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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 2
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COPLEY PHARMACEUTICAL, INC.
(Name of Subject Company)
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
TEVA PHARMACEUTICALS USA, INC.
CARIBOU MERGER CORPORATION
(Bidders)
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COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
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21745K101
(CUSIP Number of Class of Securities)
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WILLIAM FLETCHER
TEVA PHARMACEUTICALS USA, INC.
650 CATHILL ROAD
SELLERSVILLE, PENNSYLVANIA 18960
(215) 256-8400
(Name, Address and Telephone Number of Person
authorized to Receive Notices and Communications
on Behalf of the Bidder)
WITH A COPY TO:
PETER H. JAKES, ESQ.
WILLKIE FARR & GALLAGHER
787 SEVENTH AVENUE
NEW YORK, NEW YORK 10019-6099
TELEPHONE: (212) 728-8000
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This Amendment No. 2 amends and supplements the Tender Offer Statement
on Schedule 14D-1 (as amended, the "Statement") filed with the Securities and
Exchange Commission on August 16, 1999 by Caribou Merger Corporation, a Delaware
corporation ("Purchaser"), as amended by Amendment No. 1 thereto filed on August
26, 1999, relating to the offer by Purchaser to purchase of all of the
outstanding shares of common stock, par value $.01 per share, of Copley
Pharmaceutical, Inc., a Delaware corporation (the "Company"), at $11.00 per
share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated August 16, 1999 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer").
Purchaser is a wholly owned subsidiary of Teva Pharmaceuticals USA, Inc., a
Delaware corporation ("Teva USA"), and was formed solely to effect the Offer and
the transactions contemplated thereby. Teva USA is an indirect wholly owned
subsidiary of Teva Pharmaceutical Industries Limited, a corporation organized
under the laws of Israel ("Teva").
Unless otherwise indicated herein, each capitalized term used but not
defined herein shall have the meaning assigned to such term in the Offer to
Purchase.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Item 4 is hereby amended and supplemented
by the following:
On September 13, 1999, Teva, Teva USA and Bank Leumi USA entered into a
credit agreement pursuant to which Bank Leumi USA agreed to provide up to $115
million of financing to be used in connection with the Offer and the Merger. A
copy of this credit agreement is set forth as Exhibit (b)(3) and is incorporated
by reference herein.
On September 13, 1999, Teva, Teva USA and Bank Hapoalim B.M. entered
into a loan agreement pursuant to which Bank Hapoalim B.M. agreed to provide up
to $115 million of financing to be used in connection with the Offer and the
Merger. A copy of this loan agreement is set forth as Exhibit (b)(8) and is
incorporated by reference herein.
ITEM 6. INTEREST IN SECURITIES OF SUBJECT COMPANY.
The information set forth in Item 6 is hereby amended and supplemented
by the following:
The Offer expired at 12:00 midnight, New York City time, on Monday,
September 13, 1999. Based on information provided by the Depositary,
approximately 18,907,591 Shares or 97.7% of the outstanding Shares were validly
tendered and not withdrawn pursuant to the Offer (including approximately
561,379 Shares tendered by means of guaranteed delivery). Purchaser has accepted
for payment and has notified the Depositary to promptly pay for the tendered and
accepted Shares in accordance with the terms and subject to the conditions set
forth in the Offer. On September 14, 1999, Teva issued a press release, the text
of which is set forth as Exhibit (a)(9) and is incorporated by reference herein.
2
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ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(9) Press Release of Teva, dated September 14, 1999.
(b)(3) Credit Agreement, dated September 13, 1999, among Teva, Teva USA and Bank
Leumi USA.
(b)(4) Promissory Note, dated September 13, 1999, executed by Teva USA in favor
of Bank Leumi USA.
(b)(5) Guaranty, dated September 13, 1999, executed by Teva in favor of Bank
Leumi USA.
(b)(6) Negative Pledge Letter, dated September 13, 1999, executed by Teva in
favor of Bank Leumi USA.
(b)(7) Negative Pledge Letter, dated September 13, 1999, executed by Teva USA in
favor of Bank Leumi USA.
(b)(8) Loan Agreement, dated September 13, 1999, among Teva, Teva USA and Bank
Hapoalim B.M.
(b)(9) Guaranty, dated September 13, 1999, executed by Teva in favor of Bank
Hapoalim B.M.
3
<PAGE> 4
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: September 14, 1999
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
By: /s/ Dan S. Suesskind
------------------------------------------
Name: Dan S. Suesskind
Title: Chief Financial Officer
TEVA PHARMACEUTICALS USA, INC.
By: /s/ Peter R. Terreri
------------------------------------------
Name: Peter R. Terreri
Title: Senior Vice President, Financing &
Manufacturing
CARIBOU MERGER CORPORATION
By: /s/ Peter R. Terreri
------------------------------------------
Name: Peter R. Terreri
Title: Vice President
4
<PAGE> 5
INDEX TO EXHIBITS
EXHIBIT
(a)(9) Press Release of Teva, dated September 14, 1999.
(b)(3) Credit Agreement, dated September 13, 1999, among Teva, Teva USA and Bank
Leumi USA.
(b)(4) Promissory Note, dated September 13, 1999, executed by Teva USA in favor
of Bank Leumi USA.
(b)(5) Guaranty, dated September 13, 1999, executed by Teva in favor of Bank
Leumi USA.
(b)(6) Negative Pledge Letter, dated September 13, 1999, executed by Teva in
favor of Bank Leumi USA.
(b)(7) Negative Pledge Letter, dated September 13, 1999, executed by Teva USA in
favor of Bank Leumi USA.
(b)(8) Loan Agreement, dated September 13, 1999, among Teva, Teva USA and Bank
Hapoalim B.M.
(b)(9) Guaranty, dated September 13, 1999, executed by Teva in favor of Bank
Hapoalim B.M.
5
<PAGE> 1
Exhibit (a)(9)
COMPANY CONTACT:
DAN SUESSKIND
CHIEF FINANCIAL OFFICER
TEVA PHARMACEUTICAL INDUSTRIES, LTD.
(011) 972-25-892-811
INVESTOR RELATIONS CONTACTS:
DONNA N. STEIN/CINDY REID/JILL MELESKI
MORGEN-WALKE ASSOCIATES, INC.
(212) 850-5600
PRESS CONTACT:
GREGORY TIBEREND
MORGEN-WALKE ASSOCIATES, INC.
(212) 850-5600
TEVA PHARMACEUTICAL INDUSTRIES LIMITED ANNOUNCES
COMPLETION OF TENDER OFFER FOR COPLEY PHARMACEUTICAL, INC.
JERUSALEM, ISRAEL, SEPTEMBER 14, 1999 -- TEVA PHARMACEUTICAL INDUSTRIES LIMITED
(NASDAQ: TEVA) announced today that its indirect wholly owned subsidiary
Caribou Merger Corporation has accepted for payment approximately 18,900,000
shares of common stock of Copley Pharmaceutical, Inc. (Nasdaq: CPLY),
representing approximately 93.8% of the outstanding shares of Copley
Pharmaceutical, Inc. (including approximately 550,000 tendered by means of
guaranteed delivery), at $11.00 per share in cash in accordance with its tender
offer for all outstanding shares of Copley Pharmaceutical, Inc. Approximately
1,250,000 shares of Copley Pharmaceutical, Inc. were not tendered and remain
outstanding. The tender offer expired at 12:00 Midnight, New York City time on
Monday, September 13, 1999.
Teva Pharmaceutical Industries Limited intends to promptly merge Caribou Merger
Corporation with and into Copley Pharmaceutical, Inc. in accordance with
Delaware's short form merger provisions. As a result of the merger, Copley
Pharmaceutical, Inc. will become a wholly owned subsidiary of Teva
Pharmaceuticals USA, Inc. and each remaining outstanding share of Copley
Pharmaceutical, Inc. will be converted, subject to appraisal rights, into the
right to receive $11.00 in cash, without interest.
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Copley Pharmaceutical, Inc. develops, manufactures, markets and distributes a
broad range of multi-source pharmaceutical products. These products include
prescription and over-the-counter drugs and are available in a variety of
dosage forms consisting of tablets, solutions, suspensions, syrups, elixirs,
jellies, creams, ointments and powders.
Teva Pharmaceutical Industries Limited is a fully integrated pharmaceutical
company producing drugs in all major therapeutic categories, with a leading
presence in the U.S. generics market. As the largest pharmaceutical company in
Israel, Teva Pharmaceutical Industries Limited has successfully utilized its
integrated production and research capabilities to establish a worldwide
pharmaceutical business focusing on the growing demand for generic drugs and
the opportunities for proprietary branded products for niche therapeutic
categories. Through its indirect wholly owned subsidiary Teva Pharmaceuticals
USA, Inc., Teva Pharmaceuticals Industries Limited is among the leading generic
drug companies in the United States.
Safe Harbor Statement: This release contains forward-looking statements which
express the beliefs and expectations of management. Such statements are based
on current expectations and involve a number of known and unknown risks and
uncertainties that could cause the Company's future results, performance or
achievements to differ significantly from the results, performance or
achievements expressed or implied by such forward-looking statements. Important
factors that could cause or contribute to such differences include the impact
of pharmaceutical industry regulation, the difficulty of predicting FDA and
other regulatory authority approvals, the regulatory environment and changes in
the health policies and structure of various countries, acceptance and demand
for new pharmaceutical products and new therapies, the impact of competitive
products and pricing, the availability and pricing of ingredients used in the
manufacture of pharmaceutical products, uncertainties regarding market
acceptance of innovative products newly launched, currently being sold or in
development, the impact of restructuring of clients, reliance on strategic
alliances, fluctuations in currency, exchange and interest rates, operating
results, the impact of the year 2000 issue and other factors that are discussed
in the Company's Annual Report on Form 20-F and the Company's other filings with
the US Securities and Exchange Commission.
###
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Exhibit (b)(3)
CREDIT AGREEMENT
September 13, 1999
Teva Pharmaceuticals USA, Inc.
650 Cathill Road
Sellersville, Pennsylvania 18960
Teva Pharmaceutical Industries Ltd.
5 Basel Street
Petach Tikva, Israel
Ladies and Gentlemen:
On behalf of Bank Leumi USA (the "Bank"), we are pleased to advise you
that the Bank is prepared to make available to Teva Pharmaceuticals USA, Inc.
("Borrower") for use by its wholly-owned subsidiary Caribou Merger Corporation
("MergerSub") a credit facility, on the terms specified herein, in an aggregate
principal amount of up to $115,000,000 to be used by MergerSub to fund the
acquisition of all of the outstanding Common Stock of Copley Pharmaceutical,
Inc. ("Copley") for a purchase price of $11.00 per share in cash. Such
acquisition will be made pursuant to an Agreement and Plan of Merger among
Borrower, MergerSub and Copley, dated August 9, 1999, a copy of which has
previously been furnished to us (the "Merger Agreement"). The Merger Agreement
contemplates a first step tender offer (the "Offer"). Any Copley shares not
purchased pursuant to the Offer will be acquired in a subsequent merger under
the Merger Agreement (the "Cash Merger") at the same $11.00 per share cash
price. You have advised us that Hoechst Corporation, the holder of approximately
52% of the outstanding Common Stock of Copley has agreed to tender its shares
into the Offer pursuant to a Stockholder Agreement, dated August 9, 1999, a copy
of which has also been furnished to us. The forgoing Offer, Cash Merger and
related transactions are herein called the "Copley Transaction".
Section 1. AGREEMENT TO MAKE LOANS. The Bank (subject to the provisions
of Section 2 hereof and to the terms and conditions of the Promissory Note
referenced in Section 2 hereof) hereby agrees to make loans (the "Loans" and
individually a "Loan") to Borrower from time to time on one or more Business
Days on or prior to December 31, 1999 upon at least three Business Days' written
notice to the Bank in an aggregate amount not to exceed $115,000,000, provided
that each Loan shall be in an amount of at least $10,000,000 and provided
further that Borrower need only
<PAGE> 2
provide two Business Days written notice prior to the initial Loan hereunder.
