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Exhibit (b)(3)
CREDIT AGREEMENT
September 13, 1999
Teva Pharmaceuticals USA, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Teva Pharmaceutical Industries Ltd.
0 Xxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxx
Ladies and Gentlemen:
On behalf of Bank Leumi USA (the "Bank"), we are pleased to advise you
that the Bank is prepared to make available to Teva Pharmaceuticals USA, Inc.
("Borrower") for use by its wholly-owned subsidiary Caribou Merger Corporation
("MergerSub") a credit facility, on the terms specified herein, in an aggregate
principal amount of up to $115,000,000 to be used by MergerSub to fund the
acquisition of all of the outstanding Common Stock of Xxxxxx Pharmaceutical,
Inc. ("Xxxxxx") for a purchase price of $11.00 per share in cash. Such
acquisition will be made pursuant to an Agreement and Plan of Merger among
Borrower, MergerSub and Xxxxxx, dated August 9, 1999, a copy of which has
previously been furnished to us (the "Merger Agreement"). The Merger Agreement
contemplates a first step tender offer (the "Offer"). Any Xxxxxx shares not
purchased pursuant to the Offer will be acquired in a subsequent merger under
the Merger Agreement (the "Cash Merger") at the same $11.00 per share cash
price. You have advised us that Hoechst Corporation, the holder of approximately
52% of the outstanding Common Stock of Xxxxxx has agreed to tender its shares
into the Offer pursuant to a Stockholder Agreement, dated August 9, 1999, a copy
of which has also been furnished to us. The forgoing Offer, Cash Merger and
related transactions are herein called the "Xxxxxx Transaction".
Section 1. AGREEMENT TO MAKE LOANS. The Bank (subject to the provisions
of Section 2 hereof and to the terms and conditions of the Promissory Note
referenced in Section 2 hereof) hereby agrees to make loans (the "Loans" and
individually a "Loan") to Borrower from time to time on one or more Business
Days on or prior to December 31, 1999 upon at least three Business Days' written
notice to the Bank in an aggregate amount not to exceed $115,000,000, provided
that each Loan shall be in an amount of at least $10,000,000 and provided
further that Borrower need only
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provide two Business Days written notice prior to the initial Loan hereunder.
Section 2. CONDITIONS TO EACH LOAN. The Bank's obligation to make each
Loan on any date (the "Loan Date") is subject to the following conditions:
(i) the Bank shall have received a Promissory Note duly
executed by Borrower in the principal amount of $115,000,000, said
Promissory Note to be substantially in the form of Exhibit A hereto;
(ii) the Bank shall have received an Unlimited Guaranty duly
executed by Teva Pharmaceutical Industries, Ltd. ("Guarantor")
guaranteeing the Loans (including the Loan being made on the Loan
Date), said Unlimited Guaranty to be substantially in the form of
Exhibit B hereto;
(iii) the Bank shall have received a Negative Pledge Letter
duly executed by Guarantor substantially in the form of Exhibit C
hereto (the "Guarantor Negative Pledge Letter") and a Negative Pledge
Letter duly executed by Borrower substantially in the form of Exhibit D
hereto (the "Borrower Negative Pledge Letter" and, together with the
Guarantor Negative Pledge Letter, the "Negative Pledge Letters");
(iv) the Bank shall have received copies (certified to its
satisfaction) of resolutions of the Board of Directors (or an
authorized committee thereof) of each of Borrower and Guarantor
authorizing the execution and delivery of this Agreement, the
Promissory Note, the Unlimited Guaranty, the Negative Pledge Letters
and the consummation of the transactions contemplated hereby;
(v) the Bank shall have received legal opinions from counsel
for each of Borrower and Guarantor in substantially the respective
forms of Exhibits E and F hereto;
(vi) Borrower shall, substantially concurrently with such
Loan, be borrowing an amount equal to the amount of such Loan from Bank
Hapoalim B.M. and for the purpose specified in clause (vii) below;
(vii) Borrower will utilize the proceeds of such Loan to
capitalize MergerSub to provide the cash necessary to fund the Offer
and the Cash Merger, together with expenses incidental to the Xxxxxx
Transaction; and
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(viii) on the Loan Date (x) (A) the Borrower shall not be in
default of any of its obligations in any material respect under the
Borrower Negative Pledge Letter and (B) no condition or event shall
have occurred and be continuing which would result in, or which has
resulted in, the acceleration of the Promissory Note (either (A) or
(B), a "Borrower Default") and (y) the Guarantor shall not be in
default of any of its obligations in any material respect under the
Unlimited Guaranty or the Guarantor Negative Pledge Letter (a
"Guarantor Default").
