its
counsel and of the registrar and transfer agent for the Common Stock.
In addition, the Company shall bear or reimburse the Election Holders for
the reasonable fees and disbursements of one counsel (up to $50,000) for the
Holders, which shall initially be counsel to the Initial Purchasers, but which
may, upon the written consent of the Company (which shall not be unreasonably
withheld), be another nationally recognized law firm experienced in securities
law matters designated by the Initial Purchasers; PROVIDED, that the $50,000
maximum on fees and disbursements of counsel shall not apply in the event of an
Underwritten Offering. The selling commissions shall be borne by the selling
Election Holders.
In addition, the Company shall pay the internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses of any person, including special experts,
retained by the Company.
12
5. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and hold
harmless each Holder, such Holder's officers, directors, partners and employees
and each person, if any, who controls such Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and expenses whatsoever as incurred
(including, but not limited to, reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim made whatsoever,
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities, expenses (or actions in respect thereof) arise out of, or are based
upon:
(i) any untrue statement or alleged untrue statement of a material
fact contained in the Shelf Registration Statement or any amendment
thereto or any related preliminary prospectus or the Prospectus or any
amendment thereto of supplement thereof; or
(ii) the omission or alleged omission to state in the Shelf
Registration Statement or any amendment thereto or any related preliminary
prospectus or the Prospectus or any amendment thereto of supplement
thereof any material fact required to be stated therein or necessary to
make the statements therein (in the case of any related preliminary
prospectus or the Prospectus, in light of the circumstances under which
they were made) not misleading;
PROVIDED, HOWEVER, that the Company shall not be liable to any such indemnified
party in any such case to the extent, but only to the extent, that any such
loss, claim, damage, liability or expense arises out of, or is based upon, any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such indemnified party
expressly for use therein; and PROVIDED, FURTHER, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Holder who failed to deliver a Prospectus (as then amended or
supplemented, provided by the Company to the Holders in the requisite quantity
and on a timely basis to permit proper delivery on or prior to resale) to the
person asserting any loss, claim, damage, liability or expense caused by the
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured,
as determined by a court of competent jurisdiction in a decision not subject to
further appeal, in such Prospectus and such Prospectus was required by law to be
delivered at or prior to the written confirmation of the resale of such
Securities to such person. The foregoing indemnity agreement is in addition to
any liability that the Company may otherwise have to any indemnified party. The
Company also shall indemnify underwriters, their directors and officers and each
person who controls such underwriters within the meaning of the Securities Act
13
or Exchange Act substantially to the same extent as provided above with respect
to the indemnification of Holders if requested by such Holders.
(b) INDEMNIFICATION BY THE HOLDERS. Each Holder, severally and not
jointly, shall indemnify and hold harmless the Company, its officers, directors
and employees and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and expenses
whatsoever as incurred (including, but not limited to, reasonable attorneys'
fees and any and all reasonable expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim made whatsoever, and any and all amounts paid in settlement of any claim
or litigation), joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or action in respect thereof)
arise out of, or are based upon:
(i) any untrue statement or alleged untrue statement of a material
fact contained in the Shelf Registration Statement or any amendment
thereto or any related preliminary prospectus or the Prospectus or any
amendment thereto of supplement thereof; or
(ii) the omission or alleged omission to state in the Shelf
Registration Statement or any amendment thereto or any related preliminary
prospectus or the Prospectus or any amendment thereto of supplement
thereof any material fact required to be stated therein or necessary to
make the statements therein (in the case of any related preliminary
prospectus or the Prospectus, in light of the circumstances under which
they were made) not misleading,
in each case to the extent, but only to the extent, that any such loss, claim,
damage, liability or expense arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made therein was
made in reliance upon and in conformity with written information pertaining to
such Holder and furnished to the Company by or on behalf of such Holder
expressly for use therein. The foregoing indemnity agreement is in addition to
any liability that any Holder may otherwise have to any indemnified party.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of any claim or the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the claim or the commencement of that action;
PROVIDED, HOWEVER, that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have under this Section 5, except to
the extent, but only to the extent, that it has been materially prejudiced
(including the forfeiture of important rights and defenses). If any such claim