Section 2. CONDITIONS TO EACH LOAN. The Bank's obligation to make each
Loan on any date (the "Loan Date") is subject to the following conditions:
(i) the Bank shall have received a Promissory Note duly
executed by Borrower in the principal amount of $115,000,000, said
Promissory Note to be substantially in the form of Exhibit A hereto;
(ii) the Bank shall have received an Unlimited Guaranty duly
executed by Teva Pharmaceutical Industries, Ltd. ("Guarantor")
guaranteeing the Loans (including the Loan being made on the Loan
Date), said Unlimited Guaranty to be substantially in the form of
Exhibit B hereto;
(iii) the Bank shall have received a Negative Pledge Letter
duly executed by Guarantor substantially in the form of Exhibit C
hereto (the "Guarantor Negative Pledge Letter") and a Negative Pledge
Letter duly executed by Borrower substantially in the form of Exhibit D
hereto (the "Borrower Negative Pledge Letter" and, together with the
Guarantor Negative Pledge Letter, the "Negative Pledge Letters");
(iv) the Bank shall have received copies (certified to its
satisfaction) of resolutions of the Board of Directors (or an
authorized committee thereof) of each of Borrower and Guarantor
authorizing the execution and delivery of this Agreement, the
Promissory Note, the Unlimited Guaranty, the Negative Pledge Letters
and the consummation of the transactions contemplated hereby;
(v) the Bank shall have received legal opinions from counsel
for each of Borrower and Guarantor in substantially the respective
forms of Exhibits E and F hereto;
(vi) Borrower shall, substantially concurrently with such
Loan, be borrowing an amount equal to the amount of such Loan from Bank
Hapoalim B.M. and for the purpose specified in clause (vii) below;
(vii) Borrower will utilize the proceeds of such Loan to
capitalize MergerSub to provide the cash necessary to fund the Offer
and the Cash Merger, together with expenses incidental to the Copley
Transaction; and
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(viii) on the Loan Date (x) (A) the Borrower shall not be in
default of any of its obligations in any material respect under the
Borrower Negative Pledge Letter and (B) no condition or event shall
have occurred and be continuing which would result in, or which has
resulted in, the acceleration of the Promissory Note (either (A) or
(B), a "Borrower Default") and (y) the Guarantor shall not be in
default of any of its obligations in any material respect under the
Unlimited Guaranty or the Guarantor Negative Pledge Letter (a
"Guarantor Default").
It is understood and agreed by Borrower and Guarantor that requesting a
Loan pursuant to Section 1 hereof and the acceptance of the proceeds thereof on
such Loan Date by Borrower, shall be taken as a representation and warranty from
Borrower and Guarantor that (a) no Borrower Default or Guarantor Default then
exists on the Loan Date and (b) the conditions specified in clauses (vii) and
(viii) of the foregoing sentence have been met.
3. NOTICES. All notices and communications provided for hereunder shall
be in writing and sent (a) by telecopier if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
If to the Bank, to:
Bank Leumi USA
International Lending Department
564 Fifth Avenue, Fifth Floor
New York, NY 10036
Attention: Gil Hershman
Telecopier: 212-626-1072
or at such other address as the Bank shall have specified to Borrower and
Guarantor in accordance with this Section 3.
If to Borrower, to:
Teva Pharmaceuticals USA, Inc.
650 Cathill Road
Sellersville, Pennsylvania 18960
Attention: Peter Terreri
Telecopier: 215-256-7856
or at such other address as Borrower shall have specified to the Bank in
accordance with this Section 3.
If to Guarantor, to:
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<PAGE> 4
Teva Pharmaceutical Industries Ltd.
5 Basel Street
P.O. Box 3190
Petach Tikva, 49131, Israel
Attention: Dan Suesskind
Telecopier: 011-972-2-589-2839
or at such other address as the Guarantor shall have specified to the Bank in
accordance with this Section 3.
4. EXPENSES AND INDEMNITY. Borrower shall reimburse Bank on demand for
any and all costs and expenses incurred by the Bank in connection with the Loans
(including, without limitation, the use of the proceeds thereof) and the
transactions contemplated hereby (whether incurred before or after the date
hereof) including, without limitation, fees and out-of-pocket expenses of
counsel regardless of whether any Loans are made hereunder (unless such failure
is a result of a default of the Bank hereunder). In the event that the Bank
becomes involved in any capacity in any action, proceeding or investigation in
connection with any matter contemplated by this Agreement, the Borrower and the
Guarantor will reimburse the Bank for its legal and other expenses (including
the cost of any investigation and preparation) as they are incurred by the Bank.
The Borrower and the Guarantor also agree to indemnify and hold harmless the
Bank and its affiliates and their respective directors, officers, employees and
agents (the "Indemnified Parties") from and against any and all losses, claims,
damages and liabilities, joint or several, related to or arising out of any
matters contemplated by this Agreement unless and only to the extent that it
shall be finally judicially determined that such losses, claims, damages or
liabilities resulted primarily from the gross negligence or willful misconduct
of the Bank.
5. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
6. ENTIRE AGREEMENT. This letter embodies the entire agreement and
understanding among the Bank, the Borrower and the Guarantor with respect to the
specific matters set forth herein and supersedes all prior agreements and
understandings relating to the subject matter hereof.
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7. GOVERNING LAW. THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAW.
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If you are in agreement with the foregoing, please execute and return
the enclosed copy of this letter whereupon this letter shall become a binding
agreement among us.
Very truly yours,
BANK LEUMI USA
By /s/ Gil Hershman
-------------------------------------
Gil Hershman
Assistant Vice President
By /s/ Michaela Klein
-------------------------------------
Michaela Klein
Senior Vice President
The foregoing is hereby
accepted and agreed to:
Teva Pharmaceuticals USA, Inc.
By /s/ Peter R. Terreri
---------------------------------
Peter R. Terreri
Senior Vice President and
Chief Financial Officer
Teva Pharmaceutical Industries Ltd.
By /s/ Dan Suesskind September 14, 1999
---------------------------------------
Dan Suesskind
Chief Financial Officer
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Exhibit (b)(4)
PROMISSORY NOTE
NEW YORK, N.Y. September 13, 1999
On September 13, 2000 TEVA PHARMACEUTICALS USA, INC. promises to pay to
the order of BANK LEUMI USA ("Bank") the lesser of (x) One Hundred Fifteen
Million Dollars ($115,000,000) and (y) the aggregate unpaid principal amount of
all loans made by the Bank to the maker pursuant to the Credit Agreement dated
as of September 13, 1999 among the maker, the Bank and Teva Pharmaceutical
Industries Ltd. ("Parent") at the Bank at 564 Fifth Avenue, New York, New York
10036.
Payment of principal and interest in respect of the indebtedness
evidenced by this Note shall be junior and subordinate and subject in right of
payment to specified Senior Debt as provided Addendum A attached hereto.
Interest (shall be computed) at a rate per annum which shall be equal
to 1/4% per annum above the Libor Rate (Reserve Adjusted)* for a one, three or
six month term, as elected by the maker and calculated by the Bank, in the
manner hereinafter provided, but in no event in excess of the maximum rate
permitted by applicable law; provided, that in the event the Bank shall have
determined that by reason of circumstances affecting the Libor Rate (Reserve
Adjusted) adequate and reasonable means do not exist for ascertaining the Libor
Rate (Reserve Adjusted) for any Interest Period, or the time remaining to the
stated maturity date of this Note is less than the shortest Interest Period
which may be elected hereunder, then the applicable
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* "Libor Rate" means, relative to any Interest Period (hereinafter defined)
for loans made pursuant to this Note and which bear interest at the "Libor
Rate (Reserve Adjusted)", the rate of interest per annum determined by the
Bank to be the arithmetic mean (rounded upward to the next 1/16th of 1%) of
the rates of interest per annum at which dollar deposits in the approximate
amount of the amount of the loan to be made or continued hereunder by the
Bank and having a maturity comparable to such Interest Period would be
offered to the Bank in the London Interbank market at its request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"Libor Reserve Percentage" means, relative to any Interest Period for loans
hereunder, the percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day (whether or not applicable to the
Bank) under regulations issued from time to time by the Federal Reserve
System Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Federal Reserve System Board).
"Libor Rate (Reserve Adjusted)" means, relative to any loan to be made or
continued hereunder for any Interest Period, the rate of interest per annum
(rounded upwards to the next 1/16th of 1%) determined by the Bank as
follows:
<TABLE>
<CAPTION>
Libor Rate = Libor Rate
---------------------
<S> <C>
(Reserve Adjusted) 1.00 - Libor Reserve Percentage
</TABLE>
<PAGE> 2
rate of interest during such Interest Period shall be equal to the rate of
interest designated by the Bank, and in effect from time to time, as its
"Reference Rate" adjusted when said Reference Rate changes, but in no event in
excess of the maximum rate permitted by law (the maker acknowledges that the
Reference Rate may not necessarily represent the lowest rate of interest charged
by the Bank to customers); further provided that if, at the end of any Interest
Period, the maker has failed to timely notify the Bank of its election of the
choice of interest rate for or length of the next Interest Period, then the
interest rate in effect thereafter shall be at the Libor Rate (Reserve Adjusted)
plus 1/4% per annum for an Interest Period the length of which shall be the same
length as the immediately preceding Interest Period unless such Interest Period
would end after the stated maturity date of this Note, in which case the
Interest Period shall be of a duration equal to the next longest Interest Period
which would end prior to such scheduled maturity date, provided further that no
Libor Rate (Reserve Adjusted)-based loan shall be made less than one month
before the stated maturity date of this Note or after the occurrence and
continuance of an Event of Default or an event which, upon notice, passage of
time or both would constitute an Event of Default. Interest hereunder shall be
payable on the last day of each Interest Period and at maturity (whether by
acceleration or otherwise). The term "Interest Period" as used in this Note
shall mean a period of one, three or six month(s), as elected by the maker by
written or facsimile notice to the Bank given not later than 12:00 noon three
Business Days prior to the commencement of an Interest Period. No Interest
Period shall extend beyond the stated maturity date of this Note. The initial
Interest Period for this Note shall begin on the day of the initial draw down
under the Note, and each subsequent Interest Period shall begin on the last day
of the immediately preceding Interest Period. If an Interest Period would
otherwise end on a day that is not a Business Day, such Interest Period shall
end on the next succeeding Business Day; provided, however, that, if any
Interest Period would otherwise end on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in such month, such
Interest Period shall end on the next preceding Business Day and further
provided that if any Interest Period commences on the last Business Day in a
calendar month or if there is no corresponding day in the calendar month in
which it is to end, then it shall end on the last Business Day in a calendar
month. The Bank shall give notice to the maker of the interest rate determined
for each Interest Period as provided herein, and such notice shall be conclusive
and binding upon the maker for all purposes absent manifest error. The maker
shall pay to the Bank to compensate it for any loss, cost or expense that the
Bank determines is attributable to any prepayment of a loan made by the Bank to
the maker using the Libor Rate (Reserve Adjusted). Such compensation shall be an
amount equal to the excess (if any) of (i) the amount of interest that otherwise
would have accrued on the principal amount so prepaid for the period from the
date of such prepayment to the last day of the then current Interest Period for
such loan at the applicable rate of interest for such loan provided for herein
less (ii) the amount of interest that otherwise would have accrued on such
principal amount from the date of such prepayment until the end of the then
current Interest Period at a rate per annum equal to the interest component of
the amount the Bank would have bid in The London Interbank market for dollar
deposits of leading banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by the
Bank). The term "Business Day" shall mean any day of the year on which the Bank
is open for business (as required or permitted by law or otherwise) and on which
dealings in U.S. dollar deposits are carried on in London, England.
2
<PAGE> 3
If any law, treaty, rule, regulation or determination of a court or
governmental authority or any change therein or in the interpretation or
application thereof (each, a "Change in Law") shall make it unlawful for the
Bank to make Libor Rate (Reserve Adjusted)-based loans, or to maintain interest
rates based on Libor, then in the former event, any obligation of the Bank
contained herein or in any agreement of the Bank to make available such unlawful
Libor Rate (Reserve Adjusted)-based loans shall immediately be canceled, and in
the latter event, any such unlawful Libor Rate (Reserve Adjusted)-based loans
then outstanding shall be converted, at the Bank's option, so that interest on
the outstanding principal balance subject hereto is determined in relation to
the Reference Rate as hereinabove provided; provided however, that if any such
Change in Law shall permit any Libor Rate (Reserve Adjusted)-based loans to
remain in effect until the expiration of the Interest Period applicable thereto,
then such permitted Libor Rate (Reserve Adjusted)-based loans shall continue in
effect until the expiration of such Interest Period. Upon the occurrence of any
of the foregoing events, maker shall pay to the Bank immediately upon demand
such amounts as may be necessary to compensate the Bank for any fines, fees,
charges, penalties or other costs incurred or payable by the Bank as a result
thereof and which are attributable to any Libor Rate (Reserve Adjusted) options
made available to maker hereunder, and any reasonable allocation made by the
Bank among its operations shall be conclusive and binding upon maker.
