EXHIBIT 1.1
EXECUTION COPY
$1,000,000,000
TEVA PHARMACEUTICAL FINANCE II, LLC
$400,000,000 0.50% Series A Convertible Senior Debentures due 2024
$600,000,000 0.25% Series B Convertible Senior Debentures due 2024
Payment of principal and interest unconditionally guaranteed by and convertible
into American Depositary Receipts evidencing American Depositary Shares of
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
UNDERWRITING AGREEMENT
----------------------
January 22, 2004
Xxxxxx Brothers Inc.
Credit Suisse First Boston LLC
Citigroup Global Markets Inc.
as Representatives of the several underwriters
named in Schedule 1 hereto
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Teva Pharmaceutical Finance II, LLC (the "Company"), a limited
liability company organized under the laws of the State of Delaware and an
indirect, wholly-owned subsidiary of Teva Pharmaceutical Industries Limited, a
company organized under the laws of Israel (the "Guarantor"), proposes, subject
to the terms and conditions stated herein, to issue and sell $400,000,000 in
aggregate principal amount of its 0.50% Series A Convertible Senior Debentures
due 2024 (the "Series A Firm Debentures") and $600,000,000 in aggregate
principal amount of its 0.25% Series B Convertible Senior Debentures due 2024
(the "Series B Firm Debentures" and together with the Series A Firm Debentures,
the "Firm Debentures"), which Debentures are to be guaranteed by the Guarantor
(the "Firm Guarantees" and, together with the Firm Debentures, the "Firm
Securities"), to the underwriters named in Schedule 1 hereto (individually, each
an "Underwriter" and collectively, the "Underwriters"), for whom you (the
"Representatives") are acting as representatives. In addition, the Company
proposes to grant to the Underwriters an option (the "Option") to purchase up to
an additional $60,000,000 in aggregate principal amount of 0.50% Series A
Convertible Senior Debentures due 2024 (the "Series A Optional Debentures") and
up to an additional $90,000,000 in aggregate principal amount of 0.25% Series B
Convertible Senior Debentures due 2024 (the "Series B Optional Debentures" and
together with the Series A Optional Debentures, the "Optional Debentures"),
similarly guaranteed (the "Optional Guarantees," and, together with the Optional
Debentures, the "Optional Securities"). The Firm Securities and the Optional
Securities are referred to together as the "Securities." The Firm Debentures and
the Optional Debentures are referred to together as the "Debentures," and the
Firm Guarantees and the Optional Guarantees are referred to as the "Guarantees."
The Securities will be convertible into American Depositary Receipts
("ADRs") evidencing American Depositary Shares ("ADSs") representing fully paid,
nonassessable ordinary shares of the Guarantor, par value NIS 0.10 per share
(the "Ordinary Shares"), on the terms, and subject to the conditions, set forth
in the Indenture (as defined below). As used herein, "Conversion Securities"
means the ADSs, the ADRs and the Ordinary Shares represented by the ADSs into
which the Securities are convertible. The Securities will be issued pursuant to
an indenture, to be dated as of the First Delivery Date, as supplemented by a
supplemental indenture (such indenture, so supplemented, the "Indenture") to be
dated as of the First Delivery Date (as defined in Section 2(a)), among the
Company, the Guarantor and The Bank of New York, as Trustee (the "Trustee"). The
ADSs and the ADRs will be issued upon the deposit, if and when required by the
Indenture, of the Ordinary Shares pursuant to the Deposit Agreement dated
February 12, 1997 (the "Deposit Agreement"), among the Guarantor, the Bank of
New York, as depositary (the "Depositary"), and all holders from time to time of
the ADSs.
You have advised the Company and the Guarantor that you will offer and
sell the Securities purchased from them hereunder in accordance with Section 2
of this Agreement as soon as you deem advisable.
This Agreement and the Indenture are referred to herein collectively
as the "Operative Agreements" and, together with the Debentures, the "Operative
Documents."
Any reference herein to the Registration Statement, the Prospectus and
the Preliminary Prospectus shall be deemed to refer to and include the
Incorporated Documents as of the Effective Time of the Registration Statement or
the issue date of such Prospectus or Preliminary Prospectus, respectively, and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Prospectus and the Preliminary
Prospectus shall be deemed to refer to and included the filing of any document
under the Exchange Act after the Effective Time of the Registration Statement or
the issue date of the Prospectus or Preliminary Prospectus, respectively, deemed
to be incorporated therein by reference.
This is to confirm the agreement between the Company, the Guarantor
and the Underwriters concerning the issue, offer and sale of the Securities.
1. Representations, Warranties and Agreements of the Company and the
Guarantor. The Company and the Guarantor, jointly and severally, represent,
warrant to and agree with, the Underwriters that:
(a) The Registration Statement, including a related prospectus,
setting forth information with respect to the Company, the Guarantor and the
Securities has (i) been prepared by the Company and the Guarantor in conformity
in all material respects with the requirements
2
of the Securities Act of 1933, as amended (the "Securities Act"), (ii) been
filed with the Commission under the Securities Act and (iii) become effective
under the Securities Act. The Company and the Guarantor have included in such
registration statement, as amended at the Effective Time, all information (other
than Rule 430A Information) required by the Securities Act and the rules
thereunder to be included in such registration statement and the related
prospectus. The Company may have filed one or more amendments thereto, including
a Preliminary Prospectus, each of which has previously been furnished to you.
The Company and the Guarantor will next file with the Commission the Prospectus
in accordance with Rules 415 and 424(b) of the rules and regulations of the
Commission under the Securities Act (the "Rules and Regulations"). As filed,
such Prospectus will contain all Rule 430A Information, together with all other
such required information, and, except to the extent the Representatives will
agree in writing to a modification, will be in all substantial respects in the
form furnished to you prior to the Execution Time, or, to the extent not
completed at the Execution Time, shall contain only such additional information
and other changes as the Company and Guarantor have advised you, prior to the
Execution Time, will be included or made therein or such changes as are made
after consulting with you or your counsel.
(b) The conditions for use of Form F-3, as set forth in the General
Instructions thereto, have been satisfied or waived.
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission,
respectively, conform, in all material respects to the requirements of the
Securities Act and the Trust Indenture Act. The Registration Statement and any
amendment thereto did not, and will not, as of the Effective Date, contain any
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, in light of the
circumstances under which they were made, not misleading. The Prospectus does
not and will not, as of the date thereof and any applicable Delivery Date (as
defined in Section 2(a)), 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, in light of the circumstances under which they were made,
not misleading, it being understood that neither the Company nor the Guarantor
makes any representation or warranty as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company and the Guarantor
by the Representatives, on behalf of the Underwriters, specifically for
inclusion therein as provided in Section 7(e).
(d) The Incorporated Documents as amended or supplemented at the date
hereof, when they were filed with the Commission, conformed in all material
respects to the requirements of the Securities Act and the Exchange Act. None of
the Incorporated Documents as amended or supplemented at the date hereof, when
such documents were filed with the Commission, contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any further documents
so filed and incorporated by reference in the Prospectus, when such documents
are filed with Commission, will conform in all material respects to the
requirements of the Exchange Act and will not contain any untrue statement of a
material fact or omit to state any material fact required to be
3
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) Each of the Guarantor and each "significant subsidiary" of the
Guarantor (as such term is defined in Rule 1-02(w) of Regulation S-X) (each, a
"Significant Subsidiary" and, collectively, the "Significant Subsidiaries"),
other than the Company, has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification (except for
where the failure to be so qualified would not have a material adverse effect on
the affairs, management, business, properties, financial condition, results of
operations or prospects of the Guarantor and its subsidiaries (including the
Company), taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any amendment or supplement thereto) (a "Material
Adverse Effect")), and has all corporate power and authority necessary to own or
hold its properties and to conduct its business as described in the Prospectus.
(f) The Company has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of property or
the conduct of its businesses requires such qualification (except for where the
failure to be so qualified would not have a Material Adverse Effect), and has
all limited liability company power and authority necessary to own or hold its
properties and to conduct its businesses as described in the Prospectus.
(g) All the outstanding shares of capital stock of each Significant
Subsidiary of the Guarantor (other than the Company) have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus, all outstanding shares of capital stock
of such subsidiaries are owned by the Guarantor either directly or through
wholly owned subsidiaries free and clear of any perfected security interest or
any other security interests, claims, liens or encumbrances.
(h) All the outstanding membership interests of the Company have been
duly and validly authorized and issued, and, except as otherwise set forth in
the Prospectus, all outstanding membership interests of the Company are owned by
the Guarantor either directly or through wholly owned subsidiaries free and
clear of any perfected security interest or any other security interests,
claims, liens or encumbrances.
(i) The Guarantor has an authorized capitalization as set forth in
the Prospectus, and all of the issued and outstanding shares of capital stock of
the Guarantor have been duly and validly authorized and issued, are fully paid
and nonassessable and conform to the description thereof contained in the
Prospectus; the Ordinary Shares issuable upon conversion of the Securities have
been duly authorized and reserved by the board of directors of the Guarantor for
issuance upon conversion of the Securities and are free of preemptive rights;
and all Conversion Securities, when so issued and delivered upon such conversion
in accordance with
4
the terms of the Securities and the Indenture, will be duly and validly
authorized and issued, fully paid and nonassessable and free and clear of all
liens, encumbrances, equities or claims.