or action is brought against any indemnified party, and it notifies the
indemnifying party thereof, the indemnifying party will be entitled to
participate, at its own expense in the defense of such action, and to the extent
it may elect by written notice delivered to such indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party;
14
PROVIDED, HOWEVER, that counsel to the indemnifying party shall not (except with
the written consent of the indemnified party) also be counsel to the indemnified
party. Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel (but, in any case, only one
counsel for all indemnified parties) in any such case, but the fees and expenses
of such counsel shall be at the expense of such indemnified party or parties
unless:
(i) the employment of such counsel has been authorized in writing by
the indemnifying party;
(ii) such indemnifying party shall not have employed counsel to take
charge of the defense of such action within a reasonable time after
written notice thereof;
(iii) the indemnifying party does not diligently defend the action
after assumption of the defense; or
(iv) such indemnified party shall have reasonably concluded that the
representation of such indemnified party by the same counsel representing
the indemnifying party would be inappropriate under applicable standards
of professional conduct due to actual or potential differing interests
between them or where there may be one or more defenses reasonably
available to them that are different from, additional to or in conflict
with those available to the indemnifying party, and in any such event the
fees and expenses of such separate counsel shall be paid by the
indemnifying party as incurred.
The indemnified parties agree that if there are multiple claims against an
indemnifying party that are substantially similar, such parties shall, to the
extent practicable, consolidate such claims into one legal proceeding. No
indemnifying party shall, without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld or delayed), effect
any settlement or compromise of, or consent to the entry of judgment with
respect to, any pending or threatened claim, investigation, action or proceeding
in respect of which indemnity or contribution may be or could have been sought
by an indemnified party under this Section 5 (whether or not the indemnified
party or parties are actual or potential parties thereto) unless (x) such
settlement, compromise or judgment (i) includes an unconditional release of such
indemnified party from all liability arising out of such claim, action, suit or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or any unlawful failure to act by or on behalf of such indemnified
party and (y) the indemnifying party confirms in writing its indemnification
obligations hereunder with respect to such settlement, compromise or judgment.
(d) CONTRIBUTION. If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in subsection (a) or (b)
above:
15
(i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties, on the one hand,
and the indemnified party, on the other hand, from the registration and
sale of the Registrable Securities pursuant to the Shelf Registration; or
(ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the indemnifying party or parties on the one
hand and the indemnified party on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable
considerations.
The relative benefits received by the Company, on the one hand, and a Holder, on
the other hand, shall be deemed to be in the same proportion as (i) the total
net proceeds from the offering of the Securities purchased under the Purchase
Agreement (before deducting expenses) received by the Company bear to (ii) the
excess of the gross proceeds received by such Holder with respect to its resale
of Registrable Securities over the price paid by such Holder in its purchase of
such Registrable Securities. The relative fault of the Company, on the one hand,
and of a Holder, on the other hand, shall be determined by reference to, among
other things, whether the 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 such Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Holders agree that it would not
be just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above. The
aggregate amount paid as a result of the losses, claims, damages, liabilities or
expenses incurred by an indemnified party and referred to in the first sentence
of this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing or defending against any action or claim which is the subject of this
subsection (d). Notwithstanding any other provision of this Section 5(d), (i) in
no case shall any Holder be required to contribute any amount in excess of the
amount by which the gross proceeds received by such Holder from its sale of
Registrable Securities pursuant to the Shelf Registration Statement exceeds the
amount of damages that such Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission and
(ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 5(d), each person, if any, who controls a Holder within the meaning
of the Securities Act or the Exchange Act shall have the same rights to
contribution as such Holder and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as the Company. The Holders' respective obligations to
contribute pursuant to this Section 5 are several in proportion to the
respective amount of Registrable Securities they have sold pursuant to a
Registration Statement and not joint. The remedies provided for in this Section
5 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any indemnified party at law or in equity.
16
(e) The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, or (ii) any investigation made by or on behalf of
any indemnified party.