If any Change in Law or compliance by the Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:
(A) subject the Bank to any tax, duty or other charge with respect
to any Libor Rate (Reserve Adjusted) options, or change the
basis of taxation of payments to the Bank of principal,
interest, fees or any other amount payable hereunder (except
for changes in the rate of tax on the overall net income of
the Bank); or
(B) impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account
of, advances or loans by, or any other acquisition of funds by
any office of the Bank; or
(C) impose on the Bank any other condition;
and the result of any of the foregoing is to increase the cost to the Bank of
making, renewing or maintaining any Libor Rate (Reserve Adjusted)-based loan
hereunder and/or to reduce any amount receivable by the Bank in connection
therewith, then in any such case, maker shall pay to the Bank immediately upon
demand such amounts as may be necessary to compensate the Bank for any
additional costs incurred by the Bank and/or reductions in amounts received by
the Bank which are attributable to such Libor Rate (Reserve Adjusted)-based
loan. In determining which costs incurred by the Bank and/or reductions in
amounts received by the Bank are attributable to any Libor Rate (Reserve
Adjusted)-based loan made to maker hereunder, any reasonable allocation made by
the Bank among its operations shall be conclusive and binding upon maker.
Interest shall be computed on the basis of a 360-day year.
3
<PAGE> 4
The maker shall have the right to prepay this Note in whole or in part
at the end of any Interest Period (but if in part, in the principal amount of
$25,000.00 or any whole multiple thereof), in each case upon not less than 30
days prior written notice to the Bank, without penalty or premium, provided that
on each prepayment the maker shall pay accrued interest on the principal amount
so prepaid to the date of such prepayment, and each partial prepayment shall be
applied to this Note in the inverse order of their stated maturities. The maker
may not reborrow any amount prepaid under this Note.
The Bank is hereby authorized to enter on the schedule attached hereto
the amount of each advance made hereunder and each payment of principal thereon,
without any further authorization on the part of the maker or the guarantor of
this Note, but the Bank's failure to make such entry shall not limit or
otherwise affect the obligation of the maker or the guarantor of this Note. In
the event that any other Liabilities (as hereinafter defined) of maker to the
Bank are due at any time that the Bank receives a payment from maker on account
of this Note or any such other Liabilities of maker, the Bank may apply such
payments to amounts due under this Note or any such other Liabilities in such
manner as the Bank, in its discretion, elects, regardless of any instructions
from maker to the contrary.
The maker authorizes (but shall not require) the Bank to debit any
account maintained by the maker with the Bank, at any date on which the payment
of principal of or interest on any of the Liabilities is due, in an amount equal
to any unpaid portion of such payment. Furthermore, the balance of every account
of the maker with, and each claim of the maker against, the Bank existing from
time to time, shall be subject to be set off against the Liabilities of the
maker, and the Bank may at any time or from time to time at its option and
without notice appropriate and apply toward the payment of the Liabilities the
balance of each account of the maker with, and each such claim of the maker
against the Bank. If the time for payment of principal of or interest on any of
the Liabilities or any other money payable hereunder or with respect to any of
the Liabilities becomes due on a day on which the Bank's offices are closed (as
required or permitted by law or otherwise), such payment shall be made on the
next succeeding business day, and such extension shall be included in computing
interest in connection with such payment. All payments by any maker of this Note
on account of principal, interest or fees hereunder shall be made in lawful
money of the United States of America, in immediately available funds.
The term "Liabilities" shall mean the indebtedness evidenced by this
Note, as same may be extended, renewed or modified from time to time and under
the Credit Agreement executed by the maker and dated September 13, 1999.
The Bank or holder hereof shall not be obligated to exercise any
authority or right granted to it hereunder and shall not be liable for any
action taken or omitted or the manner of taking any action, except for its
willful misconduct, and in no event for consequential damages.
To induce the Bank to make the loans evidenced by this Note, the maker
represents and warrants to the Bank that the maker is a corporation duly
incorporated, validly existing and in good standing under the laws of its state
of incorporation, and is duly qualified as a foreign corporation in each
jurisdiction wherein the character of the property owned or the nature of
4
<PAGE> 5
the business being transacted by it makes such qualification necessary (except
where the failure to be qualified would not reasonably be expected to have a
material adverse effect on the maker); the maker has the corporate power to
execute and deliver this Note and to incur and perform its obligations
hereunder. The execution, delivery and performance of this Note has been duly
authorized by all necessary corporate action and will not violate any provision
of law or of the maker's Certificate or Articles of Incorporation or By-Laws or
result in the breach of, or constitute a default under, any indenture or other
agreement or instrument to which the maker is a party or by which the maker be
bound or affected. This Note constitutes, the legal, valid and binding
obligation of the maker, enforceable in accordance with its terms. The proceeds
of this Note shall be used to capitalize Caribou Merger Corporation, a
corporation of the state of Delaware to provide the cash necessary to fund, in
part, the acquisition of all of the outstanding common stock of Copley
Pharmaceutical, Inc., a corporation of the State of Delaware.
The maker covenants and agrees that so long as this Note shall remain
outstanding, (a) the maker shall furnish to the Bank: (i) as soon as available,
but in any event not later than 90 days after the close of the 1999 fiscal year
of the maker, a copy of the annual audit report for such year for the maker and
its consolidated Subsidiaries, including therein consolidated and consolidating
balance sheets of the maker and its consolidated Subsidiaries as at the end of
such fiscal year, and related consolidated and consolidating statements of
income, shareholders' equity and cash flows of the maker and its consolidated
Subsidiaries for such fiscal year, setting forth in each case in comparative
form the corresponding figures for the preceding fiscal year, all in reasonable
detail, prepared in accordance with GAAP applied on a basis consistently
maintained throughout the period involved and with the prior year with such
changes therein as shall be approved by the maker's independent certified public
accountants, such consolidated financial statements to be certified by
PricewaterhouseCoopers LLP or other independent certified public accountants
selected by the maker and reasonable acceptable to the Banks, without any
exception or qualification arising out of the restricted or limited nature of
the examination made by such accountants other than any consistency
qualification that may result from a change in the method used to prepare the
financial statements as to which such accountants concur; and (ii) as soon as
available, but in any event not later than 60 days after the end of each of the
first three quarterly periods of each fiscal year of the maker, unaudited
consolidated and consolidating financial statements of the maker and its
consolidated Subsidiaries, including therein (x) consolidated and consolidating
balance sheets of the maker and its consolidated Subsidiaries as at the end of
each fiscal quarter, (y) the related consolidated and consolidating statements
of income of the maker and its consolidated Subsidiaries, and (z) the related
consolidated statements of cash flows and shareholders' equity of the maker and
its consolidated Subsidiaries all for the period from the beginning of such
fiscal year to the end of such fiscal quarter, setting forth in each case in
comparative form the corresponding figures for the like period of the preceding
fiscal year; all in reasonable detail, prepared in accordance with GAAP applied
on a basis consistently maintained throughout the period involved and with prior
periods (subject to normal year-end audit adjustments) and certified on behalf
of the maker by an officer of the maker; and (b) Teva Pharmaceutical Industries
Ltd. shall be in compliance with letter dated September 13, 1999, executed by
Parent in favor of the Bank. The term "Subsidiary" means any corporation of
which more than 50% of the outstanding shares of capital stock having ordinary
voting power to elect a
5
<PAGE> 6
majority of the board of directors of such corporation (irrespective of whether
or not at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time, directly or indirectly owned by the maker or by one
or more other Subsidiaries.
Upon the happening, with respect to the maker or guarantor of this Note
or any assets of any such maker or guarantor, of any of the following events:
(1) the failure to furnish the Bank with any requested information or failing to
permit inspection of books or records by the Bank or any of its agents; (2) the
making of any misrepresentation to the Bank in obtaining credit for any of them;
(3) dissolution (if a corporation or partnership); (4) the breach of any
covenant contained herein; (5) the making of a mortgage or pledge; (6) the
commencement of a foreclosure proceeding; (7) default in the payment of
principal or interest on this Note or in the payment of any other obligation of
any said maker or guarantor held by the Bank or holder thereof; (8) default in
the performance or observance of any covenant or agreement contained in the
instrument evidencing such obligation; (9) default in the payment of principal
of or interest on any indebtedness for borrowed money owed to any other person
or entity (including any such indebtedness in the nature of a lease) or default
in the performance or observance of the terms of any instrument pursuant to
which such indebtedness was created or is secured, the effect of which default
is to cause any holder of any such indebtedness to cause the same to become due
prior to its stated maturity (and whether or not such default is waived by the
holder thereof); (10) the suspension of business; (11) the making of an
assignment for the benefit of creditors, or the appointment of a trustee,
receiver or liquidator for the maker or guarantor or for any of his, its or
their property, or the commencement of any proceedings by the maker or guarantor
under any bankruptcy, reorganization, arrangement of debt, insolvency,
readjustment of debt, receivership, liquidation or dissolution law or statute
(including, if the maker or guarantor is a partnership, its dissolution pursuant
to any agreement or statute), or the commencement of any such proceedings
without the consent of the maker or guarantor, as the case may be, and such
proceedings shall continue undischarged for a period of 30 days; (12) the
sending of notice of an intended bulk sale; (13) the entry of judgments or any
attachment, levy or execution against any its properties shall not be released,
discharged, dismissed, stayed or fully bonded for a period of 30 days or more
after its entry, issue or levy, as the case may be; or the issuance of a warrant
of distraint or assertion of a lien for unpaid taxes (except such taxes as are
being contested in good faith by appropriate proceedings (to the extent that
such proceedings are required) and with respect to which the maker has set up an
adequate reserve under GAAP for the payment of such taxes), this Note, if not
then due or payable on demand, shall as to (2), (3), (5), (6), (7), (9), (10),
(11), (12) and (13) above, become due and payable immediately without demand or
notice, and as to (1), (4) and (8) above become due and payable only if such
default remains uncured following ten (10) days prior written notice to maker of
such default and all other debts or obligations of the makers hereof to the Bank
or holder hereof, whether due or not due and whether direct or contingent and
howsoever evidenced, shall, as to (2), (3), (5), (6), (7), (9), (10), (11), (12)
and (13) above, at the option of the Bank or holder hereof, also become due and
payable immediately without demand or notice and as to (1), (4) and (8) above
become due and payable, at the option of the Bank or holder hereof, only if such
default remains uncured following ten (10) days prior written notice to maker of
such default. After this Note becomes due, at stated maturity or on
acceleration, any unpaid balance hereof shall bear interest from the date it
6
<PAGE> 7
becomes due until paid at a rate per annum 3% above the rate borne by this Note
when it becomes due or, if such rate shall not be lawful with respect to the
undersigned, then at the highest lawful rate. The maker agrees that if an
attorney is retained to enforce or collect this Note or any other obligations by
reason of non-payment of this Note when due or made due hereunder, a reasonable
attorneys' fee shall be paid in addition.
The Bank reserves the right to sell participations to one or more
persons or entities in or to all or a portion of its rights under this Note.
This Note shall be governed by the laws of the State of New York and
shall be binding upon the maker and the maker's successors and assigns. THE
MAKER HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT LOCATED IN NEW YORK CITY OVER ANY ACTION OR PROCEEDING ARISING OUT
OF ANY DISPUTE BETWEEN THE MAKER AND THE BANK, AND THE MAKER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF A COPY OF SUCH PROCESS TO THE MAKER AT THE ADDRESS SET FORTH BELOW.
IN THE EVENT OF LITIGATION BETWEEN THE BANK AND THE MAKER OVER ANY MATTER
CONNECTED WITH THIS NOTE OR RESULTING FROM TRANSACTIONS HEREUNDER, THE RIGHT TO
A TRIAL BY JURY IS HEREBY WAIVED BY THE BANK AND THE MAKER. THE MAKER ALSO
WAIVES THE RIGHT TO INTERPOSE ANY SET-OFF OR COUNTERCLAIM OF ANY NATURE. The
Bank or any holder may accept late payments, or partial payments, even though
marked "payment in full" or containing words of similar import or other
conditions, without waiving any of its rights. No amendment, modification or
waiver of any provision of this Note nor consent to any departure by the maker
or the Bank therefrom shall be effective, irrespective of any course of dealing,
unless the same shall be in writing and signed by the maker and the Bank, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
The rights and remedies of the Bank provided for hereunder (including
but not limited to the right to accelerate Liabilities of maker) are cumulative
with the rights and remedies of the Bank available under any other instrument or
agreement or under applicable law.