(j) The statements in the Prospectus Supplement under the caption
"Description of the Debentures and the Guarantee" and in the Base Prospectus
under the captions "Description of the Debentures and the Guarantee,"
"Description of Ordinary Shares" and "Description of American Depositary
Shares," insofar as they purport to summarize the provisions of the Indenture,
the Deposit Agreement, the Securities, the Ordinary Shares and the Conversion
Securities, are accurate and complete in all material respects.
(k) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company and the Guarantor, the issuance of the
Securities or issuance or delivery of Conversion Securities and the deposit of
the Ordinary Shares with the Depositary when required by the Indenture and the
consummation of the transactions contemplated hereby and thereby will not (x)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
the Guarantor is a party or by which the Company or the Guarantor is bound or to
which any of the properties or assets of the Company or the Guarantor is
subject, except for any conflict, breach or violation that would not have,
individually or in the aggregate, a Material Adverse Effect, or (y) result in
any violation of the provisions of the memorandum of association or the articles
of association of the Guarantor or the limited liability company operating
agreement of the Company or (z) result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or the Guarantor or any of their respective
properties or assets; and except (i) such as have been or will be obtained under
the Securities Act, the Trust Indenture Act and the rules and regulations
promulgated thereunder, (ii) as required by the securities or "blue sky" laws of
any state of the United States and (iii) the filing of Reports with the Israel
Securities Authority, the Tel Aviv Stock Exchange and the Companies Registrar
that may be required to be made after the date of this Agreement and the Closing
Date, as applicable, no consent, approval, authorization or order of, or filing
or registration with, any such court or governmental agency or body is required
for the execution, delivery and performance of the Operative Documents by the
Company and the Guarantor, and the consummation of the transactions contemplated
hereby and thereby.
(l) The Deposit Agreement was duly authorized, executed and delivered
by the Guarantor, and, assuming due authorization, execution and delivery by the
Depositary, is a valid and legally binding agreement of the Guarantor,
enforceable in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization and similar laws of general applicability
relating to or affecting creditors' rights and to general principles of equity;
upon issuance by the Depositary of ADRs evidencing ADSs against the deposit of
the Ordinary Shares in respect thereof in accordance with the provisions of the
Deposit Agreement, such ADRs will be duly and validly issued and the persons in
whose names the ADRs are registered will be entitled to the rights specified
therein and in the Deposit Agreement.
(m) Each of the Company and the Guarantor has all necessary limited
liability company and corporate, respectively, right, power and authority to
execute and deliver this Agreement and perform its obligations hereunder; and
this Agreement and the transactions
5
contemplated hereby have been duly authorized, executed and delivered by each of
the Company and the Guarantor.
(n) Each of the Company and the Guarantor has all necessary limited
liability company and corporate, respectively, right, power and authority to
execute and deliver the Indenture and perform its obligations thereunder; the
Indenture has been duly authorized by each of the Company and the Guarantor, and
on the First Delivery Date, the Indenture will be qualified under the Trust
Indenture Act and will have been duly executed and delivered by the Company and
the Guarantor and, assuming due authorization, execution and delivery of the
Indenture by the Trustee, will constitute a legally valid and binding agreement
of each of the Company and the Guarantor, enforceable against each of the
Company and the Guarantor in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, subject to general principles of equity
and to limitations on availability of equitable relief, including specific
performance (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; and the Indenture conforms in
all material respects to the description thereof contained in the Prospectus.
(o) Each of the Company and the Guarantor has all necessary limited
liability company and corporate, respectively, right, power and authority to
execute, issue and deliver the Debentures and Guarantees, respectively, and
perform its obligations thereunder; the Debentures have been duly authorized by
the Company and the Guarantees have been duly authorized by the Guarantor; when
the Debentures are executed, authenticated and issued in accordance with the
terms of the Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement on the applicable Delivery Date (assuming due
authentication of the Debentures by the Trustee), such Debentures will
constitute legally valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, subject to general
principles of equity and to limitations on availability of equitable relief,
including specific performance (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing; when the
Guarantees are executed and issued in accordance with the terms of the Indenture
and the Debentures on which they are endorsed have been executed in accordance
with the Indenture and delivered to and paid for by the Underwriters pursuant to
this Agreement on the applicable Delivery Date, such Guarantees will constitute
legally valid and binding obligations of the Guarantor, entitled to the benefit
of the Indenture; and the Securities conform in all material respects to the
description thereof contained in the Prospectus.
(p) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company or the Guarantor and any person
granting such person the right (other than rights which have been waived or
satisfied) to require the Company or the Guarantor to file a registration
statement under the Securities Act with respect to any securities of the Company
or the Guarantor owned or to be owned by such person or to require the Company
or the Guarantor to include such securities in any securities being registered
pursuant to any registration statement filed by the Company or the Guarantor
under the Securities Act.
6
(q) Except as would not have a Material Adverse Effect, (x) the
Guarantor, since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, and (y) the Company, at any time
since its formation, has not sustained any material loss or interference with
its respective business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree; and, (i) with respect to the Company, since the date on
which it became an indirect wholly owned subsidiary of the Guarantor, and (ii)
with respect to the Guarantor, since the date of the most recent audited
financial statements included or incorporated by reference in the Prospectus,
except for the transactions contemplated hereby or as described in the
Prospectus, there has not been any change in such entity's respective capital
stock or long-term debt of the Company or the Guarantor, or any change or any
development including a prospective change that would have a Material Adverse
Effect, except (A) any exchanges into Ordinary Shares of the exchangeable
securities discussed in Note 7 to the Guarantor's consolidated financial
statements for the year ended December 31, 2002, (B) any grants under the
employee stock plans of the Guarantor or its subsidiaries, (C) grants of options
to purchase up to 5,000,000 Ordinary Shares to officers, directors or employees
of the Guarantor or its subsidiaries, (D) any issuances of Ordinary Shares
represented by ADSs in connection with the acquisition of SICOR Inc. and
pursuant to stock option plans assumed by the Guarantor in connection with such
acquisition. ((A), (B), (C) and (D) together, the "Authorized Grants").
(r) The financial statements of the Guarantor (including the related
notes and supporting schedules) incorporated by reference in the Prospectus
present fairly the financial condition and results of operations of the
Guarantor, at the dates and for the periods indicated, comply as to form with
the applicable accounting requirements of the Securities Act and the rules and
regulations thereunder and have been prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis throughout the periods involved, subject to, only in the case of the
unaudited financial statements, the absence of footnotes and ordinary year-end
adjustments.
(s) Xxxxxxxxx & Xxxxxxxxx, who has certified the financial statements
of the Guarantor included in the Prospectus, whose report is incorporated by
reference in the Prospectus Supplement, are independent accountants as required
by the Securities Act and the rules and regulations promulgated thereunder.
(t) Except as would not have a Material Adverse Effect, each of the
Guarantor and its subsidiaries (including the Company) has good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by it, in each case free and clear of all liens,
encumbrances, security interests, claims and defects, except such as are
described in the Prospectus; and, except as would not have a Material Adverse
Effect, all real property and personal property held under lease by the
Guarantor is held by it under valid, subsisting and enforceable leases.
(u) Except as would not have a Material Adverse Effect, the Guarantor
and its subsidiaries own or possess all patents, patent rights, licenses,
inventions, copyrights, know-how, trade secrets, trademarks, service marks and
trade names necessary for the conduct of its business in the manner described in
the Prospectus, and, except as described in the Prospectus, the Guarantor has
not received any notice of, and has no knowledge of, any infringement of or
7
conflict with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate if the subject of an unfavorable decision,
ruling or finding by a court or arbitrator would have a Material Adverse Effect.
(v) Each of the Company and the Guarantor possesses all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its business as now conducted and as
described in the Prospectus, except for such certificate, authorizations and
permits the failure of which to possess, singly or in the aggregate would not
have a Material Adverse Effect, and neither the Company nor the Guarantor has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit, which singly or in the aggregate,
if the subject of any unfavorable decision, ruling or finding, would have a
Material Adverse Effect, except as described in the Prospectus.
(w) Except as disclosed in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or the Guarantor is a
party or of which any property or asset of the Company or the Guarantor is the
subject which, singly or in the aggregate, if determined adversely to the
Company or the Guarantor taken as a whole would have a Material Adverse Effect;
and to the Company's and the Guarantor's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or, except as set forth
or contemplated in the Prospectus, threatened by others.
(x) Each of the Company and the Guarantor is not (i) in violation of
its memorandum of association, articles of association or limited liability
company operating agreement, as applicable, (ii) in default in any material
respect, and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is subject or
(iii) in violation of any law, ordinance, governmental rule, regulation or court
decree to which it or its properties or assets may be subject or has failed to
obtain any license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its properties or to the
conduct of its business, except to the extent that any such default, event or
violation described in the foregoing clauses (i), (ii) and (iii) would not have
a Material Adverse Effect.