6. HOLDER'S OBLIGATIONS.
Each Holder agrees, by acquisition of the Registrable Securities, that no
Holder of Registrable Securities shall be entitled to sell any of such
Registrable Securities pursuant to a Shelf Registration Statement or to receive
a Prospectus relating thereto, unless such Holder has furnished the Company with
a properly completed and signed Election and Questionnaire (including the
information required to be included in such Election and Questionnaire) and the
information set forth in the next sentence. Each Election Xxxxxx agrees promptly
to furnish to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Election Holder
correct and not misleading and any other information regarding such Election
Holder and the distribution of such Registrable Securities as the Company may
from time to time reasonably request. Any sale of any Registrable Securities by
any Election Holder shall constitute a representation and warranty by such
Election Holder that (x) the information relating to such Election Holder and
its plan of distribution is as set forth in the Prospectus delivered by such
Election Holder in connection with such disposition, (y) such Prospectus does
not as of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Election Holder or its plan of distribution and
(z) such Prospectus does not as of the time of such sale omit to state any
material fact relating to or provided by such Election Holder or its plan of
distribution necessary in order to make the statements in such Prospectus, in
light of the circumstances under which they were made, not misleading.
7. ADDITIONAL INTEREST.
(a) If:
(i) on or prior to the Shelf Filing Deadline, a Shelf Registration
Statement has not been filed with the Commission;
(ii) on or prior to the Effectiveness Target Date, the initial Shelf
Registration Statement has not been declared effective by the Commission
(and include, without limitation, any information with respect to an
Election Holder that has properly completed, executed and delivered an
Election and Questionnaire prior to or on the 20th calendar day after such
Xxxxxx's receipt thereof that is required so that such Holder is named as
a selling securityholder in the initial Shelf Registration Statement and
is permitted to deliver the Prospectus forming a part thereof to
purchasers of such Holder's Registrable Securities);
(iii) after the Effective Time of any Shelf Registration Statement,
such Shelf Registration Statement ceases to be effective or usable for the
offer and sale of Registrable Securities (other than due to a Suspension
Period), and the Company fails to file and, in the case of a
post-effective amendment, have declared effective, within five Business
Days, a post-effective amendment to such Shelf Registration Statement, a
17
supplement to the Prospectus contained therein or a report with the
Commission pursuant to Section 13(a), 13(c) or 14 of the Exchange Act to
make such Shelf Registration Statement effective or such Prospectus
usable;
(iv) prior to or on the 45th calendar day or 60th calendar day, as
the case may be, of any Suspension Period, such suspension has not been
terminated, or Suspension Periods exceed an aggregate of 90 calendar days
in any 360-calendar day period; or
(v) the Company shall have failed to timely comply with any of its
obligations set forth in Section 3(a)(ii) hereof
(each such event referred to in clauses (i) through (v), a "REGISTRATION
DEFAULT"), the Company shall be required to pay additional interest ("ADDITIONAL
INTEREST"), from and including the day following such Registration Default to
but excluding the earlier of (x) the day on which such Registration Default is
cured or (y) the date the Shelf Registration Statement is no longer required to
be kept effective (the "REGISTRATION DEFAULT PERIOD"), at a rate per annum equal
to an additional one-quarter of one percent (0.25%) of the principal amount of
the Registrable Securities that are Securities to and including the 90th
calendar day following such Registration Default, and one-half of one percent
(0.5%) thereof from and after the 91st calendar day following such Registration
Default. In the event any Registrable Securities that are Securities are
converted into Common Stock during a Registration Default Period, in lieu of
Additional Interest, the Company will deliver to the each Holder converting
during the Registration Default Period 103% of the number of shares of Common
Stock the Holder would have otherwise received upon conversion ("Additional
SHARES").
(b) Any amounts to be paid as Additional Interest pursuant to Section 7(a)
hereof shall be paid in cash semi-annually in arrears, with the first
semi-annual payment due on the first Interest Payment Date following the date on
which such Additional Interest began to accrue, to the Holders in whose name the
Securities are registered at the close of business on March 30 or September 30,
whether or not a Business Day, immediately preceding the relevant Interest
Payment Date.