TEVA PHARMACEUTICALS USA, INC.
By: /s/ Peter R. Terreri
----------------------------------------
Peter R. Terreri
Senior Vice President and
Chief Financial Officer
650 Cathill Road
Sellersville, Pennsylvania 18960
7
<PAGE> 8
ADDENDUM A
Subordination Provisions
The Bank and each holder from time to time of this Note by its
acceptance thereof agrees that all payments on this Note shall be subordinate
and subject in right of payment, to the extent set forth in this Addendum A, to
the prior payment in full in cash of all Senior Debt (as defined below). The
provisions of this Addendum A are made for the benefit of all present and future
holders of Senior Debt and their successors and assigns (irrespective of whether
such Senior Debt was created or acquired before or after the effectiveness of
this Note), and shall be enforceable by each of them directly against the Bank
or any holder of this Note from time to time. This Addendum A may not be amended
without the written consent of each holder of Senior Debt and any purported
amendment without such consent shall be void. THE PROVISIONS OF THIS ADDENDUM A
ARE SEPARATE AND APART FROM, AND DO NOT AFFECT THE OBLIGATIONS OF TEVA
PHARMACEUTICAL INDUSTRIES LTD. (THE "GUARANTOR") UNDER, THAT CERTAIN UNLIMITED
GUARANTY OF EVEN DATE HEREWITH, AND NONE OF THE PROVISIONS OF THIS ADDENDUM A
SHALL GRANT ANY HOLDER OF SENIOR DEBT THE RIGHT TO RECEIVE ANY PAYMENTS MADE BY
THE GUARANTOR TO THE BANK OF THIS NOTE, OR TO REQUIRE THE BANK TO TURN OVER TO
THE HOLDER OF SENIOR DEBT OR OTHERWISE ACCOUNT TO SUCH HOLDER FOR AMOUNTS
RECEIVED FROM THE GUARANTOR PURSUANT TO THE PROVISIONS OF SUCH UNLIMITED
GUARANTY.
1. For purposes of this Addendum A, the term "Senior Debt"
means the principal of (and premium, if any), and interest on (a) indebtedness
of the maker in an aggregate principal amount up to $50,000,000 for money
borrowed under a working capital credit facility from, or which is evidenced by
a note or similar instrument given to, PNC Bank, National Association ("PNC")
and such other lending institutions as may join with PNC in providing such
facility, or acquire a participation in such facility, or as may be successors
to institutions in respect of such facility, and (b) amendments, renewals,
extensions, modifications and refundings of any such indebtedness, whether any
such indebtedness described in the preceding clause is outstanding on the date
hereof or hereafter created, incurred or assumed, unless the instrument creating
or evidencing any such indebtedness pursuant to which the same is outstanding
expressly provides that such indebtedness is not superior in right of payment to
the Note.
2. (a) Upon any payment or distribution of assets or
securities of the maker of any kind or character (whether in cash, property or
securities) upon any dissolution, winding up or total or partial liquidation or
reorganization of the maker, whether voluntary or involuntary or in a
bankruptcy, insolvency, receivership or other proceeding (an "Insolvency
Event"), all Senior Debt shall first be paid in full in cash, before the Bank or
any holder of this Note shall be entitled to receive, directly or indirectly,
any payment of the principal of, or interest on or any other amount due with
respect to this Note or to receive any distribution of any assets or securities.
Before any payment of the principal of, or interest on or any other amount due
with respect to this Note upon any such Insolvency Event, any payment or
distribution of assets or securities of the maker of any kind or character
(whether in cash,
<PAGE> 9
property or securities) to which the Bank or the holder of this Note would be
entitled but for the provisions of this Addendum A, shall be made by the maker
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, directly to the holders of Senior
Debt to the extent necessary to pay the Senior Debt in full in cash after giving
effect to any concurrent payment or distribution to the holders of Senior Debt.
(b) No direct or indirect payment by or on behalf of the maker
of the principal of, or interest on or any other amount due with respect to,
this Note (whether upon acceleration or otherwise) shall be made if, at the time
of such payment, there exists any default or event of default under any
provision of any agreement relating to the Senior Debt (a "Blocking Event").
(c) The Bank shall not declare this Note to be due and
payable, and this Note shall not otherwise become due and payable, prior to its
stated maturity upon the occurrence of any default hereunder unless and until
there shall previously have been an acceleration of the Senior Debt; provided,
however, that for the purposes of the Unlimited Guaranty, dated as of September
13, 1999 from Teva Pharmaceutical Industries Ltd. ("Guarantor") the
"Liabilities" (as defined in said Unlimited Guaranty) shall become and be
automatically due and payable, and the Bank may make demand upon the Guarantor
for payment of such Liabilities, in any and all circumstances when this Note
would otherwise have become automatically due and payable, or could otherwise
have been declared due and payable, but for the preceding provisions of this
clause (c).
If, notwithstanding the foregoing provisions prohibiting such
payment or distribution, the Bank or any holder of this Note shall have received
any payment on account of this Note at any time following the occurrence of an
event described in Paragraph 2(a) or following receipt by such party from any
holder of Senior Debt of written notice to the effect that a Blocking Event has
occurred, and before all Senior Debt is paid in full in cash, then such payment
or distribution shall be received and held in trust for the holders of Senior
Debt and shall be paid over or delivered to the holders of Senior Debt remaining
unpaid to the extent necessary to pay in full all Senior Debt in cash.
3. If the Senior Debt has not been paid in full in cash at a
time at which the maker is subject to an Insolvency Event, the holders of the
Senior Debt are hereby irrevocably authorized, but shall have no obligation, to
demand, sue for, collect and receive every payment or distribution received in
respect of any such Insolvency Event and give acquittance therefor and to file
claims and proofs of claim, as their interests may appear.
4. No right of the holders of Senior Debt nor any other
present or future holder of the Senior Debt to enforce these subordination
provisions shall at any time or in any way be prejudiced or impaired by any
failure to act by the holders of Senior Debt or by any noncompliance by the
maker with the terms and provisions and covenants herein, regardless of any
knowledge thereof a holder of Senior Debt may have or otherwise be charged with.
The
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<PAGE> 10
provisions of this Addendum A are intended to be for the benefit of, and shall
be enforceable directly by, any present or future holder of the Senior Debt.
5. The Bank and each holder of this Note by his acceptance
thereof agrees not to sell, assign or transfer all or any part of this Note
while any Senior Debt remains unpaid unless such sale, assignment or transfer is
made expressly subject to this Addendum A.
6. Upon the payment by them in full, in cash, of all Senior
Debt, the Bank and the holders of this Note shall be subrogated to the rights of
the holders of Senior Debt to receive payments or distributions of cash,
property or securities of the maker applicable to Senior Debt until this Note
shall have been paid in full.
7. The Bank and each other holder of this Note agree to
forbear and not take any action the purpose or effect of which would give them a
preference or priority over the Senior Debt.
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<PAGE> 1
Exhibit (b)(5)
UNLIMITED GUARANTY
In consideration of financial accommodations given or to be given or
continued to TEVA PHARMACEUTICALS USA, INC., hereinafter called "Borrower," by
BANK LEUMI USA hereinafter called "Bank," and the benefits to be obtained
therefrom by the undersigned, the undersigned irrevocably and unconditionally
guarantee to the Bank, payment when due, without reference to and
notwithstanding any subordination provisions contained in such documents,
whether by acceleration or otherwise, of any and all liabilities of the Borrower
to the Bank, in the aggregate at any one time outstanding plus all interest
thereon and all attorneys' fees, costs and expenses of collection incurred by
the Bank in enforcing any of such liabilities. This is a guaranty of payment and
not of collection.
The term "liabilities of the Borrower" shall mean all liabilities of the
Borrower to the Bank under Credit Agreement and Promissory Note, each dated
September 13, 1999.
The undersigned waive notice of acceptance of this guaranty and notice of
any liability to which it may apply, and waive presentment, demand of payment,
protest, notice of dishonor or nonpayment of any such liabilities, suit or
taking other action by the Bank against, and any other notice to, any party
liable thereon (including the undersigned).
The Bank may at any time and from time to time (whether or not after
revocation or termination of this guaranty) without the consent of, or notice
to, the undersigned, without incurring responsibility to the undersigned,
without impairing or releasing the obligations of the undersigned hereunder,
upon or without any terms or conditions and in whole or in part:
(1) change the manner, place or terms of payment, and/or change or extend
the time of payment of, renew or alter, any liability of the Borrower, any
security therefor, or any liability incurred directly or indirectly in respect
thereof, and the guaranty herein made shall apply to the liabilities of the
Borrower as so changed, extended, renewed or altered;
(2) exercise or refrain from exercising any rights against the Borrower or
others (including the undersigned), or otherwise act or refrain from acting;
(3) settle or compromise any liability hereby guaranteed, or any liability
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to creditors
of the Borrower other than the Bank and the undersigned; and
(4) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Bank regardless of what
liability or liabilities of the Borrower remain unpaid.
<PAGE> 2
No invalidity, irregularity or unenforceability of all or any part of the
liabilities hereby guaranteed shall affect, impair or be a defense to this
guaranty, and this guaranty is a primary obligation of the undersigned.
This guaranty is a continuing one and all liabilities to which it applies
or may apply under the terms hereof shall be conclusively presumed to have been
created in reliance hereon. As to the undersigned, this guaranty shall continue
until written notice of revocation signed by such undersigned, shall in each
case have been actually received by the Bank, notwithstanding a revocation by,
or complete or partial release for any cause, of the undersigned, or of the
Borrower or of any one liable in any manner for the liabilities hereby
guaranteed or for the liabilities (including those hereunder) incurred directly
or indirectly in respect thereof or hereof, and notwithstanding the
dissolution, termination or increase, decrease or change in personnel,
management, shareholders or members of the undersigned. Written notice as
above provided shall be the only means of revocation or termination of this
guaranty, notwithstanding the fact that for periods of time there may be no
outstanding liabilities of the Borrower. No revocation or termination hereof
shall affect in any manner the effectiveness and applicability of this
guaranty, or any rights of the Bank or the obligations of the undersigned
hereunder, with respect to (a) liabilities of the Borrower which shall have
been created, contracted, assumed or incurred prior to receipt by the Bank of
written notice of such revocation or termination, (b) all extensions, renewals
or modifications of any of the liabilities referred to in (a) above made after
receipt by the Bank of such written notice, or (c) liabilities of the Borrower
which shall have been created, contracted, assumed or incurred after receipt by
the Bank of such written notice pursuant to any contract entered into by the
Bank prior to its receipt of such notice or which are otherwise related to or
connected with liabilities of the Borrower theretofore arising or transactions
theretofore entered into.
You agree that all payments to be made to the Bank will be made free and
clear of, and without deduction for or on account of, any present or future
"Foreign Taxes" (as defined below). You further agree that, if any Foreign
Taxes are required to be withheld from any amounts payable to the Bank, the
Bank may, in its sole and absolute discretion increase the amounts payable by
you to the Bank to the extent necessary to yield to the Bank (after payment of
all Foreign Taxes) the full amounts which the Bank would have received had the
payments not been subject to Foreign Taxes. "Foreign Taxes" means any income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions,
withholdings or restrictions or conditions of any nature whatsoever now or
hereafter imposed, levied, collected, withheld or assessed by any country or
government (or by a political subdivision or taxing authority thereof) other
than the United States of America or any political subdivision or taxing
authority thereof.
The balance of every account of the undersigned with, and each claim of the
undersigned against, the Bank existing from time to time, shall be subject to be
set off against any and all liabilities of the undersigned and the Bank may at
any time or from time to time following an Event of Default, or the occurrence
of any act or failure to act of the Borrower with respect to its obligations
under the Credit Agreement or Promissory Note, at its option and without notice
appropriate and apply toward the
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<PAGE> 3
payment of any of the liabilities of the undersigned the balance of each such
account of the undersigned with, and each such claim of the undersigned
against, the Bank.