(y) The Guarantor is subject to and in full compliance with the
reporting requirements of section 13 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations promulgated
under the Exchange Act.
(z) The Guarantor and its subsidiaries (including the Company) (i)
are in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
its business and (iii) are in compliance with all terms and conditions of any
such permit, license or approval, except in each case of clauses (i), (ii) and
(iii) where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or
8
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a Material Adverse Effect.
(aa) Each of the Guarantor and its subsidiaries (including the
Company), in its reasonable judgement, has concluded that there are no costs or
liabilities associated with its respective compliance with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(bb) Except as disclosed in the Prospectus, (i) there are no
outstanding securities convertible into or exchangeable for, or warrants, rights
or options issued by the Guarantor or Teva Pharmaceuticals USA, Inc. ("Teva
USA") to purchase, any shares of the capital stock of the Guarantor or Teva USA
(except, in the case of options, any Authorized Grants), (ii) there are no
statutory, contractual, preemptive or other rights to subscribe for or to
purchase any ordinary shares of the Guarantor or Teva USA that do not by their
terms terminate upon the First Delivery Date and (iii) there are no restrictions
upon transfer of the Conversion Securities pursuant to the Guarantor's
memorandum of association or articles of association.
(cc) Except as disclosed in the Prospectus, (i) there are no
outstanding membership interests convertible into or exchangeable for, or
warrants, rights or options issued by the Company to acquire, any membership
interest of the Company (except, in the case of options, any Authorized Grants),
(ii) there are no statutory, contractual, preemptive or other rights to acquire
any membership interest of the Company that do not by their terms terminate upon
the First Delivery Date and (iii) there are no restrictions upon transfer of the
Conversion Securities pursuant to the Company's limited liability company
operating agreement.
(dd) There are no stamp or other issuance or transfer taxes or duties
or other similar fees or charges required to be paid by or on behalf of the
Underwriters in connection with the execution and delivery of this Agreement or
the issuance or sale by the Company of the Securities or upon the issuance of
Conversion Securities upon the conversion thereof.
(ee) Each of the Company and the Guarantor has filed all foreign,
national, federal, state and local tax returns that are required to be filed or
has requested extensions thereof (except in any case in which the failure so to
file would not have a Material Adverse Effect) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as would not have a Material Adverse Effect.
(ff) No subsidiary of the Guarantor (other than the Company) is
currently prohibited, directly or indirectly, from paying any dividends to the
Guarantor, from making any other distribution on such subsidiary's capital
stock, from repaying to the Guarantor any loans or advances to such subsidiary
from the Guarantor or from transferring any of such subsidiary's property or
assets to the Guarantor or any other subsidiary of the Guarantor, except as
described in or contemplated by the Prospectus.
9
(gg) Each of (i) the Company, as of the Closing Date, and (ii) the
Guarantor, as of the date hereof and the Closing Date, maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(hh) No material labor dispute with the employees of the Guarantor or
its subsidiaries exists, except as described in or contemplated by the
Prospectus, or, to the knowledge of the executive officers of Guarantor, is
imminent; and the Company and the Guarantor are not aware of any existing,
threatened or imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors that is reasonably likely to
have a Material Adverse Effect.
(ii) Neither the Company nor the Guarantor is an "investment company"
or an entity "controlled" by an "investment company" within the meaning of such
term under the Investment Company Act of 1940 and the rules and regulations of
the Commission thereunder.
(jj) Except as otherwise disclosed in the Registration Statement and
the Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of the Underwriters and (ii)
does not intend to use any of the proceeds from the sale of the Securities
hereunder to repay any outstanding debt owed to any affiliate of Underwriters.
(kk) None of the Guarantor or any of its affiliates has taken,
directly or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company in
connection with the offering of the Securities.
2. Purchase, Sale and Delivery of Securities.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, (i) the Company agrees (and the
Guarantor agrees to cause the Company) to sell and (ii) the Guarantor agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company and the Guarantor, at a purchase price of
98.375% of the principal amount thereof, the principal amount of Series A Firm
Debentures and Firm Guarantees, respectively, set forth opposite such
Underwriter's name in Schedule I hereto and, at a purchase price of 98.375% of
the principal amount thereof, the principal amount of Series B Firm Debentures
and Firm Guarantees, respectively, set forth opposite such Underwriter's name in
Schedule I hereto. The aggregate amount due to the Company from the sale of the
Firm Debentures is hereinafter referred to as the "purchase price."
Delivery of and payment for the Firm Securities shall be made at the
offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 9:00
10
a.m. (New York time) on January 27, 2004, or such later date as the
Representatives shall designate (the "Closing Date"), which date and time may be
postponed by agreement among the Representatives, the Guarantor and the Company
or as provided in Section 8 (such date and time of delivery and payment for the
Firm Securities being herein called the "First Delivery Date"). Delivery of the
Firm Securities shall be made to the Underwriters against payment of the
purchase price by the Underwriters. Payment for the Firm Securities shall be
effected either by wire transfer of immediately available funds to an account
with a bank in The City of New York, the account number and the ABA number for
such bank to be provided by the Company or the Guarantor to the Representatives
at least two business days in advance of the First Delivery Date, or by such
other manner of payment as may be agreed by the Company or the Guarantor and the
Representatives.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants (and
the Guarantor agrees to cause the Company to grant) and the Guarantor hereby
grants to the Underwriters an option to purchase, severally and not jointly, the
Series A Optional Debentures and the Optional Guarantees relating thereto (the
"Series A Option") and the Series B Optional Debentures and the Optional
Guarantees relating thereto (the "Series B Option"). The purchase price per
Series A Optional Debenture and per Series B Optional Debenture shall be the
same price as the Underwriters shall pay per Series A Firm Debentures and per
Series B Firm Debentures pursuant to Section 2(a). The principal amount of the
Series A Optional Debentures and the Series B Optional Debentures to be sold to
each Underwriter shall be that principal amount of such series of debentures
which bears the same ratio to the aggregate principal amount of Series A
Optional Debentures or Series B Optional Debentures, respectively, being
purchased as the principal amount of Series A Firm Debentures and Series B Firm
Debentures, respectively, set forth opposite the name of such Underwriter in
Schedule I hereto bears to the aggregate principal amount of Series A Firm
Debentures and Series B Firm Debentures, respectively, being purchased hereunder
(or such number increased as set forth in Section 8). The Option may be
exercised at the sole discretion of the Underwriters. The Series A Option and
the Series B Option may be exercised independently of one another, but only once
each in whole or in part at any time, not more than 30 days subsequent to the
date of this Agreement upon notice in writing or by facsimile by the
Representatives to the Company setting forth the amount (which shall be an
integral multiple of $1,000) of Optional Securities as to which the Underwriters
are exercising the Option.
Each date for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Delivery Date," which may be on or
after the First Delivery Date (the First Delivery Date and the Optional Delivery
Date, if any, being sometimes referred to as a "Delivery Date"), shall be
determined by the Representatives but shall not be later than five full business
days after written notice of election to purchase Optional Securities is given.
Delivery of the Optional Securities shall be made to the Underwriters against
payment of the purchase price by the Underwriters. Payment for the Optional
Securities shall be effected either by wire transfer of immediately available
funds to an account with a bank in The City of New York, the account number and
the ABA number for such bank to be provided by the Company or the Guarantor to
the Representatives at least two business days in advance of the Optional
Delivery Date, or by such other manner of payment as may be agreed by the
Company, the Guarantor and the Representatives.
11
(c) The Company will deliver against payment of the purchase price
the Securities in the form of one or more permanent global certificates (the
"Global Securities"), registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC"). Beneficial interests in the Securities will be
shown on, and transfers thereof will be effected only through, records
maintained in book-entry form by DTC and its participants, Euroclear or
Clearstream, as applicable.
The Global Securities will be made available, at the request of the
Representatives, for checking at least 24 hours prior to such Delivery Date.
(d) Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Underwriters hereunder.
3. Further Agreements of the Company and the Guarantor. The Company
and the Guarantor, jointly and severally, further agree:
(a) (i) To prepare the Prospectus in a form approved by Xxxxxx
Brothers, which approval shall not be unreasonably withheld or delayed, and to
file such Prospectus pursuant to Rule 424(b) of the Rules and Regulations not
later than Commission's close of business on the second Business Day following
the execution and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) of the Rules and Regulations; (ii) to
make no further amendment or any supplement to the Registration Statement or to
the Prospectus (including to any Preliminary Prospectus) prior to any Delivery
Date except as permitted herein; (iii) to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Underwriters with copies thereof; (iv) to file promptly all reports required to
be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the offering
or sale of the Securities; (v) to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of the Prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for additional information;
and (vi) in the event of the issuance of any stop order or of any order
preventing or suspending the use of the Prospectus or suspending any such
qualification, to use promptly its reasonable best efforts to obtain its
withdrawal.