(c) Except as provided in Section 10(a) hereof, the Additional Interest or
Additional Shares, as the case may be, as set forth in this Section 7 shall be
the exclusive remedy available to the Holders of Registrable Securities for any
Registration Default. In no event shall the Company be required to pay
Additional Interest in excess of a rate per annum equal to one-quarter of one
percent (0.25%) of the principal amount of the Registrable Securities that are
Securities to and including the 90th calendar day following such Registration
Default, and a rate per annum equal to one-half of one percent (0.5%) thereof
from and after the 91st calendar day following such Registration Default, as set
forth in Section 7(a), regardless of whether one or multiple Registration
Defaults exist. All obligations of the Company set forth in this Section 7 that
are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such Registrable Security shall have been
satisfied in full. Each Registration Default will constitute a Registration
Default whatever the reason for any such event and whether it is voluntary or
18
involuntary or is beyond the control of the Company or pursuant to operation of
law or as a result of any action or inaction by the Commission.
8. RULE 144A.
In the event the Company is not subject to Section 13 or 15(d) of the
Exchange Act, the Company hereby agrees with each Holder, for so long as any
Registrable Securities remain outstanding, to make available to any Holder in
connection with any sale thereof and any prospective purchaser of such
Registrable Securities from such Holder, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Securities pursuant to Rule 144A.
9. UNDERWRITTEN OFFERINGS.
(a) An Underwriting Majority may, by written notice to the Company, sell
its Registrable Securities in an Underwritten Offering pursuant to any Shelf
Registration Statement.
(b) No Holder may participate in any Underwritten Offering hereunder
unless such Xxxxxx:
(i) agrees to sell such Xxxxxx's Registrable Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements; and
(ii) completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such underwriting arrangements.
(c) In any such Underwritten Offering, the investment banker or investment
bankers and manager or managers that will administer the offering will be
selected by a Majority of Holders to be included in such Underwriting Offering;
PROVIDED, that such investment bankers and managers must be reasonably
satisfactory to the Company.
10. MISCELLANEOUS.
(a) SPECIFIC PERFORMANCE. The parties hereto acknowledge that there would
be no adequate remedy at law if the Company fails to perform its obligations
hereunder and that the Initial Purchasers and the Holders from time to time may
be irreparably harmed by any such failure, and accordingly agree that the
Initial Purchasers and such Holders, in addition to any other remedy to which
they may be entitled at law or in equity and without limiting the remedies
available to the Election Holders under Section 7 hereof, shall be entitled to
compel specific performance of the obligations of the Company under this
Agreement in accordance with the terms and conditions of this Agreement, in any
court of the United States or any State thereof having jurisdiction.
(b) AMENDMENTS AND WAIVERS. Except as provided in the next two sentences,
this Agreement, including this Section 10(b), may be amended, modified or
supplemented and waivers or consents to departures from the provisions hereof
may be given, only by a written instrument duly executed by the Company and a
19
Majority of Holders. In the event of a merger or consolidation or sale,
assignment, conveyance, transfer, lease or other disposition of all of
substantially all of the properties and assets of the Company and its
Subsidiaries on a consolidated basis, the Company shall procure the assumption
of its obligations under this Agreement by the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or the
Person who acquires by sale, assignment, conveyance, transfer, lease or other
disposition all or substantially all of the properties and assets of the Company
and its Subsidiaries on a consolidated basis and this Agreement may be amended,
modified or supplemented without the consent of any Holders to provide for such
assumption of the Company's obligations hereunder. Without the consent of each
Holder of Securities, no amendment or modification may change the provisions
relating to the payment of Additional Interest.