Upon the happening of any of the following events (each an "Event of
Default"): (1) any representation or warranty of the undersigned in this
guaranty or in any other writing or statement furnished to the Bank at any time
in connection with this guaranty shall prove to be false, incorrect or
misleading, (2) or the undersigned shall default in the performance or
observance of any agreement or covenant in this guaranty or any other agreement
or instrument entered into or made in connection with this guaranty, (3) or the
insolvency of the Borrower or the undersigned, (4) or failure of the
undersigned to furnish to the Bank, or cause the Borrower to furnish to the
Bank, such information respecting the condition or operations, financial or
otherwise, of the undersigned or the Borrower as the Bank may from time to time
reasonably request, (5) or suspension of business of the Borrower or the
undersigned, (6) or the issuance of any warrant of attachment against any of
the property of the Borrower or the undersigned, (7) or the making by the
Borrower or the undersigned of an assignment for the benefit of creditors, (8)
or a trustee or receiver being appointed for the Borrower or the undersigned or
for any property of either of them, or any proceeding being commenced by or
against the Borrower or the undersigned under any bankruptcy, reorganization,
arrangement of debt, insolvency, readjustment of debt, moratorium,
receivership, liquidation or dissolution law or statute, then and in any such
event, and at any time thereafter, the Bank may, without notice to the Borrower
or the undersigned, make the liabilities of the Borrower to the Bank, whether
or not then due, immediately due to and payable hereunder as to the
undersigned, and the Bank shall be entitled to enforce the obligations of the
undersigned hereunder provided that as to (2) and (4) above, the obligations of
the undersigned to the Bank shall become due and payable only if such default
remains uncured following ten (10) days prior written notice to the undersigned
of such default.
Without limiting the Bank's rights under any other agreement, upon the
date on which notice of revocation or termination of this guaranty is received,
or upon the occurrence of an Event of Default hereunder or under any of the
loan documents evidencing or relating to the liabilities of the Borrower, any
obligations owed by the Borrower to the undersigned in connection with any
extension of credit or financial accommodation by the undersigned to or for the
account of the Borrower are hereby subordinated to the liabilities of the
Borrower, and such obligations of the Borrower to the undersigned, if the Bank
so requests, shall be collected, enforced and received by the undersigned as
trustee for the Bank and shall be paid over to the Bank on account of the
liabilities of the Borrower without reducing or affecting in any manner the
liability of the undersigned under other provisions of this guaranty.
The undersigned shall not exercise any right of subrogation which it may
have at any time otherwise as a result of this guaranty (whether contractual,
under Section 509 of the Bankruptcy Code, or otherwise) until all of the
liabilities of the Borrower have been paid in full.
-3-
<PAGE> 4
If claim is ever made upon the Bank for repayment, return, restoration or
other recovery of any amount or amounts received by the Bank in payment or on
account of any of the liabilities of the Borrower and the Bank repays all or
part of said amount: (a) because such payment or application of proceeds is or
may be avoided, invalidated, declared fraudulent, set aside or determined to be
void or voidable as a preferential transfer, fraudulent conveyance,
impermissible setoff or a diversion of trust funds; or (b) for any other
reason, including (without limitation) by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over the Bank or
any of its property, or (ii) any settlement or compromise of any such claim
effected by the Bank with any such claimant (including the Borrower), then and
in such event the undersigned agree that any such judgment, decree, order,
settlement or compromise shall be binding upon the undersigned, notwithstanding
any revocation hereof or the cancellation of any note or other instrument
evidencing any liability of the Borrower, and the undersigned shall be and
remain liable to the Bank hereunder for the amount so repaid or recovered to
the same extent as if such amount had never originally been received by the
Bank. The undersigned hereby indemnify and shall reimburse and hold the Bank
harmless for the amount so repaid and for all other claims, actions, suits,
proceedings, liabilities, losses, costs and expenses of every kind (including,
without limitation, the disbursements, expenses and fees of the Bank's
attorneys) that may be imposed upon, incurred by or asserted against the Bank
(i) in connection with defending any such claim for repayment and collecting
such amount from the undersigned, or (ii) otherwise arising out of or related
directly or indirectly to this guaranty (including, without limitation, any
action, suit or proceeding between the undersigned and the Bank, whether on
this guaranty or otherwise). The provisions of this paragraph shall survive the
termination of this guaranty, and any satisfaction and discharge of the
Borrower by virtue of any payment or court order or any state or federal law.
No delay on the part of the Bank in exercising any of its options, powers
or rights, or partial or single exercise thereof, shall constitute a waiver
thereof. No waiver any of its rights hereunder, and no modifications or
amendment of this guaranty, shall be deemed to be made by the Bank or the
undersigned unless the same shall be in writing, duly signed on behalf of the
Bank and the undersigned, and each such waiver, if any, shall apply only with
respect to the specific instance involved, and shall in no way impair the rights
of the Bank or the undersigned or the obligations of the undersigned to the Bank
or the Bank to the undersigned in any other respect at any other time.
The term "Bank" as used throughout this instrument shall be deemed to
include BANK LEUMI USA, and all its agencies, branches and departments wherever
located. The term "Business Days" shall mean any day of the year the Bank is
open for business (as required or permitted by law or otherwise).
Whenever in this instrument the words "attorneys' fees" are used, such
fees shall be the reasonable value of the services of the attorneys. The term
"Borrower" as used throughout this
-4-
<PAGE> 5
instrument shall be deemed to include any (a) successor partnership or
partnerships if the Borrower is a partnership, and (b) corporation or
corporations which succeed to all or substantially all of the assets or
business of the Borrower by merger, consolidation or sale of assets if the
Borrower is a corporation.
This guaranty and the rights and obligations of the Bank and of the
undersigned hereunder shall be governed and construed in accordance with the
laws of the State of New York; and this guaranty is binding upon the
undersigned, its administrators, successors, or assigns, and shall inure to the
benefit of the Bank, its successors or assigns. THE UNDERSIGNED HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT
LOCATED IN NEW YORK CITY OVER ANY ACTION OR PROCEEDING ARISING OUT OF ANY
DISPUTE BETWEEN THE UNDERSIGNED AND THE BANK, AND THE UNDERSIGNED FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF A COPY OF SUCH PROCESS TO THE UNDERSIGNED AT THE
ADDRESS SET FORTH BELOW. IN THE EVENT OF LITIGATION BETWEEN THE BANK AND THE
UNDERSIGNED OVER ANY MATTER CONNECTED WITH THIS GUARANTY, RESULTING FROM
TRANSACTIONS HEREUNDER OR RELATING TO DOCUMENTATION OR MATTERS CONNECTED WITH
THE LIABILITIES OF THE BORROWER, THE RIGHT TO A TRIAL BY JURY IS HEREBY WAIVED
BY THE BANK AND THE UNDERSIGNED. THE UNDERSIGNED ALSO WAIVES THE RIGHT TO
INTERPOSE ANY SET-OFF OR COUNTERCLAIM OF ANY NATURE.
Dated: New York, New York
the 13th day of September, 1999
TEVA PHARMACEUTICAL INDUSTRIES LTD.
By: /s/ Dan Suesskind September 14, 1999
----------------------------------------
Dan Suesskind
Chief Financial Officer (Title)
5 Basel Street, Petach Tikva, Israel
----------------------------------------
(Address)
-5-
<PAGE> 1
Exhibit (b)(6)
TEVA PHARMACEUTICAL INDUSTRIES LTD [TEVA LOGO]
- --------------------------------------------------------------------------------
September 13, 1999
Bank Leumi USA
564 Fifth Avenue, 5th Floor
New York, New York 10036
Attention: Michaela Klein, Senior Vice President
Re: Teva Pharmaceuticals USA, Inc. ("BORROWER")
Dear Ms. Klein:
In consideration of financial accommodations extended or about to be extended by
Bank Leumi USA (the "BANK") to Borrower, an indirect wholly owned subsidiary of
the undersigned, pursuant to the Credit Agreement dated as of September 13, 1999
by and among the Bank, the Borrower and the undersigned as guarantor (the
"CREDIT EXTENSIONS"), which Credit Extensions are beneficial to the undersigned,
the undersigned agrees that so long as any part of the Credit Extensions are
outstanding, the undersigned shall not create, incur, assume or suffer to exist
any Lien in or upon any of its property or assets, whether now owned or
hereafter acquired, or assign or otherwise convey any contract rights, accounts
receivable or other right to receive income (unless it makes, or causes to be
made, effective provision whereby the obligations of the undersigned under the
Loan Documents will be equally and ratably secured with any and all other
obligations thereby secured, such security to be pursuant to one or more
agreements reasonably satisfactory to the Bank and, in any such case, the Credit
Extensions shall have the benefit, to the fullest extent that, and with such
priority as, the Bank may be entitled under applicable law, of an equitable Lien
on such Property), except:
1. Liens for taxes, assessments or other governmental charges (i) that are not
yet due and payable (ii) the amount, applicability or validity thereof is
contested by the undersigned on a timely basis in good faith and in
appropriate proceedings, and the undersigned has established adequate
reserves therefor in accordance with Israeli GAAP on the books of the
undersigned or (iii) the nonpayment of which in the aggregate would not
reasonably be expected to have a Material Adverse Effect;
2. statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred in
the ordinary course of business for sums not yet due and payable or the
nonpayment of which in the aggregate would not reasonably be expected to
have a Material Adverse Effect;
CORPORATE HEADQUARTERS
5 BASEL ST. P.O. BOX 3190 PETAH TIQVA 49131 ISRAEL TEL (972)3-9267297 GENERAL
FAX (972)3-9267429
<PAGE> 2
2
3. Liens incurred or deposits made in the ordinary course of business, in each
case not incurred or made in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred purchase
price of property, (i) in connection with workers' compensation,
unemployment insurance and other types of social security or retirement
benefits, or (ii) to secure (or to obtain letters of credit that secure)
the performance of tenders, statutory obligations, surety bonds, appeal
bonds, bids, leases (other than Capital Leases), performance bonds,
purchase, construction, service, technical assistance or sales contracts
and other similar obligations;
4. Liens securing judgments that are being stayed or contested, in each case
on a timely basis in good faith and in appropriate proceedings and with
respect to which the undersigned has established adequate reserves in
accordance with Israeli GAAP;
5. licenses, leases or subleases granted to others, easements, rights-of-way,
defects and irregularities in title, restrictions and other similar charges
or encumbrances, in each case incidental to, and not interfering with, the
ordinary conduct of the business of the undersigned, provided that such
Liens do not, in the aggregate, materially detract from the value of such
property;
6. Liens on property or assets of the undersigned or any of its Subsidiaries
securing obligations owing to the undersigned or to any of its
Subsidiaries;
7. Liens existing on the date hereof, which secure Debt of certain
Subsidiaries of the undersigned, the nonpayment of which would not
reasonably be expected to have a Material Adverse Effect;
8. any Lien created to secure all or any part of the purchase price, or to
secure Debt incurred or assumed to pay all or any part of the purchase
price or cost of construction, of property (or any improvement thereon)
acquired or constructed by the undersigned after the date hereof, provided
that
8.1 any such Lien shall extend solely to the item or items of such
property (or improvement thereon) so acquired or constructed and, if
required by the terms of the instrument originally creating such Lien,
other property (or improvement thereon) which is an improvement to or
is acquired for specific use in connection with such acquired or
constructed property (or improvement thereon) or which is real
property being improved by such acquired or constructed property (or
improvement thereon).