(b) To furnish promptly to the Underwriters and to counsel for the
Underwriters, Cleary, Gottlieb, Xxxxx & Xxxxxxxx, if requested a signed or
facsimile signed copy of the Registration Statement as originally filed with the
Commission, and each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith.
(c) To deliver promptly to the Underwriters and counsel for the
Underwriters such number of the following documents as the Underwriters shall
reasonably request: (i)
12
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
the Prospectus and any amended or supplemented Prospectus and any Preliminary
Prospectus, and, if the delivery of a prospectus is required at any time after
the Execution Time in connection with the offering or sale of the Securities and
if at such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading when such Prospectus is delivered, or, if, in the opinion
of counsel for the Underwriters, for any other reason it shall be necessary to
amend or supplement the Prospectus in order to comply with the Securities Act,
to notify the Representatives and, upon their request, to prepare and furnish
without charge to the Underwriters and to any dealer in securities as many
copies of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance as the Underwriters may from
time to time reasonably request. The Company will pay the expenses of printing
and distributing to the Underwriters all such documents.
(d) During the time that delivery of a prospectus is required for the
initial offering and sale of Securities to file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or any supplement to
the Prospectus that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or that is requested by the
Commission.
(e) For so long as the delivery of a prospectus is required in
connection with the initial offering or sale of the Securities, prior to filing
with the Commission any amendment to the Registration Statement or supplement to
the Prospectus or any Prospectus (including any Preliminary Prospectus) and any
document incorporated by reference in the Prospectus pursuant to Rule 424 of the
Rules and Regulations, to furnish a copy thereof to the Underwriters and counsel
for the Underwriters and obtain the consent of Xxxxxx Brothers, which consent
shall not unreasonably be withheld or delayed.
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Underwriters an earnings statement of the Company and its consolidated
subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158 of the Rules
and Regulations).
(g) To use its reasonable efforts to take such action as the
Representatives may reasonably request from time to time, to qualify the
Securities for offering and sale under the securities laws of such jurisdictions
as the Representatives may request and to pay any fee of the National
Association of Securities Dealers, Inc., in connection with any review of the
offering, to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions in the United States for as long as may
be necessary to complete the resale of the Securities; provided, however, that
in connection therewith, the Company shall not be required to qualify as a
foreign corporation or otherwise subject itself to taxation in any jurisdiction
in which it is not otherwise so qualified or subject.
13
(h) To apply the proceeds from the sale of the Securities as set
forth under "Use of Proceeds" in the Prospectus.
(i) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, offer for sale, sell or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be expected to,
result in the disposition or purchase by any person at any time in the future
of), or announce an offering of any Ordinary Shares or other equity securities
of the Guarantor (other than the Conversion Securities), or sell or grant
options, rights or warrants with respect to any Ordinary Shares or the common
stock of the Company (other than Authorized Grants or issuances of Ordinary
Shares or rights or options to receive Ordinary Shares pursuant to the exercise
of any Authorized Grants contemplated as of the date hereof or warrants or
options outstanding on the date of the Prospectus) without the prior written
consent of Xxxxxx Brothers Inc.
(j) The Guarantor will deposit, if and when required by the
Indenture, Ordinary Shares issuable upon conversion of the Securities with the
Depositary in accordance with the terms of the Deposit Agreement and the
Indenture and will comply with the terms of the Deposit Agreement so that ADRs
evidencing ADSs representing such Ordinary Shares will be executed by the
Depositary and delivered to the holders of the Securities as required by the
Indenture.
(k) The Guarantor will reserve and keep available at all times, free
of pre-emptive rights, the full number of Ordinary Shares issuable upon
conversion of the Securities.
(l) Not to take, directly or indirectly, any action designed to cause
or result in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security of
the Guarantor or the Company in connection with the offering of the Securities.
(m) Between the date hereof and the Closing Date, not to do or
authorize any act or thing that would result in an adjustment of the conversion
price.
(n) To take such steps as shall be necessary to ensure that neither
the Guarantor nor the Company shall become an "investment company" within the
meaning of such term under the Investment Company Act, and the rules and
regulations of the Commission thereunder.
(o) To use its reasonable best efforts to cause the Securities to be
accepted for clearance and settlement through the facilities of DTC, Euroclear
or Clearstream, as applicable.
4. Expenses. The Company and the Guarantor, jointly and severally,
agree to pay:
(a) the costs incident to the authorization, issuance, sale and
delivery of the Securities, and any taxes payable in that connection;
14
(b) the costs incident to the preparation, printing and distribution
of the Prospectus and any amendment or supplement to the Prospectus (including
any Preliminary Prospectus) or the Registration Statement, all as provided in
this Agreement;
(c) the costs of producing and distributing the Operative Documents;
(d) the fees and expenses of Xxxxxxx Xxxx & Xxxxxxxxx LLP ("Xxxxxxx
Xxxx"), Xxxxxxxxxx-Xxxxx & Co. and Xxxxxxxxx & Xxxxxxxxx;
(e) the costs of distributing the terms of agreement relating to the
organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication and any transfer and
stamp tax on the Securities due upon resale by the Underwriters of Securities
purchased under this Agreement;
(f) the fees and expenses of qualifying the Securities under the
securities laws of the several jurisdictions as provided in Section 3(f) and of
preparing, printing and distributing a Blue Sky Memorandum and any fee of the
National Association of Securities Dealers, Inc., in connection with any review
of the offering (including reasonable related fees and expenses of counsel to
the Underwriters up to a maximum of $15,000);
(g) all fees and expenses incurred in connection with any rating of
the Securities;
(h) the costs of preparing the Securities;
(i) all expenses and fees in connection with the inclusion of the
Conversion Securities on the Nasdaq;
(j) the cost of the deposit of the Ordinary Shares issuable upon the
conversion of the Securities under the Deposit Agreement, the issuance
thereunder of the ADSs, the issuance of the ADRs and the fees of the Depositary;
(k) the fees and expenses (including fees and disbursements of
counsel) of the Trustee, and the costs and charges of any registrar, transfer
agent, paying agent or conversion agent; and
(l) all other costs and expenses incident to the performance of the
obligations of the Company and the Guarantor under this Agreement;
provided, however, that, except as provided in this Section 4 and in Section 7,
the Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel.
15
5. Conditions of the Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Guarantor contained herein, to the performance by the Company and the
Guarantor of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) No Underwriter shall have discovered and disclosed to the Company
or the Guarantor prior to or on such Delivery Date that the Prospectus or any
amendment or supplement thereto contains any untrue statement of a fact which,
in the opinion of counsel to the Underwriters, is material or omits to state any
fact which is material and necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or that
the Registration Statement or any amendment thereto contains any untrue
statement of a fact which, in the opinion of counsel to the Underwriters, is
material or omits to state any fact which is material and necessary to make the
statements therein not misleading.