Each Holder of Registrable Securities outstanding at the time of any
amendment, modification, supplement, waiver or consent or thereafter shall be
bound by any amendment, modification, supplement, waiver or consent effected
pursuant to this Section 10(b), whether or not any notice, writing or marking
indicating such amendment, modification, supplement, waiver or consent appears
on the Registrable Securities or is delivered to such Holder.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
(x) if to a Holder of Registrable Securities, at the most current
address given by such Holder to the Company;
(y) if to the Company, to:
Pharmaceutical Resources, Inc.
Xxx Xxx Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, President and Chief Executive Officer
Xxxxxxxxx: (000) 000-0000
with a copy (that shall not constitute notice) to:
Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
and
20
(z) if to the Initial Purchasers, to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
or to such other address as such person may have furnished to the other persons
identified in this Section 10(c) in writing in accordance herewith.
(d) PARTIES IN INTEREST. The parties to this Agreement intend that all
Holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Election Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities that are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by, the respective successors and
assigns of the parties hereto and any Holder from time to time of the
Registrable Securities to the aforesaid extent. In the event that any transferee
of any Holder of Registrable Securities shall acquire Registrable Securities, in
any manner, whether by gift, bequest, purchase, operation of law or otherwise,
such transferee shall, without any further writing or action of any kind, be
entitled to receive the benefits of and, if an Election Holder, be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement to the aforesaid extent.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(h) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(i) SURVIVAL. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Election Holder, any director, officer or partner of such Election Holder, any
agent or underwriter, any director, officer or partner of such agent or
underwriter, or any controlling person of any of the foregoing, and shall
21
survive the transfer and registration of the Registrable Securities of such
Election Holder.
(j) SECURITIES HELD BY THE COMPANY. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its Affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
22
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
Pharmaceutical Resources, Inc.
By: /s/ Xxxxxx X. X'Xxxxxx
-------------------------------
Name: Xxxxxx X. X'Xxxxxx
Title: Vice President, Chief
Financial Officer and
Secretary
Accepted as of the date hereof:
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Managing Director
CIBC WORLD MARKETS CORP.
By: /s/ Xxxxxx XxxXxxxx
-------------------------------
Name: Xxxxxx XxxXxxxx
Title: Managing Director
U.S. BANCORP XXXXX XXXXXXX INC.
By: /s/ Xxxx Xxx
-------------------------------
Name: Xxxx Xxx
Title: Managing Director
23
APPENDIX A
----------
PHARMACEUTICAL RESOURCES, INC.
FORM OF NOTICE OF REGISTRATION STATEMENT AND
SELLING SECURITYHOLDER ELECTION AND QUESTIONNAIRE
NOTICE
Pharmaceutical Resources, Inc. (the "COMPANY") has filed, or intends
shortly to file, with the Securities and Exchange Commission (the "COMMISSION"),
a registration statement on Form S-3 or such other Form as may be available (the
"SHELF REGISTRATION STATEMENT") for the registration and resale under Rule 415
of the Securities Act of 1933, as amended (the "SECURITIES ACT"), of the
Company's 2.875% Senior Subordinated Convertible Notes due 2010 (CUSIP No.
717125 AA 6) (the "NOTES"), and common stock, par value $0.01 per share,
issuable upon conversion thereof (the "SHARES" and together with the Notes, the
"TRANSFER RESTRICTED SECURITIES") in accordance with the terms of the
Registration Rights Agreement, dated as of September 30, 2003 (the "REGISTRATION
RIGHTS AGREEMENT"), between the Company and the initial purchasers. A copy of
the Registration Rights Agreement is available from the Company. All capitalized
terms not otherwise defined herein have the meanings ascribed thereto in the
Registration Rights Agreement.