It is understood and agreed by Borrower and Guarantor that requesting a
Loan pursuant to Section 1 hereof and the acceptance of the proceeds thereof on
such Loan Date by Borrower, shall be taken as a representation and warranty from
Borrower and Guarantor that (a) no Borrower Default or Guarantor Default then
exists on the Loan Date and (b) the conditions specified in clauses (vii) and
(viii) of the foregoing sentence have been met.
3. NOTICES. All notices and communications provided for hereunder shall
be in writing and sent (a) by telecopier if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
If to the Bank, to:
Bank Leumi USA
International Lending Department
000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxxx
Telecopier: 000-000-0000
or at such other address as the Bank shall have specified to Borrower and
Guarantor in accordance with this Section 3.
If to Borrower, to:
Teva Pharmaceuticals USA, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier: 000-000-0000
or at such other address as Borrower shall have specified to the Bank in
accordance with this Section 3.
If to Guarantor, to:
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Teva Pharmaceutical Industries Ltd.
5 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx Xxxxx, 00000, Xxxxxx
Attention: Xxx Xxxxxxxxx
Telecopier: 011-972-2-589-2839
or at such other address as the Guarantor shall have specified to the Bank in
accordance with this Section 3.
4. EXPENSES AND INDEMNITY. Borrower shall reimburse Bank on demand for
any and all costs and expenses incurred by the Bank in connection with the Loans
(including, without limitation, the use of the proceeds thereof) and the
transactions contemplated hereby (whether incurred before or after the date
hereof) including, without limitation, fees and out-of-pocket expenses of
counsel regardless of whether any Loans are made hereunder (unless such failure
is a result of a default of the Bank hereunder). In the event that the Bank
becomes involved in any capacity in any action, proceeding or investigation in
connection with any matter contemplated by this Agreement, the Borrower and the
Guarantor will reimburse the Bank for its legal and other expenses (including
the cost of any investigation and preparation) as they are incurred by the Bank.
The Borrower and the Guarantor also agree to indemnify and hold harmless the
Bank and its affiliates and their respective directors, officers, employees and
agents (the "Indemnified Parties") from and against any and all losses, claims,
damages and liabilities, joint or several, related to or arising out of any
matters contemplated by this Agreement unless and only to the extent that it
shall be finally judicially determined that such losses, claims, damages or
liabilities resulted primarily from the gross negligence or willful misconduct
of the Bank.
5. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
6. ENTIRE AGREEMENT. This letter embodies the entire agreement and
understanding among the Bank, the Borrower and the Guarantor with respect to the
specific matters set forth herein and supersedes all prior agreements and
understandings relating to the subject matter hereof.
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7. GOVERNING LAW. THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAW.
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If you are in agreement with the foregoing, please execute and return
the enclosed copy of this letter whereupon this letter shall become a binding
agreement among us.
Very truly yours,
BANK LEUMI USA
By /s/ Xxx Xxxxxxxx
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Xxx Xxxxxxxx
Assistant Vice President
By /s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx
Senior Vice President
The foregoing is hereby
accepted and agreed to:
Teva Pharmaceuticals USA, Inc.
By /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Senior Vice President and
Chief Financial Officer
Teva Pharmaceutical Industries Ltd.
By /s/ Xxx Xxxxxxxxx September 14, 1999
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Xxx Xxxxxxxxx
Chief Financial Officer
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