(b) The Prospectus shall have been timely filed with the Commission
in accordance with Section 4(a) of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or, to the
knowledge of any of the parties hereto, threatened by the Commission; and any
request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied
with in all material respects.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of the Operative Documents and the Prospectus
or any amendment or supplement thereto, and all other legal matters relating to
the Operative Documents and the transactions contemplated thereby shall be
satisfactory in all material respects to counsel to the Underwriters, and the
Company and the Guarantor shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
(d) Xxxxxxx Xxxx shall have furnished to the Underwriters their
written opinion, as U.S. counsel to the Company and the Guarantor, addressed to
the Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Underwriters, to the effect that:
(i) The Registration Statement has become effective under the
Securities Act; any required filing of the Base Prospectus, the
Prospectus, the Preliminary Prospectus and any supplements thereto,
pursuant to Rule 424(b) of the Rules and Regulations has been made in
the manner and within the time period required by Rule 424(b) of the
Rules and Regulations; to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Prospectus (other
than the financial statements and other financial and statistical
information contained therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
applicable requirements of the Securities Act, the Exchange Act and
the Trust Indenture Act and the respective rules thereunder;
16
(ii) Teva USA has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware;
(iii) The Company has been duly formed and is validly existing
as a limited liability company in good standing under the laws of the
State of Delaware;
(iv) All of the outstanding shares of capital stock and
membership interests of each of Teva USA and the Company,
respectively, have been duly and validly authorized and issued, and
are fully paid and nonassessable, and all outstanding shares of
capital stock of Teva USA are owned by Orvet UK Ltd., and all
outstanding membership interests of the Company are owned by the Teva
USA, in each case, free and clear of any perfected security interest
and, to the knowledge of such counsel after due inquiry, any other
security interests, claims, liens or encumbrances;
(v) The statements in the Prospectus Supplement under the
caption "Description of the Debentures and the Guarantee" and in the
Base Prospectus under the captions "Description of the Debentures and
the Guarantee" and "Description of American Depositary Shares,"
insofar as they purport to summarize the provisions of the Indenture,
the Securities and the Conversion Securities (other than the Ordinary
Shares) are accurate and complete in all material respects;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The Company has all necessary limited liability company
right, power and authority to execute and deliver each of the
Operative Documents to which it is a party and to perform its
obligations thereunder and to issue, sell and deliver the Debentures
to the Underwriters;
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery thereof by the Trustee and the Guarantor, constitutes a
legally valid and binding agreement of the Company and the Guarantor
enforceable against the Company and the Guarantor in accordance with
its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, subject to
general principles of equity and to limitations on availability of
equitable relief, including specific performance (regardless of
whether such enforceability is considered in a proceeding in equity or
at law) or by an implied covenant of good faith and fair dealing and
has been qualified under the Trust Indenture Act;
(ix) The Debentures have been duly authorized by the Company
and, assuming due authorization, execution and delivery by the Company
and the Trustee, have been issued and authenticated in accordance with
the terms of the
17
Indenture and when delivered to and paid for by the Underwriters, will
constitute legally valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, subject to general principles of equity and to
limitations on availability of equitable relief, including specific
performance (regardless of whether such enforceability is considered
in a proceeding in equity or at law) or by an implied covenant of good
faith and fair dealing;
(x) The Guarantees, assuming due authorization, execution and
delivery by the Guarantor, have been issued in accordance with the
terms of the Indenture and the Debentures on which they are endorsed,
have been executed in accordance with the Indenture and when delivered
to and paid for by the Underwriters pursuant to this Agreement, will
constitute legally valid and binding obligations of the Guarantor,
entitled to the benefits of the Indenture except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, subject to general principles of equity and to
limitations on availability of equitable relief, including specific
performance (regardless of whether such enforceability is considered
in a proceeding in equity or at law) or by an implied covenant of good
faith and fair dealing;
(xi) The Deposit Agreement, assuming due authorization,
execution and delivery by the Depositary and the Guarantor,
constitutes a legally valid and binding instrument of the Guarantor
enforceable against the Guarantor in accordance with its terms, except
insofar as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, and subject to general
principles of equity and limitations on availability of equitable
relief (regardless of whether enforcement is sought in a proceeding in
equity or at law) or by an implied covenant of good faith and fair
dealing; and, upon issuance by the Depositary of the ADRs evidencing
ADSs, against the deposit of the Ordinary Shares in accordance with
the provisions of the Deposit Agreement, the ADRs will be duly and
validly issued and the persons in whose names such ADRs are registered
will be entitled to the rights specified therein and in the Deposit
Agreement;
(xii) The execution, delivery and performance of this Agreement
and the Indenture and the issuance of the Securities and the
Conversion Securities and the deposit of the Ordinary Shares to be
deposited with the Depositary upon conversion of the Debentures and
the consummation of the transactions contemplated hereby and thereby
will not conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any property or
asset of the Company pursuant to, (i) the limited liability company
operating agreement of the Company; (ii) except as would not have a
Material Adverse Effect, to the knowledge of such counsel after due
inquiry, the terms of any
18
indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, or covenant
or instrument to which the Company is a party or bound or to which its
property is subject; or (iii) any U.S. statute, law, rule, regulation,
judgment, order or decree applicable to the Company, Teva USA or the
Guarantor of any U.S. court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company, Teva USA, the Guarantor or any of their respective
properties; and, except has been obtained under the Securities Act and
the Trust Indenture Act, and such consents, approvals, authorizations,
orders, filings and registrations as may be required by the securities
or "blue sky" laws of any state of the United States, no consent,
approval, authorization or order of, or filing or registration with,
any such U.S. court or governmental agency or body is required for the
execution, delivery and performance of this Agreement and the
Indenture by the Company or Guarantor and the issuance of the
Securities and the Conversion Securities and the consummation of the
transactions contemplated hereby and thereby;
(xiii) The submission of the Guarantor to the non-exclusive
jurisdiction of the State and Federal courts located in The City of
New York, New York (each, a "New York court") and the appointment of
Teva USA as its authorized agent for the purpose described in Section
14 hereof and similar provisions in the other Operative Agreements,
assuming due authorization, execution and delivery by the Guarantor
and any other parties to such agreements (including, as applicable,
the Underwriters) are legal, valid and binding under the laws of the
State of New York; and service of process in the manner set forth in
Section 14 hereof is effective under the laws of the State of New York
to confer valid personal jurisdiction over the Guarantor;
(xiv) To the knowledge of such counsel, but without inquiring
into dockets of any court, commission, regulatory body, administrative
agency or other government body, and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to
which the Company or the Guarantor is a party or of which any property
or assets of the Company or the Guarantor is the subject which, if
determined adversely to the Guarantor, would have a Material Adverse
Effect;
(xv) The statements in the Prospectus under the caption
"United States Federal Income Tax Considerations," insofar as they
purport to constitute summaries of matters of United States federal
income tax law and regulations or legal conclusions with respect
thereto, fairly summarize such matters described therein in all
material respects; and
(xvi) Each of the Company and the Guarantor is not an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended;
19
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the federal laws of the United States of
America, the laws of the State of New York and the Delaware General
Corporation Law typically applicable to transactions of the type
contemplated by the Operative Documents, and in respect of matters of fact,
upon certificates of officers of the Company or the Guarantor. Such counsel
shall additionally have furnished to the Underwriters a written statement,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Underwriters, to the effect that,
although such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Prospectus
(except as provided in clauses (vi) and (xvi)), nothing has come to the
attention of such counsel that would lead such counsel to believe that on
the Effective Time the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date and on the Delivery Date
included or includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(except that such counsel need express no view as to the financial
statements and other financial information or financial data included
therein), (ii) no information has come to such counsel's attention that
causes it to believe that the documents incorporated by reference in the
Registration Statement and the Prospectus (except that such counsel need
express no view as to the financial statements and other financial
information or financial data incorporated by reference therein), as of the
Execution Time, were not appropriately responsive in all material respects
to the requirements of the Exchange Act, and (iii) such counsel does not
know of any contracts or other documents of a character required to be
filed as exhibits to the Registration Statement or required to be described
in the Registration Statement or the Prospectus that are not filed or
described as required. With respect to such statements, such counsel may
state that its belief is based upon its participation in the preparation of
the Prospectus and Registration Statements and any amendments or
supplements thereto and documents incorporated therein by reference,
certificates of officers of the Guarantor or the Company and of state
authorities and discussion of the contents thereof with officers of the
Guarantor or the Company, but is without independent check or verification
except as specified.
(c) Xxxxxxxxxx-Xxxxx & Co. shall have furnished to the Underwriters
their written opinion, as Israeli counsel to the Guarantor, addressed to the
Underwriters and dated such Delivery Date, in form and substance satisfactory to
the Underwriters, to the effect that:
(i) The Guarantor has been duly incorporated, is validly
existing as a corporation under the laws of Israel;
(ii) All outstanding shares of capital stock of the
Significant Subsidiaries that are organized in Israel are owned by the
Guarantor either directly or through wholly owned subsidiaries free
and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances except as would not have a
Material Adverse Effect;
20
(iii) The Guarantor has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Guarantor have been duly and validly authorized;
(iv) The statements in the Prospectus under the caption
"Description of Ordinary Shares" insofar they purport to summarize the
provisions of the Ordinary Shares are accurate and complete in all
material respects;
(v) The execution, delivery and performance of this Agreement
and the Indenture and the issuance of the Securities and the
Conversion Securities and the deposit of the Ordinary Shares being
deposited with the Depositary and the consummation of the transactions
contemplated hereby and thereby will not conflict with, result in a
breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or asset of the Guarantor pursuant to,
(i) the memorandum of association or the articles of association of
the Guarantor; (ii) except as would not have a Material Adverse
Effect, the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, or covenant or instrument to which the Guarantor is a party
or bound or to which its or their property is subject; or (iii) any
Israeli statute, law, rule, regulation, judgment, order or decree
applicable to the Guarantor of any Israeli court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Guarantor or any of its
properties; and, except the filing of Reports with the Israel
Securities Authority, the Tel Aviv Stock Exchange and the Companies
Registrar that may be required to be made after the Closing Date, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
and the Indenture by the Guarantor and the issuance of the Securities
and the Conversion Securities and the consummation of the transactions
contemplated hereby and thereby;
(vi) The Ordinary Shares issuable upon conversion of the
Debentures that are authorized on the date hereof have been duly
authorized and reserved by the board of directors of the Guarantor for
issuance upon conversion of the Securities and are free of preemptive
rights pursuant to the Guarantor's memorandum of association or
articles of association, the laws of Israel, or any agreement actually
known to such counsel; and the Conversion Securities, when so issued,
deposited and delivered upon such conversion in accordance with the
terms of the Indenture, will be duly and validly authorized and
issued, fully paid and nonassessable;
(vii) Other than as set forth in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase from the
Guarantor, or any restriction upon the voting or transfer of, any
Ordinary Shares (or ADSs representing Ordinary Shares) pursuant to the
Guarantor's memorandum of association or articles of association, the
laws of Israel or any agreement actually known to such counsel;
21
(viii) To the knowledge of such counsel and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Guarantor is a party or of which any
property or assets of the Guarantor is the subject which, if
determined adversely to the Guarantor, would have a Material Adverse
Effect; and, to the actual knowledge of such counsel, no such
proceedings are overtly threatened or contemplated by governmental
authorities or threatened by others;
(ix) The Guarantor has all necessary corporate right, power
and authority to execute and deliver each of the Operative Documents
to which it is a party and to perform its obligations thereunder and
to issue, sell and deliver the Guarantees and the Conversion
Securities to the Underwriters;
(x) This Agreement has been duly authorized, executed and
delivered by the Guarantor;
(xi) The Indenture has been duly authorized, executed and
delivered by the Guarantor;
(xii) The Guarantees have been duly authorized, executed and
delivered by the Guarantor; and
(xiii) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Guarantor and any
person granting such person the right (other than rights which have
been waived or satisfied) to require the Guarantor to file a
registration statement under the Securities Act with respect to any
securities of the Guarantor owned or to be owned by such person or to
require the Guarantor to include such securities in any securities
being registered pursuant to any registration statement filed by the
Guarantor under the Securities Act.