To sell or otherwise dispose of any Transfer Restricted Securities
pursuant to the Shelf Registration Statement, a beneficial owner of Transfer
Restricted Securities generally will be required to be named as a Selling
Securityholder (as defined below) in the related Prospectus, deliver a
Prospectus to purchasers of Transfer Restricted Securities, be subject to
certain civil liability provisions of the Securities Act and be bound by those
provisions of the Registration Rights Agreement applicable to such beneficial
owner (including certain indemnification rights and obligations, as described
below). To be included in the Shelf Registration Statement, this Election and
Questionnaire must be properly completed, executed and delivered to the Company
at the address set forth herein for receipt PRIOR TO OR ON THE 20TH CALENDAR DAY
FROM THE RECEIPT HEREOF (the "ELECTION AND QUESTIONNAIRE DEADLINE"). BENEFICIAL
OWNERS THAT DO NOT COMPLETE THIS ELECTION AND QUESTIONNAIRE AND DELIVER IT TO
THE COMPANY PRIOR TO THE ELECTION AND QUESTIONNAIRE DEADLINE AS PROVIDED BELOW
WILL NOT BE NAMED AS SELLING SECURITYHOLDERS IN THE SHELF REGISTRATION STATEMENT
AT THE TIME IT IS DECLARED EFFECTIVE AND, THEREFORE, WILL NOT BE PERMITTED TO
SELL ANY TRANSFER RESTRICTED SECURITIES PURSUANT TO THE SHELF REGISTRATION
STATEMENT UNTIL WE PREPARE AND FILE A PROSPECTUS SUPPLEMENT OR, IF REQUIRED, A
POST-EFFECTIVE AMENDMENT TO THE SHELF REGISTRATION STATEMENT OR ADDITIONAL SHELF
REGISTRATION STATEMENT.
Certain legal consequences arise from being named as a Selling
Securityholder in the Shelf Registration Statement and the related Prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a Selling Securityholder in the Shelf
Registration Statement and the related Prospectus.
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ELECTION
The undersigned holder (the "SELLING SECURITYHOLDER") of Transfer
Restricted Securities hereby elects to include in the Prospectus forming a part
of the Shelf Registration Statement the Transfer Restricted Securities
beneficially owned by it and listed below in Item III (unless otherwise
specified under Item III). The undersigned, by signing and returning this
Election and Questionnaire, understands that it will be bound with respect to
such Transfer Restricted Securities by the terms and conditions of this Election
and Questionnaire and the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the Selling Securityholder
has agreed to indemnify and hold harmless the initial purchasers, the Company
and each person, if any, who controls any of such parties within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and each of
their respective directors, officers, employees, representatives and agents,
from and against certain losses arising in connection with statements concerning
the Selling Securityholder made in the Shelf Registration Statement or the
related Prospectus, or any amendment or supplement thereto or any state
securities or "Blue Sky" application in reliance upon the information provided
in this Election and Questionnaire.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
QUESTIONNAIRE
I. A. Full Legal Name of Selling Securityholder:
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B. Full legal name of registered holder (if not the same as (A) above) through
which Transfer Restricted Securities listed in (C) below are held:
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C. Full legal name of DTC participant (if applicable and if not the same as
(B) above) through which Transfer Restricted Securities listed in Item III are
held:
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II. Address for notices to Selling Securityholders:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Telephone:
-------------
Fax:
-------------------
A-2
Contact Person:
--------------------
III. Beneficial ownership of Transfer Restricted Securities:
A. Type of Transfer Restricted Securities beneficially owned, and principal
amount of Notes or number of shares of Common Stock, as the case may be,
beneficially owned:
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B. CUSIP No(s). of such Transfer Restricted Securities beneficially owned:
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IV. Beneficial ownership of the Company's securities owned by the Selling
Securityholder:
EXCEPT AS SET FORTH BELOW IN THIS ITEM IV, THE UNDERSIGNED IS NOT THE BENEFICIAL
OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER THAN THE TRANSFER
RESTRICTED SECURITIES LISTED ABOVE IN ITEM III ("OTHER SECURITIES").
A. Type and amount of Other Securities beneficially owned by the Selling
Securityholder:
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B. CUSIP No(s). of such Other Securities beneficially owned:
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V. Relationship with the Company
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (5% or more) has held any
position or office or has had any other material relationship with the Company
(or their predecessors or affiliates) during the past three years.