8.2 the principal amount of the Debt secured by any such Lien shall at no
time exceed an amount equal to the lesser of (A) the cost to the
undersigned of the property (or improvement thereon) so acquired or
constructed and (B) the fair market value (as determined in good faith
by the undersigned) of such property (or improvement thereon) at the
time of such acquisition or construction, and
CORPORATE HEADQUARTERS
5 BASEL ST. P.O. BOX 3190 PETAH TIQVA 49131 ISRAEL TEL(972)3-9267297 GENERAL
FAX (972)3-9267429
<PAGE> 3
3
8.3 any such Lien shall be created contemporaneously with, or within 180
days after, the acquisition or construction of such property;
9. any Lien existing on property of a Person immediately prior to its being
consolidated, merged or amalgamated with or into the undersigned or any of
its Subsidiaries or its becoming a Subsidiary, or any Lien existing on any
property acquired by the undersigned or any of its Subsidiaries at the time
such property is so acquired (whether or not the Debt secured thereby shall
have been assumed), provided that (i) no such Lien shall have been created
or assumed in contemplation of such consolidation, merger or amalgamation
or such Person's becoming a Subsidiary or such acquisition of property, and
(ii) each such Lien shall extend solely to the item or items of property so
acquired and, if required by the terms of the instrument originally
creating such Lien, other property that is an improvement to or is acquired
for specific use in connection with such acquired property;
10. any Lien renewing, extending or refunding any Lien permitted by clauses 7,
8, or 9 of this paragraph, provided that (i) the principal amount of Debt
secured by such Lien immediately prior to such extension, renewal or
refunding is not increased beyond such principal amount, together with any
accrued interest and fees and expenses with respect thereto, (ii) such Lien
is not extended to any other property, and (iii) immediately after such
extension, renewal or refunding no default or event of default under the
Note evidencing the Credit Extensions would exist;
11. Liens arising solely by operation of law in the ordinary course of
business, and not due to a default; and
12. Liens in addition to those described in clauses 9 through 10, inclusive, of
this paragraph, provided that the aggregate principal amount of all Debt
secured by all such additional Liens does not at any time exceed 10% of
consolidated total assets of the undersigned that would be shown as assets
on a consolidated balance sheet of the undersigned as of such time prepared
in accordance with Israeli GAAP after eliminating all amounts properly
attributable to minority interests, if any, in the capital stock and
surplus of Subsidiaries.
For the purpose of this letter, the term "AFFILIATE" shall mean and include any
corporation, person, or entity (1) which directly or indirectly controls, or is
controlled by, or is under common control with the Borrower; (2) which directly
or indirectly beneficially owns or holds thirty percent (30%) or more of any
class of voting stock of the Borrower or any Subsidiary, or (3) thirty percent
(30%) or more of the voting stock of which is directly or indirectly
beneficially owned or held by the Borrower or one of its shareholders. The term
"CAPITAL LEASE" shall mean a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a
liability in accordance with Israeli GAAP. The term "CONTROL" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a corporation, person, or entity,
whether through the ownership of voting securities, by contract or otherwise.
The term "DEBT" shall mean, with respect to any Person, without duplication: (a)
its liabilities for borrowed money; (b) its liabilities for the deferred
purchase price of property acquired by such Person (excluding accounts payable
arising in the
<PAGE> 4
ordinary course of business but including, without limitation, all liabilities
created or arising under any conditional sale or other title retention agreement
with respect to any such property); (c) the amount of obligations that would
appear as a liability on the balance sheet of such Person in accordance with
Israeli GAAP as the lessee under a Capital Lease; (d) all liabilities for
borrowed money secured by any Lien with respect to any property owned by such
Person (whether or not it has assumed or otherwise become liable for such
liabilities); and (e) any guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (d) of this definition. The term
"ISRAELI GAAP" shall mean generally accepted accounting principles as in effect
from time to time in Israel. The term "LIEN" shall mean any mortgage, pledge,
lien, security interest, charge or encumbrance of any kind or nature (including
the lien or retained security title of a conditional vendor) and expressly does
not include any so-called "negative pledge" provisions in agreements covering
the incurrence of Debt. The term "LOAN DOCUMENTS" shall mean the following
documents related to the Credit Extensions: (1) the Credit Agreement by and
among the Borrower, the Bank and the undersigned, (ii) the Unlimited Guaranty
executed by the undersigned in favor of the Bank and (iii) the Note evidencing
the Credit Extensions. The term "MATERIAL ADVERSE EFFECT" shall mean a material
adverse effect on (a) the business, operations, affairs, financial condition,
assets or properties of the undersigned, or (b) the ability of the undersigned
to perform its obligations under any Loan Document, or (c) the validity or
enforceability of any Loan Document. The term "PERSON" shall mean an individual,
partnership, corporation, limited liability company, association, trust,
unincorporated organization, or a government or agency or political subdivision
thereof. The term "SUBSIDIARY" shall mean as to any Person, any corporation,
association, limited liability company or other similar business entity in which
such Person or one or more of its Subsidiaries or such Person and one or more of
its Subsidiaries owns sufficient equity or voting interests to enable it or them
(as a group) ordinarily, in the absence of contingencies, to elect a majority of
the directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries (unless such partnership or
joint venture can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries).
Teva Pharmaceutical Industries Ltd.
By: /s/ Dan Suesskind September 14, 1999
---------------------------------------
Dan Suesskind
Chief Financial Officer
CORPORATE HEADQUARTERS
5 BASEL ST. P.O. BOX 3190 PETAH TIQVA 49131 ISRAEL TEL (972)3-9267297 GENERAL
FAX (972)3-9267429
<PAGE> 1
Exhibit (b)(7)
TEVA PHARMACEUTICALS USA, INC.
650 CATHILL ROAD
SELLERSVILLE, PA 18960
September 13, 1999
Bank Leumi USA
564 Fifth Avenue, 5th Floor
New York, New York 10036
Attention: Michaela Klein, Senior Vice President
Re: Teva Pharmaceuticals USA, Inc. ("BORROWER")
Dear Ms. Klein:
In consideration of financial accommodations extended or about to be extended by
Bank Leumi USA (the "BANK") to Borrower (the "CREDIT EXTENSIONS"), pursuant to
the Credit Agreement dated as of September 13, 1999 by and among the Bank, the
Borrower and Teva Pharmaceutical Industries Ltd. as guarantor (the "GUARANTOR"),
the Borrower agrees that so long as any part of the Credit Extensions are
outstanding, the Borrower shall not create, incur, assume or suffer to exist any
Lien in or upon any of its property or assets, whether now owned or hereafter
acquired, or assign or otherwise convey any contract rights, accounts receivable
or other right to receive income (unless it makes, or causes to be made,
effective provision whereby the obligations of the Borrower under the Loan
Documents will be equally and ratably secured with any and all other obligations
thereby secured, such security to be pursuant to one or more agreements
reasonably satisfactory to the Bank and, in any such case, the Credit Extensions
shall have the benefit, to the fullest extent that, and with such priority as,
the Bank may be entitled under applicable law, of an equitable Lien on such
property), except:
(1) Liens for taxes, assessments or other governmental charges (i) that
are not yet due and payable (ii) the amount, applicability or validity
thereof is contested by the Borrower on a timely basis in good faith
and in appropriate proceedings, and the Borrower has established
adequate reserves therefor in accordance with US GAAP on the books of
the Borrower or (iii) the nonpayment of which in the aggregate would
not reasonably be expected to have a Material Adverse Effect;
(2) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred
in the ordinary course of business for sums not yet due and payable or
the nonpayment of which in the aggregate would not reasonably be
expected to have a Material Adverse Effect;
(3) Liens incurred or deposits made in the ordinary course of business,
in each case not incurred or made in connection with the borrowing of
money, the obtaining of
<PAGE> 2
advances or credit or the payment of the deferred purchase price of
property, (i) in connection with workers' compensation, unemployment
insurance and other types of social security or retirement benefits, or
(ii) to secure (or to obtain letters of credit that secure) the
performance of tenders, statutory obligations, surety bonds, appeal
bonds, bids, leases (other than Capital Leases), performance bonds,
purchase, construction, service, technical assistance or sales
contracts and other similar obligations;
(4) Liens securing judgments that are being stayed or contested, in
each case on a timely basis in good faith and in appropriate
proceedings and with respect to which the Borrower has established
adequate reserves in accordance with US GAAP;
(5) licenses, leases or subleases granted to others, easements,
rights-of-way, defects and irregularities in title, restrictions and
other similar charges or encumbrances, in each case incidental to, and
not interfering with, the ordinary conduct of the business of the
Borrower, provided that such Liens do not, in the aggregate, materially
detract from the value of such property;
(6) Liens on property or assets of the Borrower or any of its
Subsidiaries securing obligations owing to the Borrower or to any of
its Subsidiaries;
(7) Liens existing on the date hereof, which secure Debt of certain
Subsidiaries of the Borrower, the nonpayment of which would not
reasonably be expected to have a Material Adverse Effect;
(8) any Lien created to secure all or any part of the purchase price,
or to secure Debt incurred or assumed to pay all or any part of the
purchase price or cost of construction, of property (or any improvement
thereon) acquired or constructed by the Borrower after the date hereof,
provided that
(i) any such Lien shall extend solely to the item or items of
such property (or improvement thereon) so acquired or
constructed and, if required by the terms of the instrument
originally creating such Lien, other property (or improvement
thereon) which is an improvement to or is acquired for specific
use in connection with such acquired or constructed property
(or improvement thereon) or which is real property being
improved by such acquired or constructed property (or
improvement thereon),
(ii) the principal amount of the Debt secured by any such Lien
shall at no time exceed an amount equal to the lesser of (A)
the cost to the Borrower of the property (or improvement
thereon) so acquired or constructed and (B) the fair market
value (as determined in good faith by the Borrower) of such
property (or improvement thereon) at the time of such
acquisition or construction, and
(iii) any such Lien shall be created contemporaneously with, or
within 180 days after, the acquisition or construction of such
property;
-2-
<PAGE> 3
(9) any Lien existing on property of a Person immediately prior to its
being consolidated, merged or amalgamated with or into the Borrower or
any of its Subsidiaries or its becoming a Subsidiary, or any Lien
existing on any property acquired by the Borrower or any of its
Subsidiaries at the time such property is so acquired (whether or not
the Debt secured thereby shall have been assumed), provided that (i) no
such Lien shall have been created or assumed in contemplation of such
consolidation, merger or amalgamation or such Person's becoming a
Subsidiary or such acquisition of property, and (ii) each such Lien
shall extend solely to the item or items of property so acquired and,
if required by the terms of the instrument originally creating such
Lien, other property that is an improvement to or is acquired for
specific use in connection with such acquired property;
(10) any Lien on receivables of the Borrower or any of its Subsidiaries
created in connection with any receivables financing with banks or
other financial institutions or in connection with any receivables
securitiazation program;
(11) Liens securing Debt in an aggregate principal amount up to
$50,000,000 for money borrowed under a working capital credit facility
from, or which is evidenced by a note or similar instrument given to,
PNC Bank, National Association ("PNC") and such other lending
institutions as may join with PNC in providing such facility), or
acquire a participation in such facility, or as may be successors to
institutions in respect of such facility (and in which facility, if PNC
is not a participant therein, the Bank has been offered at least a 45%
participation therein), and including all amendments, renewals,
extensions, modifications and refundings of any such Debt, whether any
such Debt is outstanding on the date hereof or hereafter created,
incurred or assumed;
(12) any Lien renewing, extending or refunding any Lien permitted by
clauses 7, 8, 9, 10 or 11 of this paragraph, provided that (i) the
principal amount of Debt secured by such Lien immediately prior to such
extension, renewal or refunding is not increased beyond such principal
amount, together with any accrued interest and fees and expenses with
respect thereto, (ii) such Lien is not extended to any other property,
and (iii) immediately after such extension, renewal or refunding no
default or event of default under the Note evidencing the Credit
Extensions would exist;
(13) Liens arising solely by operation of law in the ordinary course of
business and not due to a default; and
(14) Liens in addition to those described in clauses 9 through 12,
inclusive, of this paragraph, provided that the aggregate principal
amount of all Debt secured by all such additional Liens does not at any
time exceed 25% of consolidated total assets of the Borrower that would
be shown as assets on a consolidated balance sheet of the Borrower as
of such time prepared in accordance with US GAAP after eliminating all
amounts properly attributable to minority interests, if any, in the
capital stock and surplus of Subsidiaries.
For the purpose of this letter, the following terms shall have the respective
meanings indicated:
-3-
<PAGE> 4
"AFFILIATE" shall mean and include any corporation, person, or entity (1)
which directly or indirectly controls, or is controlled by, or is under common
control with the Borrower; (2) which directly or indirectly beneficially owns or
holds thirty percent (30%) or more of any class of voting stock of the Borrower
or any Subsidiary, or (3) thirty percent (30%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Borrower or
one of its shareholders.
"CAPITAL LEASE" shall mean a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with US GAAP.
"CONTROL" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a corporation, person,
or entity, whether through the ownership of voting securities, by contract or
otherwise.
"DEBT" shall mean, with respect to any Person, without duplication: (a) its
liabilities for borrowed money; (b) its liabilities for the deferred purchase
price of property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other title
retention agreement with respect to any such property); (c) the amount of
obligations that would appear as a liability on the balance sheet of such Person
in accordance with US GAAP as the lessee under a Capital Lease; (d) all
liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not it has assumed or otherwise become liable
for such liabilities); and (e) any guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through (d) of this
definition.