(xiv) The Deposit Agreement was duly authorized, executed and
delivered by the Guarantor;
(xv) Except as described in the Prospectus, the choice of law
provisions set forth in Section 15 hereof and similar provisions in
the other Operative Agreements are legal, valid and binding under the
laws of Israel and such counsel knows of no reason why the courts of
Israel would not give effect to the choice of New York law as the
proper law of this Agreement and the other Operative Agreements; the
Guarantor has the legal capacity to xxx and be sued in its own name
under the laws of Israel; the Guarantor has the power to submit, and
has irrevocably submitted, to the non-exclusive jurisdiction of the
New York courts and has validly and irrevocably appointed Teva USA as
its authorized agent for the purpose described in Section 14 hereof
and the other Operative Agreements under the laws of Israel; the
irrevocable submission of the Guarantor to the non-exclusive
jurisdiction of the New York courts and the waivers by the Guarantor
of any immunity and any objection to the venue of the proceeding in a
New York
22
court herein are legal, valid and binding under the laws of Israel and
such counsel knows of no reason why the courts of Israel would not
give effect to such submission and waivers; service of process in the
manner set forth in Section 14 hereof and the other Operative
Agreements, will be effective to confer valid personal jurisdiction
over the Guarantor under the laws of Israel; and the courts in Israel
will recognize as valid and final, and will enforce, any final and
conclusive judgment against the Guarantor obtained in a New York court
arising out of or in relation to the obligations of the Guarantor
under this Agreement or the other Operative Agreements;
(xvi) Other than as described in the Prospectus, under the
current laws and regulations of Israel, all dividends and other
distributions declared and payable on the Ordinary Shares may be paid
by the Guarantor to the registered holder thereof in New Israeli
Shekels that may be converted into foreign currency and freely
transferred out of Israel, and, other than as described in the
Prospectus, all such dividends and other distributions made to holders
of the Ordinary Shares who are non-residents of Israel will not be
subject to Israeli income, withholding or other taxes under the laws
and regulations of Israel and are otherwise free and clear of any
other tax, duty withholding or deduction in Israel and without the
necessity of obtaining any governmental authorization in Israel;
(xvii) No stamp or other issuance or transfer taxes or duties
and no capital gains, income, withholding or other taxes are payable
by or on behalf of the Underwriters to Israel or to any political
subdivision or taxing authority thereof or therein in connection with
(A) the deposit with the Depositary of the Conversion Securities
against issuance of the ADRs evidencing the ADSs or (B) the sale and
delivery by the Underwriters of the Securities as contemplated herein;
and
(xviii) To the knowledge of such counsel, but without inquiring
into dockets of any court, commission, regulatory body, administrative
agency or other government body, and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to
which the Guarantor is a party or of which any property or assets of
the Guarantor is the subject which, if determined adversely to the
Guarantor, would have a Material Adverse Effect;
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the laws of Israel typically applicable to
transactions of the type contemplated by the Operative Documents and in
respect of matters of fact, upon certificates of officers of the Guarantor.
In addition, for purposes of its opinion in clauses (ii), (v)(ii) and
(xiii), such counsel may rely solely on the opinion of the General Counsel
of the Guarantor, without any inquiry by such counsel, which opinion of the
General Counsel to the Guarantor shall permit the Underwriters to rely on
such opinion. Such counsel shall additionally have furnished to the
Underwriters a written statement, addressed to the Underwriters and dated
such Delivery Date, in form and substance reasonably satisfactory to the
Underwriters, to the effect that, although such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
23
contained in the Prospectus (except as provided in clause (iv)), nothing
has come to the attention of such counsel that would lead such counsel to
believe that on the Effective Time the Registration Statement contained any
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements therein not misleading or that the
Prospectus as of its date and on the Delivery Date included or includes any
untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no view as to the financial statements and other
financial information or financial data included therein) With respect to
such statements, such counsel may state that its belief is based upon its
participation in the preparation of the Prospectus and any amendments or
supplements thereto and documents incorporated therein by reference,
certificates of officers of the Guarantor and of state authorities and
discussion of the contents thereof with officers of the Guarantor, but is
without independent check or verification except as specified.
(f) Xxxxxxx X. Xxxxx, Vice President and General Counsel of Teva
North America, shall have furnished to the Underwriters his written opinion
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) Except as would not have a Material Adverse Effect, to the
best knowledge of such counsel after due inquiry, Teva USA and
Novopharm possess all approvals, permits and other authorizations as
are necessary under the Food, Drug and Cosmetic Act, and the
Controlled Substance Act and the rules and regulations adopted under
such Act to conduct their respective businesses within the United
States as described in the Prospectus, and
(ii) To the best knowledge of such counsel after due inquiry,
neither Teva USA nor Novopharm has received any notice of proceedings
relating to the revocation or modification of any such approvals,
permits and other authorizations which, if subject to an unfavorable
decision, ruling or finding, would have a Material Adverse Effect.
(g) Cleary, Gottlieb, Xxxxx & Xxxxxxxx and Meitar, Liquornick, Geva &
Co. shall have furnished to the Underwriters their written opinions, as U.S. and
Israeli counsel, respectively, to the Underwriters, addressed to the
Underwriters and dated such Delivery Date, in form and substance satisfactory to
the Underwriters.
(h) With respect to the letter or letters of Xxxxxxxxx & Xxxxxxxxx
delivered to the Underwriters concurrently with the execution of this Agreement
(the "initial letter"), the Company and the Guarantor shall have furnished to
the Underwriters a letter or letters (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements relating
to the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter(s) (or, with
respect to matters involving changes or developments since the
24
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter(s)), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letter(s) and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letter(s).
(i) The Company shall have furnished to the Underwriters on such
Delivery Date a certificate, dated such Delivery Date and delivered on behalf of
the Company by one of its managing directors or a duly authorized
attorney-in-fact, in form and substance satisfactory to the Underwriters, to the
effect that the representations, warranties and agreements of the Company in
Section 1 are true and correct as of the date given and as of such Delivery
Date; and the Company has complied in all material respects with all its
agreements contained herein to be performed prior to or on such Delivery Date.
(j) The Guarantor shall have furnished to the Underwriters on such
Delivery Date a certificate, dated such Delivery Date and delivered on behalf of
the Guarantor by (i) its chief executive officer or chief operating officer and
(ii) its chief financial officer, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) The representations, warranties and agreements of the
Guarantor in Section 1 are true and correct as of the date given and
as of such Delivery Date; and the Guarantor has complied in all
material respects with all its agreements contained herein to be
performed prior to or on such Delivery Date;
(ii) (A) Except as would not have a Material Adverse Effect, the
Guarantor has not sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, except (x) as set forth or contemplated in the
Prospectus and (y) for operating losses incurred in the ordinary
course of business, or (B) since such date there has not been any
change in the capital stock or long-term debt of the Guarantor (except
for issuances of shares of Ordinary Shares upon exercise of
outstanding options described in the Prospectus or pursuant to
Authorized Grants), or any change, or any development involving a
prospective change, that would have a Material Adverse Effect; and
(iii) Such officer has carefully examined the Prospectus and, in
such officer's opinion (A) the Prospectus, as of its date, did not
include any untrue statement of a material fact and did not 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 (B) since the date of the Prospectus, no event has
occurred which should have been set forth in a supplement or amendment
to the Prospectus.
25
(k) The Indenture shall have been duly executed and delivered by the
Company, the Guarantor and the Trustee and the Securities shall have been duly
executed and delivered by the Company and the Guarantor and duly authenticated
by the Trustee.
(l) (i) The Company, at any time since its formation, and the
Guarantor, since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus (exclusive of any amendment or
supplement thereto) shall not have sustained any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, which, in each case, is materially adverse to the Guarantor or its
subsidiaries, except (A) as set forth or contemplated in the Prospectus
(exclusive of any amendment or supplement thereto) and (B) for operating losses
incurred in the ordinary course of business, or (ii) (x) with respect to the
Company, since the date on which it became an indirect wholly owned subsidiary
of the Guarantor, and (y) with respect to the Guarantor, since the date of the
most recent audited financial statements included or incorporated by reference
in the Prospectus, there shall not have been any change in such entity's
respective capital stock or long-term debt (except for issuances of Ordinary
Shares upon exercise of outstanding options described in the Prospectus
(exclusive of any amendment or supplement thereto) or pursuant to Authorized
Grants) or as otherwise described in the Prospectus, or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company or the Guarantor, except as set
forth or contemplated in the Prospectus (exclusive of any amendment or
supplement thereto), the effect of which, in any such case described in clause
(i) or (ii), is, in the reasonable judgment of the Underwriters, so material and
adverse as to make it impracticable or inadvisable to proceed with the sale or
the delivery of the Securities being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus (exclusive of any
amendment or supplement thereto).