State any exception here:
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VI. Plan of Distribution:
Except as set forth below, the undersigned (including its donees or pledgees)
intends to distribute the Transfer Restricted Securities listed above in Item
III. pursuant to the Shelf Registration Statement only as follows (if at all).
Such Transfer Restricted Securities may be sold from time to time directly by
the undersigned or, alternatively, through underwriters, broker-dealers or
agents. If the Transfer Restricted Securities are sold through underwriters or
broker-dealers, the Selling Securityholder will be responsible for underwriting
A-3
discounts or commissions or agent's commissions. Such Transfer Restricted
Securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve crosses or block transactions):
1. on any national securities exchange or quotation service on which the
Transfer Restricted Securities may be listed or quoted at the time of sale;
2. in the over-the-counter market;
3. in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
4. through the writing of options.
In connection with sales of the Transfer Restricted Securities or otherwise, the
undersigned may enter into hedging transactions with broker-dealers, which may
in turn engage in short sales of the Transfer Restricted Securities and deliver
Transfer Restricted Securities to close out such short positions, or loan or
pledge Transfer Restricted Securities to broker-dealers that in turn may sell
such securities. State any exceptions here:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
agreement of the Company.
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees it will comply, with the
prospectus delivery requirements and other provisions of the Securities Act and
the Exchange Act and the respective rules and regulations promulgated
thereunder, particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Transfer Restricted Securities
pursuant to the Shelf Registration Statement.
If the Selling Securityholder transfers all or any portion of the Transfer
Restricted Securities listed in Item III above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferee(s) at the time of the transfer of its rights and
obligations under this Election and Questionnaire and the Registration Rights
Agreement.
A-4
By signing below, the Selling Securityholder consents to the disclosure of
the information contained herein in its answers to Items I through VI above and
the inclusion of such information in the Shelf Registration Statement, the
related Prospectus and any state securities or "Blue Sky" applications. The
Selling Securityholder understands that such information will be relied upon by
the Company in connection with the preparation or amendment of the Shelf
Registration Statement, the related Prospectus and any state securities or "Blue
Sky" applications.
In accordance with the Selling Securityholder's obligation under the
Registration Rights Agreement to provide such information as may be required by
law for inclusion in the Shelf Registration Statement or the related Prospectus,
the Selling Securityholder agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains effective. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing at the address set forth below.
Once this Election and Questionnaire is executed by the Selling
Securityholders and received by the Company, the terms of this Election and
Questionnaire and the representations and warranties contained herein shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives and assigns of the
Company and the Selling Securityholder with respect to the Transfer Restricted
Securities beneficially owned by such Selling Securityholder and listed in Item
III above. This Election and Questionnaire shall be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Election and Questionnaire to be executed and delivered either in person or
by its authorized agent.
Dated:
Beneficial Owner
By:
------------------------------------
Name:
Title:
Please return the properly completed and executed Election and
Questionnaire for receipt PRIOR TO OR ON THE 20TH CALENDAR DAY FROM RECEIPT
HEREOF to Pharmaceutical Resources, Inc. at:
Pharmaceutical Resources, Inc.
Xxx Xxx Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Secretary
A-5
EXHIBIT 1 TO APPENDIX A
NOTICE OF TRANSFER PURSUANT
TO REGISTRATION STATEMENT
Pharmaceutical Resources, Inc.
Xxx Xxx Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Secretary
Re: Pharmaceutical Resources, Inc.'s (the "COMPANY")
2.875% Senior Subordinated Convertible Notes due 2010 (the "NOTES")
Dear Sirs:
Please be advised that ____________ has transferred $________ aggregate
principal amount of the above-referenced Notes or ____________ shares of the
Company's common stock issued on conversion of Notes, pursuant to the
Registration Statement on Form S-3 (File No. 333-_____ ) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above named beneficial owner of the Notes
or common stock is named as a selling securityholder in the Prospectus dated
____________, _______ or in amendments or supplements thereto, and that the
aggregate principal amount of the Notes or number of shares of common stock
transferred are [all or a portion of] the Notes or common stock listed in such
Prospectus, as amended or supplemented, opposite such owner's name.
Very truly yours,
[name]
By:
----------------------------------
(Authorized signature)
Dated:
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