"US GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
"LIEN" shall mean any mortgage, pledge, lien, security interest, charge or
encumbrance of any kind or nature (including the lien or retained security title
of a conditional vendor) and expressly does not include any so-called "negative
pledge" provisions in agreements covering the incurrence of Debt.
"LOAN DOCUMENTS" shall mean the following documents related to the Credit
Extensions: (i) the Credit Agreement by and among the Borrower, the Bank and the
Guarantor, (ii) the Unlimited Guaranty executed by the Guarantor in favor of the
Bank and (iii) the Note evidencing the Credit Extensions.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Borrower, or (b) the ability of the Borrower to perform its obligations under
any Loan Document, or (c) the validity or enforceability of any Loan Document.
-4-
<PAGE> 5
"PERSON" shall mean an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"SUBSIDIARY" shall mean as to any Person, any corporation, association,
limited liability company or other similar business entity in which such Person
or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable it or them (as
a group) ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries (unless such partnership or
joint venture can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries).
Very truly yours,
TEVA PHARMACEUTICALS USA, INC.
By: /s/ Peter R. Terreri
----------------------------------------
Peter R. Terreri
Senior Vice President and
Chief Financial Officer
-5-
<PAGE> 1
Exhibit (b)(8)
LOAN AGREEMENT
BANK HAPOALIM B.M. As of September 13, 1999
1177 Avenue of the Americas
New York, New York 10036
Dear Sirs:
This Letter Agreement, including attached Schedule A, Exhibit A, and any
attached Riders, Exhibits, Schedules, Supplements and Modifications
(collectively, the "AGREEMENT") together set forth our mutual agreement as to
the terms and conditions of the credit facility extended by Bank Hapoalim B.M.
(the "BANK") to Teva Pharmaceuticals USA, Inc. (the "BORROWER"). Certain defined
terms are set forth in Paragraph 16 hereof.
1. The Facility.
The Bank agrees, on the terms and conditions hereinafter set forth, to
make advances to Borrower (hereinafter, the "EXTENSIONS OF CREDIT").
All Extensions of Credit will be secured as provided in this Agreement.
Borrower hereby absolutely and unconditionally promises to pay in
United States dollars to Bank Hapoalim B.M. or to its order, at its
office at 1177 Avenue of the Americas, New York, New York, or at such
other place as it may hereafter designate to Borrower in writing, all
then outstanding Extensions of Credit made pursuant to this Agreement
plus interest thereon at the rates and at such time as set forth in
this Agreement.
2. Amount.
The aggregate amount of Extensions of Credit shall not exceed at any
time $115,000,000.00 (the "LOANS").
3. Note; Subordination.
(a) The Loan pursuant to this Agreement shall be evidenced by
Borrower's promissory note, substantially in the form of
Exhibit A attached hereto (the "NOTE") in the principal amount
of $115,000,000.00; provided, however, that the principal
amount actually payable at any time under the Note shall not
be more than the advances pursuant to this Agreement which
then remain unpaid, as reflected on the Bank's books and
records; provided further, however, that if the aggregate
outstanding advances pursuant to this Agreement shall exceed
the principal amount of the Note, such advances in excess of
the amount of the Note shall nevertheless be payable as
provided in this Agreement. The Extensions of Credit shall be
available to the Borrower no later than December 31, 1999 (the
"COMMITMENT TERMINATION DATE"). The Note shall be dated the
date of this Agreement and be payable on December 31, 2000
(the "EXPIRY DATE"), and if earlier, at such other times as
shall be required by the terms of this Agreement.
(b) The Borrower from time to time agrees that all payments on the
Note shall be subordinate and subject in right of payment, to
the extent set forth in this Section 3(b) to the prior payment
in full in cash of all Senior Debt (as defined below). The
provisions of this Section 3(b) are made for the benefit of
all present and future holders of Senior Debt and their
successors and assigns (irrespective of whether such Senior
<PAGE> 2
Debt was created or acquired before or after the effectiveness
of this Agreement), and shall be enforceable by each of them
directly against the Bank from time to time. This Section 3(b)
may not be amended without the written consent of each holder
of Senior Debt and any purported amendment without such
consent shall be void. THE PROVISIONS OF THIS SECTION 3(B) ARE
SEPARATE AND APART FROM, AND DO NOT AFFECT THE OBLIGATIONS OF
THE GUARANTOR UNDER THE GUARANTY, AND NONE OF THE PROVISIONS
OF THIS SECTION 3(B) SHALL GRANT ANY HOLDER OF SENIOR DEBT THE
RIGHT TO RECEIVE ANY PAYMENTS MADE BY THE GUARANTOR TO THE
BANK OR BANK HAPOALIM B.M., HEAD OFFICE UNDER THIS AGREEMENT
OR THE NOTE, OR TO REQUIRE THE BANK OR BANK HAPOALIM B.M.,
HEAD OFFICE TO TURN OVER TO THE HOLDER OF SENIOR DEBT OR
OTHERWISE ACCOUNT TO SUCH HOLDER FOR AMOUNTS RECEIVED FROM THE
GUARANTOR PURSUANT TO THE PROVISIONS OF THE GUARANTY.
(i) For purposes of this Section 3(b), the term "Senior
Debt" means the principal of (and premium, if any),
and interest on (A) indebtedness of the Borrower in
an aggregate principal amount up to $50,000,000 for
money borrowed under a working capital credit
facility from, or which is evidenced by a note or
similar instrument given to, PNC Bank, National
Association ("PNC") and such other lending
institutions as may join with PNC in providing such
facility, or acquire a participation in such
facility, or as may be successors to institutions in
respect of such facility, and (B) amendments,
renewals, extensions, modifications and refundings of
any such indebtedness, whether any such indebtedness
described in the preceding clause is outstanding on
the date hereof or hereafter created, incurred or
assumed, unless the instrument creating or evidencing
any such indebtedness pursuant to which the same is
outstanding expressly provides that such indebtedness
is not superior in right of payment to the Note.
(ii) Upon any payment or distribution of assets or
securities of the Borrower of any kind or character
(whether in cash, property or securities) upon any
dissolution, winding up or total or partial
liquidation or reorganization of the Borrower,
whether voluntary or involuntary or in a bankruptcy,
insolvency, receivership or other proceeding (an
"Insolvency Event"), all Senior Debt shall first be
paid in full in cash, before the Bank shall be
entitled to receive, directly or indirectly, any
payment of the principal of, or interest on or any
other amount due with respect to this Agreement.
Before any payment of the principal of, or interest
on or any other amount due with respect to the Note
upon any such Insolvency Event, any payment to of the
Borrower of any kind or character (whether in cash,
property or securities) to which the Bank would be
entitled but for the provisions of this Section 3(b),
shall be made by the Borrower or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution,
directly to the holders of Senior Debt to the extent
necessary to pay the Senior Debt in full in cash
after giving effect to any concurrent payment or
distribution to the holders of Senior Debt.
(iii) No direct or indirect payment by or on behalf of the
Borrower of the principal of, or interest on or any
other amount due with respect to, the Note (whether
upon acceleration or otherwise) shall be made if, at
the time of such payment,
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<PAGE> 3
there exists any default or event of default under
any provision of any agreement relating to the Senior
Debt (a "Blocking Event").
(iv) The Bank shall not declare the Note to be due and
payable, and the Note shall not otherwise become due
and payable, prior to its stated maturity upon the
occurrence of any default hereunder unless and until
there shall previously have been an acceleration of
the Senior Debt.
(v) If, notwithstanding the foregoing provisions
prohibiting such payment or distribution, the Bank
shall have received any payment on account of the
Note at any time following the occurrence of an
Insolvency Event or following receipt by such Party
from any holder of Senior Debt of written notice to
the effect that a Blocking Event has occurred, and
before all Senior Debt is paid in full in cash, then
such payment or distribution shall be received and
held in trust for the holders of Senior Debt and
shall be paid over or delivered to the holders of
Senior Debt remaining unpaid to the extent necessary
to pay in full all Senior Debt in cash upon their
delivery to the Bank of reasonable evidence of their
ownership of such Senior Debt together with payment
instructions.
(vi) If the Senior Debt has not been paid in full in cash
at a time at which the Borrower is subject to an
Insolvency Event, the Bank shall duly and promptly
take such reasonable actions as the Borrower may
request to collect and receive all amounts payable by
the Borrower in respect of the Note and to file
appropriate claims or proofs of claim in respect of
the Note.
(vii) No right of the holders of Senior Debt nor any other
present or future holder of the Senior Debt to
enforce the provisions of this Section 3(b) shall at
any time or in any way be prejudiced or impaired by
any failure to act by the holders of Senior Debt or
by any noncompliance by the Borrower with the terms
and provisions and covenants herein, regardless of
any knowledge thereof a holder of Senior Debt may
have or otherwise be charged with. The provisions of
this Section 3(b) are intended to be for the benefit
of, and shall be enforceable directly by, any present
or future holder of the Senior Debt.
(viii) The Bank agrees not to sell, assign or transfer all
or any part of the Note while any Senior Debt remains
unpaid unless such sale, assignment or transfer is
made expressly subject to this Section 3(b).
(ix) Upon the payment by them in full, in cash, of all
Senior Debt, the Bank shall be subrogated to the
rights of the holders of Senior Debt to receive
payments or distributions of cash, property or
securities of the Borrower applicable to Senior Debt
until the Note shall have been paid in full.
(x) The Bank agree to forbear and not take any action the
purpose or effect of which would give them a
preference or priority over the Senior Debt.
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<PAGE> 4
4. Availability.
The Loan may be utilized, at the Borrower's option, upon three business
days' (except in the case of the first drawdown, two business days')
written, telex, telecopy or telephonic (immediately confirmed in
writing) notice to the Bank for loans for periods of one year or such
other periods as the Bank and the Borrower may agree but not later than
one year from the initial drawdown of such Loan (provided no Loan shall
have a maturity later than the Expiry Date).
5. Conditions Precedent.
The Bank shall not be obligated to make any Extensions of Credit to the
Borrower hereunder unless the following conditions have been satisfied:
(a) Prior to the first utilization of credit hereunder, the Bank
shall have received the following documents, each in form and
substance satisfactory to the Bank:
(i) the Note executed by the Borrower;
(ii) the Guaranty by Teva Pharmaceutical Industries Ltd.
(the "GUARANTOR"), in form and substance satisfactory
to the Bank (the "GUARANTY");
(iii) a legal opinion of counsel to the Borrower, in form
and substance satisfactory to the Bank;
(iv) a legal opinion of counsel to the Guarantor, in form
and substance satisfactory to the Bank;
(v) (A) certified copies of the organizational documents
of the Borrower and the Guarantor, (B) certified
copies of the resolutions of the Board of Directors
of the Borrower authorizing, among other things, the
Borrower to execute, deliver and perform this
Agreement and the Note and the resolutions the Board
of Directors (or an authorized committee) of the
Guarantor authorizing, among other things, the
Guarantor to execute, deliver and perform the
Guarantee and (C) certificates of the Secretary or
Assistant Secretary of each of the Borrower and the
Guarantor certifying the names of the officer or
officers of the Borrower and the Guarantor, as the
case may be, who have signed or will sign this
Agreement, the Note, the Guaranty and other documents
provided for in this Agreement or the Guaranty to be
executed by the Borrower or the Guarantor, as the
case may be, together with a sample of the true
signature of each such officer.
(vi) evidence that the aggregate amount of cash
consideration payable pursuant to the Tender Offer
shall not have increased materially, in the
reasonable judgment of the Bank after consultation
with the Borrower, above the amount offered, and all
conditions to the consummation of the Tender Offer
shall have been satisfied.
(b) The obligation of the Bank to make the Loan on the occasion of
any Borrowing is subject to the satisfaction of the following
conditions:
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<PAGE> 5
(i) the fact that the Loan shall have occurred on or
prior to December 31, 1999 and all conditions to the
consummation of the Tender Offer shall have been
satisfied.
(ii) receipt by the Bank of a notice of drawdown as
required by Paragraph 4.
(iii) there shall exist no Event of Default or event which
with the giving of notice or passage of time or both
would become an Event of Default and if requested by
the Bank there shall be delivered to the Bank a
certificate of compliance and non-default, dated the
date of such Extension of Credit, in and form and
substance satisfactory to the Bank.