(m) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq or the
over-the-counter market, or trading in any securities of the Guarantor
on any exchange shall have been suspended or minimum prices shall have
been established on any such exchange or market by the Commission, by
such exchange or by any other regulatory body or governmental
authority having jurisdiction;
(ii) a banking moratorium shall have been declared by United
States federal or New York State authorities;
(iii) the United States shall have become engaged in hostilities,
there shall have been an escalation in hostilities involving the
United States, or there shall have been a declaration of a national
emergency or war by the United States; or
26
(iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
or Israel shall be such) as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with the
offering or delivery of the Securities being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(n) Any review of the offering by the National Association of
Securities Dealers, Inc. shall have been completed.
(o) The Company and the Guarantor shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request to evidence compliance with the
conditions set forth in this Section 5.
(p) All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel to the Underwriters.
6. Representations, Warranties and Agreements of Underwriters. Each
Underwriter, severally and not jointly, agrees with the Company that:
(a) It has not offered or sold and, prior to the expiry of a period
of six months from the closing date, it will not offer or sell any shares of
common stock included in this offering to persons in the United Kingdom except
to persons whose ordinary activities involve them acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995;
(b) It has only communicated and caused to be communicated and will
only communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of section 21 of the Financial
Services and Markets Act 2000 ("FSMA")) received by it in connection with the
issue or sale of any shares of common stock included in this offering in
circumstances in which section 21(1) of the FSMA does not apply to us; and
(c) It has complied and will comply with all applicable provisions of
the FSMA with respect to anything done by it in relation to the shares of common
stock included in this offering in, from or otherwise involving the United
Kingdom.
(d) Any offers in Canada will be made only under an exemption from
the requirements to file a prospectus in the relevant province of Canada in
which the sale is made.
7. Indemnification and Contribution.
(a) The Company and the Guarantor, jointly and severally, shall
indemnify and hold harmless each Underwriter, its officers and employees and
each person, if any, who
27
controls any Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the Securities), to which
that Underwriter, officer, employee or controlling person may become subject,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in (A) the Prospectus, the Preliminary
Prospectus or the Registration Statement, or in any amendment or
supplement thereto or (B) any blue sky application or other document
prepared or executed by the Company or the Guarantor (or based upon
any written information furnished by the Company or the Guarantor)
filed in any jurisdiction specifically for the purpose of qualifying
any or all of the Securities under the securities laws of any state or
other jurisdiction (such application, document or information being
hereinafter called a "Blue Sky Application") or
(ii) the omission or alleged omission to state therein any
material fact necessary to make the statements therein not misleading,
and shall reimburse each Underwriter and each such officer, employee and
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, officer, employee or controlling person
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that neither the Company nor the Guarantor shall be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Prospectus or the Registration Statement, or in any such amendment or
supplement, or in any Blue Sky Application in reliance upon and in conformity
with the written information furnished to the Company or the Guarantor by or on
behalf of any Underwriter specifically for inclusion therein and described in
Section 7(e); provided, further, that as to any Preliminary Prospectus, this
indemnity agreement shall not inure to the benefit of any Underwriter, its
officers or employees or any person controlling that Underwriter on account of
any loss, claim, damage, liability or action arising from the sale of Securities
to any person by that Underwriter if that Underwriter failed to send or give a
copy of the Prospectus, as the same may be amended or supplemented, to that
person, and the untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact in such Preliminary
Prospectus was corrected in the Prospectus, unless such failure resulted from
non-compliance by the Company with Section 3(c) with respect to the furnishing
of copies of the Prospectus. The foregoing indemnity agreement is in addition to
any liability which the Company or the Guarantor may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless, each of the Company and the Guarantor, its officers and
directors, and each person, if any, who controls the Company or the Guarantor
within the meaning of the Securities Act from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Company or the Guarantor or their respective directors, officers or
controlling
28
persons may become subject, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or in any amendment or
supplement thereto, or in any Blue Sky Application, or
(ii) the omission or alleged omission to state therein any
material fact necessary to make the statements therein not misleading,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the written information furnished to the Company or the
Guarantor by or on behalf of that Underwriter specifically for inclusion therein
and described in Section 7(e), and shall reimburse the Company and the Guarantor
and any such director, officer or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by the Company or the Guarantor
or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company, the Guarantor or any such director, officer or
controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, 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 which it may have under this Section 7 except to the extent it has
been materially prejudiced by such failure; and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 7.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Underwriters shall have the right to employ counsel to represent jointly the
Underwriters and their respective officers, employees and controlling persons
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Company under this
Section 7, if the Underwriters shall have reasonably concluded that there may be
one or more legal defenses available to the Underwriters and their respective
officers, employees and controlling persons that are different from or
additional to those available to the Company and the Guarantor and their
respective officers, employees and controlling persons, and the reasonable fees
and expenses of a single separate counsel shall be paid, jointly and severally,
by the Company and the Guarantor. No indemnifying party shall:
29
(i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld) settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or
(ii) be liable for any settlement of any such action effected
without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from
and against any loss of liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 7 shall for
any reason be unavailable or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof:
(i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and the Guarantor on the one
hand and the Underwriters on the other from the offering of the
Securities, or
(ii) if the allocation provided by clause 7(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 7(d)(i)
but also the relative fault of the Company and the Guarantor on the
one hand and the Underwriters on the other with respect to the
statements or omissions or alleged statements or alleged omissions
that resulted in such loss, claim, damage or liability (or action in
respect thereof), as well as any other relevant equitable
considerations.
The relative benefits received by the Company and the Guarantor on the one hand
and the Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses) received
by the Company on the one hand, and the total discounts and commissions received
by the Underwriters with respect to the Securities purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the Securities under this Agreement, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or the Guarantor on the one hand or the Underwriters on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantor and
30
the Underwriters agree that it would not be just and equitable if the amount of
contributions pursuant to this Section 7(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 7(d) shall be
deemed to include, for purposes of this Section 7(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Securities resold by it in the initial placement of such Securities including
any Optional Securities for which the initial placement occurs after the First
Delivery Date were offered to investors exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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. The Underwriters' obligations to
contribute as provided in this Section 7(d) are several in proportion to their
respective purchase obligations and not joint.
(e) The Underwriters severally confirm that the statements with
respect to the offering of the Securities set forth on the cover page of the
Prospectus and the Preliminary Prospectus and the third paragraph, the second
and third sentences in the seventh paragraph, the eighth paragraph and the
allocation table under the caption "Underwriting" in the Prospectus and the
Preliminary Prospectus are correct and constitute the only information furnished
in writing to the Company and the Guarantor by or on behalf of the Underwriters
specifically for inclusion in the Preliminary Prospectus and Prospectus.
8. Defaulting Underwriters.
If, on any Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the aggregate principal amount of
such series of Securities which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the total
aggregate principal amount of such series of Securities set opposite the name of
each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total aggregate principal amount of such series of Securities set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any such series of Securities on such Delivery Date if the
total aggregate principal amount of such series of Securities which the
defaulting Underwriters agreed but failed to purchase on such date exceeds 9.09%
of the total aggregate principal amount at maturity of such series of Securities
to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the aggregate
principal amount at maturity of any series of Securities which it agreed to
purchase on such Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other purchasers satisfactory to the Underwriters who so agree, shall have
the right, but shall not be obligated, to purchase on such Delivery Date, in
such proportion as may be agreed upon among them, the total
31
aggregate principal amount of any series of Securities to be purchased on such
Delivery Date. If the remaining Underwriters or other purchasers satisfactory to
the Underwriters do not elect to purchase on such Delivery Date the aggregate
principal amount of the series of Securities which the defaulting Underwriters
agreed but failed to purchase, this Agreement (or with respect to the Optional
Delivery Date, the obligation of the Underwriters to purchase the Optional
Securities) shall terminate without liability on the part of any non-defaulting
Underwriters and the Company and the Guarantor, except that the Company and the
Guarantor will continue to be liable for the payment of expenses to the extent
set forth in Sections 4 and 9. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 8, purchases any series of Securities which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
purchasers are obligated or agree to purchase the Securities of a defaulting or
withdrawing Underwriter, either the remaining non-defaulting Underwriters or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes in the Prospectus or in any other document or
arrangement that, in the opinion of counsel to the Company and the Guarantor or
counsel to the Underwriters, may be necessary.
9. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Securities if, prior to that time, any
of the events described in Sections 5(l) and (m) shall have occurred or if the
Underwriters shall decline to purchase the Securities for any reason permitted
under this Agreement.
10. Reimbursement of Underwriters' Expenses. If (a) the Company and
the Guarantor shall fail to tender the Securities for delivery to the
Underwriters for any reason permitted under this Agreement or (b) the
Underwriters shall decline to purchase the Securities because of any failure or
refusal on the part of the Company or the Guarantor to comply with the terms or
to fulfill any of the conditions of this Agreement or if the Company or the
Guarantor shall be unable to perform its obligations under this Agreement, the
Company and the Guarantor, jointly and severally, shall reimburse the
Underwriters for the fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been incurred by them in connection with
this Agreement and the proposed purchase of the Securities, and upon demand the
Company shall pay the full amount thereof to the Underwriters. If this Agreement
is terminated pursuant to Section 8 by reason of the default of one or more
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters or the Representatives, shall be
delivered or sent by mail, telex or facsimile transmission to Xxxxxx
Brothers Inc., 000 Xxxxxxx Xxx., Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department (Fax: 0-000-000-0000); and
32
(b) if to the Guarantor, shall be delivered or sent by mail,
telex or facsimile transmission to Teva Pharmaceutical Industries
Limited, 0 Xxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxx Xxxxx 00000, Israel,
Attention: Uzi Karniel (Fax: 000-0-000-0000), with copies to: (i) Teva
Pharmaceutical Industries Limited, 0 Xxxxx Xxxxxx, X.X. Xxx 0000,
Xxxxxx Xxxxx 00000, Israel, Attention: Xxx Xxxxxxxxx; and (ii) Xxxxxxx
Xxxx & Xxxxxxxxx LLP, 000 0/xx/ Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxx (Fax: (000) 000-0000);
(c) if to the Company, shall be delivered or sent by mail,
telex, or facsimile transmission to Teva Pharmaceutical Finance II,
LLC, c/o Teva Pharmaceuticals USA, Inc., 0000 Xxxxxxx Xxxx, Xxxxx
Xxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx (Fax: (215)
591-8813), with a copy to Xxxxxxx Xxxx & Xxxxxxxxx LLP, 000 0/xx/
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxx (Fax:
(000) 000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 7(c)
shall be delivered or sent by mail, telex or facsimile transmission to each such
Underwriter, which address will be supplied to any other party hereto by Xxxxxx
Brothers Inc. upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Company and the Guarantor
shall be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Underwriters by Xxxxxx Brothers Inc.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Guarantor and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements of the Company and
the Guarantor contained in this Agreement shall also be deemed to be for the
benefit of the officers and employees of each Underwriter and the person or
persons, if any, who control each Underwriter within the meaning of Section 15
of the Securities Act and any indemnity agreement of the Underwriters contained
in Section 7(b) of this Agreement shall be deemed to be for the benefit of
directors, officers and employees of the Company and the Guarantor, and any
person controlling the Company or the Guarantor within the meaning of Section 15
of the Securities Act. Nothing contained in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Section 12, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
13. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Guarantor and the Underwriters contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
of them or any person controlling any of them.
14. Jurisdiction. The Guarantor agrees that any suit, action or
proceeding against the Guarantor brought by any Underwriter, the directors,
officers, employees and agents of any Underwriter, or by any person who controls
any Underwriter, arising out of or based upon this
33
Agreement or the transactions contemplated hereby may be instituted in any State
or Federal court in The City of New York, New York, and waives any objection
which it may now or hereafter have to the laying of venue of any such
proceeding, and irrevocably submits to the non-exclusive jurisdiction of such
courts in any suit, action or proceeding. The Guarantor has appointed Teva USA
as its authorized agent (the "Authorized Agent") upon whom process may be served
in any suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated herein which may be instituted in any State or
Federal court in The City of New York, New York, by any Underwriter, the
directors, officers, employees and agents of any Underwriter, or by any person
who controls any Underwriter, and expressly accepts the non-exclusive
jurisdiction of any such court in respect of any such suit, action or
proceeding. The Guarantor hereby represents and warrants that the Authorized
Agent has accepted such appointment and has agreed to act as said agent for
service of process, and the Guarantor agrees to take any and all action,
including the filing of any and all documents that may be necessary to continue
such appointment in full force and effect as aforesaid. Service of process upon
the Authorized Agent shall be deemed, in every respect, effective service of
process upon the Guarantor. Notwithstanding the foregoing, any action arising
out of or based upon this Agreement may be instituted by any Underwriter, the
directors, officers, employees and agents of any Underwriter, or by any person
who controls any Underwriter, in any court of competent jurisdiction in Israel.
15. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
16. Currency. Each reference in this Agreement to U.S. dollars (the
"relevant currency") is of the essence. To the fullest extent permitted by law,
the obligation of the Company and the Guarantor in respect of any amount due
under this Agreement will, notwithstanding any payment in any other currency
(whether pursuant to a judgment or otherwise), be discharged only to the extent
of the amount in the relevant currency that the party entitled to receive such
payment may, in accordance with its normal procedures, purchase with the sum
paid in such other currency (after any premium and costs of exchange) on the
Business Day immediately following the day on which such party receives such
payment. If the amount in the relevant currency that may be so purchased for any
reason falls short of the amount originally due, the Company and the Guarantor
will pay such additional amounts, in the relevant currency, as may be necessary
to compensate for the shortfall. Any obligation of the Company or the Guarantor
not discharged by such payment will, to the fullest extent permitted by
applicable law, be due as a separate and independent obligation and, until
discharged as provided herein, will continue in full force and effect.
17. Waiver of Immunity. To the extent that the Guarantor has or
hereafter may acquire any immunity (sovereign or otherwise) from any legal
action, suit or proceeding, from jurisdiction of any court or from set-off or
any legal process (whether service or notice, attachment in aid or otherwise)
with respect to itself or any of its property, the Guarantor hereby irrevocably
waives and agrees not to plead or claim such immunity in respect of its
obligations under this Agreement.
34
18. Definitions The terms which follow, as used in this Agreement,
have the meanings indicated:
"Base Prospectus" means the prospectus contained in the Registration Statement
at the Effective Time, including any preliminary prospectus.
"Business Day" means any day on which the New York Stock Exchange, Inc. is open
for trading.
"Effective Time" means the date and the time as of which the Registration
Statement was declared effective by the Commission.
"Execution Time" means the date and time that this Agreement is executed and
delivered by the parties hereto.
"Incorporated Documents" means documents that are incorporated into any of the
Registration Statement, Prospectus or Preliminary Prospectus by reference.
"Preliminary Prospectus" shall mean any preliminary prospectus supplement to the
Base Prospectus which describes the Securities and the offering thereof and is
used prior to filing of the final Prospectus, together with the Base Prospectus.
"Prospectus" means the prospectus and prospectus supplement filed with the
Commission by the Company and the Guarantor with the consent of Xxxxxx Brothers
pursuant to Rule 424(b) of the Rules and Regulations relating to the Securities
in the form first used to confirm sales of the Securities, and any Incorporated
Documents with respect thereto incorporated as of the Execution Time.
"Prospectus Supplement" means the prospectus supplement filed with the
Commission by the Company and the Guarantor pursuant to Rule 424(b) of the Rules
and Regulations relating to the Securities in the form first used to confirm
sales of the Securities.
"Registration Statement" means the Registration Statement of the Company and the
Guarantor filed with the Commission on Form S-3 (File No. 333-111144), including
exhibits other than Forms T-1 and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which
it shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective prior to the
First Delivery Date, means also such registration statement as so amended or
such Rule 462(b) Registration Statement, as the case may be. This term will
include any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A of the Rules and Regulations.
"Rule 430A Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A of the Rules and Regulations.
35
"Rule 462(b) Registration Statement" means a registration statement and any
amendments thereto filed pursuant to Rule 462(b) of the Rules and Regulations
relating to the offering covered by the registration statement.
"subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
36
If the foregoing correctly sets forth the agreement between the
Company, the Guarantor and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
Teva Pharmaceutical Industries Limited
By
--------------------------------------
Name:
Title:
By
--------------------------------------
Name:
Title:
Teva Pharmaceutical Finance II, LLC
By
--------------------------------------
Name:
Title:
Xxxxxx Brothers Inc.
Credit Suisse First Boston LLC
Citigroup Global Marketes Inc.
By: Xxxxxx Brothers Inc.
By:
-------------------------------------
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule I to the
foregoing Agreement.
38
SCHEDULE 1
Principal Amount Principal Amount
of Series A Firm of Series B Firm
Underwriters Securities Securities
---------------------------------------- ---------------- ----------------
Xxxxxx Brothers Inc. ................... $ 160,000,000 $ 240,000,000
Credit Suisse First Boston LLC.......... 89,600,000 134,400,000
Citigroup Global Markets Inc. .......... 70,400,000 105,600,000
Banc of America Securities LLC.......... 20,000,000 30,000,000
Deutsche Bank Securities Inc. .......... 20,000,000 30,000,000
Xxxxxxx, Xxxxx & Co. ................... 20,000,000 30,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated........................... 20,000,000 30,000,000
Total................................ $ 400,000,000 $ 600,000,000
==================================