(iv) All representations and warranties made by the
Borrower to the Bank herein or in any other document
executed in connection herewith shall be true and
correct as if made on the date of such advance shall
be deemed as restated on the date of any advance or
Extension of Credit and shall be true and correct as
if made on such date (except to the extent any such
representation or guaranty speaks as of a different
date).
6. Interest.
(a) Interest on all Loans hereunder shall be payable at the rate
per annum, for each Interest Period, of 0.25% plus the LIBOR
Rate (the "LOAN RATE").
(b) Interest on each Loan shall be payable in arrears on the last
day of each Interest Period.
(c) The Borrower shall pay interest on overdue principal and (to
the extent permitted by applicable law) on overdue interest,
on demand, at the rate of 2% plus the higher of (x) the Loan
Rate applicable to the immediately preceding Interest Period
and (y) the rate designated by the Bank from time to time as
its Prime Rate. The effective interest rate payable hereunder
shall, in any event, never exceed the applicable maximum
lawful interest rate; if any provision(s) of this Agreement
would require any payment in excess of such maximum lawful
interest rate, such provision(s) shall be deemed amended to
provide for interest at such maximum lawful rate during such
time as it would otherwise exceed such rate.
(d) The Loan Rate shall be computed on the basis of the actual
number of days elapsed over a year of 360 days.
(e) If the Bank determines in its sole discretion at the time of
any election of an Interest Period that the LIBOR Rate cannot
be determined or does not represent its effective cost of
maintaining the Loan during such Interest Period, then
interest on the Loan during such Interest Period shall accrue
at the effective cost to the Bank to maintain the Loan during
such Interest Period (as determined by the Bank in its sole
discretion).
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<PAGE> 6
7. Payments, Prepayments and Indemnity.
(a) Mechanics.
All payments hereunder shall be made at the office of the Bank
set forth below in lawful money of the United States of
America and in immediately available funds, without set off,
counterclaim, withholding or deduction of any kind whatsoever.
Any payment due hereunder on a day which is not a Business Day
shall be payable on the next succeeding Business Day. The
Borrower hereby authorizes the Bank, if and to the extent
payment owed to the Bank is not made when due hereunder or
under the Note, to charge from time to time against any of the
Borrower's accounts with the Bank any amount so due.
(b) Prepayment.
(i) In the event any loan is not borrowed on the date
specified therefor in a notice of borrowing, or is
repaid other than at its maturity, which prepayment
may be made only upon not less than thirty days'
prior written notice, the Borrower shall pay to the
Bank an amount (determined by the Bank in its sole
discretion which determination shall be conclusive
and binding absent manifest error) as shall
compensate the Bank for any costs, expenses or loss
(including loss of profit) incurred by it in
connection with its costs of funding such Extension
of Credit; provided that if the repayment occurs at
the end of an Interest Period only fourteen days'
prior written notice is required and no penalty cost
will be imposed against the Borrower.
(ii) If at any time the Bank shall determine that the
making or continuation of loans at the Libor Rate has
become unlawful, its obligation to make such loans
shall be terminated and the Borrower shall forthwith
prepay any such loans then outstanding.
(iii) If, after the date hereof, any change in law,
regulation or directive or in the interpretation
thereof subjects the Bank to any increase in the cost
to it of making or maintaining loans to the Borrower
hereunder, the Borrower shall pay to the Bank, on
demand from time to time, such additional amounts
(determined by the Bank in its sole discretion which
determination shall be conclusive and binding absent
manifest error) as shall compensate the Bank for such
increased cost.
(iv) In the event that after the date hereof the
implementation of or any change in any law or
regulation, or any guideline or directive of any
Governmental Authority or the interest on any
Extension of Credit made to the Borrower, the
Borrower shall pay, on demand, at the rate of 2% per
annum in excess of the greater on any day of (x) the
interest rate otherwise applicable to such Extension
of Credit and (y) the Prime Rate.
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<PAGE> 7
8. Representations and Warranties.
Borrower warrants and represents that, at the time of, and as a
precondition for, each request for an advance hereunder, and at all
times while advances shall be outstanding, the following shall be true
and the Borrower agrees that:
(a) Corporate Existence and Power.
The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of
its incorporation, and has all corporate powers and all
Material governmental licenses, authorizations,
qualifications, consents and approvals required to carry on
its business as now conducted.
(b) Corporate and Governmental Authorizations
The Borrower has full right, power and authority to enter
into, execute and deliver this Agreement, financing statements
(and/or amendments thereto), the Note and all other documents
to be executed and delivered by it in connection herewith or
therewith (collectively the "Loan Documents"); the Borrower
has the full right, power and authority to perform each and
all matters and things required to be performed under the Loan
Documents, and the Loan Documents have been duly authorized,
executed and delivered and constitute the legal, valid and
binding contracts of the Borrower, enforceable in accordance
with their terms (subject to (i) bankruptcy and other laws of
general application affecting the rights of creditors and (ii)
the award by courts of monetary damages rather than specific
performance of contractual provisions involving matters other
than the payment of money).
(c) No Conflict.
The execution and delivery by the Borrower of the Loan
Documents are not, and the performance by the Borrower of any
of the obligations thereunder will not be, in contravention
of, or constitute a Default under, any provision of law or any
charter or by-law provision or any covenant, indenture or
agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or affecting the Borrower
or any property of the Borrower or of any governmental body,
agency or official.
(d) No Claims.
There is no action, suit or proceeding pending or, to the
Borrower's knowledge, threatened against the Borrower or its
properties before any court, administrative or governmental
body, or any arbitration forum, which if determined against
the Borrower would reasonably be expected to affect the
Borrower's ability to enter into any of the Loan Documents or
prejudice in any way the Borrower's ability to fulfill the
obligations set forth in the Loan Documents that are required
to be disclosed in the Borrower's periodic reports under the
Exchange Act and that have not been so disclosed.
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<PAGE> 8
(e) Binding Effect.
This Agreement constitutes a valid and binding agreement of
the Borrower and the Note, when executed and delivered in
accordance with this Agreement, will constitute valid and
binding obligations of the Borrower in each case enforceable
in accordance with its terms excepts as the same may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of
equity.
(f) Environmental Compliance.
(i) The Borrower shall at all times ensure that its
properties and the businesses, operations and
activities conducted thereon, are in full compliance
with all Environmental Laws, except where such
noncompliance could not reasonably be expected to
have a Material adverse effect on the business or
financial condition of the Borrower. The Borrower
shall not permit any hazardous substance to be
brought upon, used, treated, stored, handled,
discharged, released, generated, manufactured or
disposed of in, on or under any of its properties,
except to the extent commonly used in the day-to-day
operations of such properties and only in compliance
with all Environmental Laws, except where such
noncompliance could not reasonably be expected to
have a Material adverse effect on the business or
financial condition of the Borrower.
(ii) If the Borrower shall become aware of or receive any
notice or other communication concerning any actual,
alleged, suspected or threatened violation of or
liability under any Environmental Laws, or that any
representation of the Borrower contained herein
relating to hazardous substances is not or is no
longer accurate in any material respect, including,
but not limited to, any notice or other communication
concerning any actual or threatened environmental
claim, then the Borrower shall deliver to the Bank,
within ten days after receipt of such notice or other
communication, a written description of said
violation, liability, or actual or threatened event
or condition, together with copies of all documents
evidencing same. Receipt of such notice shall not be
deemed to create any obligation on the part of the
Bank to defend or otherwise respond to such
notification. The Borrower shall promptly take any
and all actions and steps necessary to defend such
notification or environmental claim, or remedy any
condition which gave rise to such notification or
environmental claim.
(iii) The Borrower has established accruals for matters
that are probable and reasonably estimable as
required by FASB Statement No. 5, "According for
Contingencies." To the Borrower's knowledge, any
liability that may result from the resolution of
known environmental matters in excess of amounts
accrued therefor will not have a Material Adverse
Effect.
(g) Compliance with ERISA.
Each member of the controlled group of corporations (as
defined in Section 414 (b) of the Internal Revenue Code of
1986), which includes the Borrower and its subsidiaries (the
"TEVA GROUP"), has (i) fulfilled its obligations under the
minimum funding
-8-
<PAGE> 9
standards of Part 3 of Title I of the Employee Retirement
Income Security Act of 1974 (as amended and, together with any
successor statute, "ERISA") and Section 412 of the Internal
Revenue Code of 1986 (as amended and, together with any
successor statute, the "CODE") with respect to each defined
benefit plan (as defined in Section 3 (35) of ERISA)
maintained by a member of the Teva Group (each, a "PLAN") and
(ii) is in compliance in all material respects with the
presently applicable provisions of ERISA and the Code with
respect to each such Plan. No member of the Teva Group has (x)
sought a waiver of the minimum funding standard under Section
412 of the Code in respect of any Plan, (y) failed to make any
contribution or payment required to be made to a Plan or to
any multi-employer plan (as defined in Section 3 (37)(A) of
ERISA) or made any amendment to any Plan which has resulted or
could result in the imposition of a lien or the posting of a
bond or other security under ERISA or the Code or (z) incurred
any liability under Title IV of ERISA other than the liability
to the Pension Benefit Guaranty Corporation ("PBGC") for
premiums under Section 4007 of ERISA.
(h) Taxes.
The Borrower has filed all United States federal income tax
returns and all other material tax returns which are required
to have been filed by it (subject to any available extensions)
and have paid all taxes indicated as due on such returns. The
Borrower has made adequate and reasonable provision for all
material taxes not yet due and payable, if any, and all
material assessments, if any.
(i) Government Regulation.
The Borrower is not registered as a public utility under the
Public Utility Holding Company Act of 1935, as amended, or as
an investment company under the Investment Company Act of
1940, as amended.
(j) Not an Investment Company.
The Borrower is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(k) Full Disclosure.
All written information heretofore furnished by the Borrower
to the Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all
such information hereafter furnished by the Borrower to the
Bank will be, true and accurate in all material respects on
the date as of which such information is stated or certified.
9. Covenants.
Until payment in full of all advances and so long as any amount payable
under the Note remains unpaid and as a precondition for advances:
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<PAGE> 10
(a) Financial Records.
The Borrower will deliver to the Bank:
(i) as soon as available and in any event within 125 days
after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and the
Guarantor as of the end of such fiscal year and the
related consolidated statements of income and cash
flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous
fiscal year, all reported on in a manner acceptable
to the Securities and Exchange Commission by
PricewaterhouseCoopers LLP or other independent
public accountants of nationally recognized standing;
(ii) as soon as available and in any event within 60 days
after the end of each of the first three quarters of
each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and the Guarantor as of
the end of such quarter and the related consolidated
statements of income and cash flows for such quarter
and for the portion of the Borrower's fiscal year
ended at the end of such quarter, setting forth in
the case of such statements of income and cash flows
in comparative form the figures for the corresponding
quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified
(subject to normal year-end adjustments) as to
fairness of presentation, generally accepted
accounting principles and consistency by the chief
financial officer or the chief accounting officer of
the Borrower and the Guarantor;
(iii) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and
(b) above, a certificate of the chief financial
officer (or such officer's designee, designated in
writing by such officer) or the chief accounting
officer of the Borrower stating whether any Default
exists on the date of such certificate and, if any
Default then exists, setting forth the details
thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(iv) within five Business Days after any chief executive
officer, chief financial officer, chief accounting
officer or general counsel or any of their assistants
of the Borrower or the Borrower obtains knowledge of
any Default, if such Default is then continuing, a
certificate of the chief financial officer or the
chief accounting officer of the Borrower setting
forth the details thereof and the action which the
Borrower is taking or proposes to take with respect
thereto;
(v) promptly upon the mailing thereof to the shareholders
of the Borrower and the Guarantor, if applicable,
generally, copies of all financial statements,
reports and proxy statements so mailed;
(vi) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits
thereto and any registration statements on Form S-8
or its equivalent) and reports on Forms 20-F or 6-K
(or their equivalents) which the Guarantor and the
Borrower, if applicable, shall have filed with the
Securities and Exchange Commission;
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<PAGE> 11
(vii) if and when any member of the Teva Group (1) gives or
is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of
the notice of such reportable event given or required
to be given to the PBGC; (2) receives notice of
complete or partial withdrawal liability under Title
IV of ERISA or notice that any multiemployer plan is
in reorganization, is insolvent or has been
terminated, a copy of such notice; (3) receives
notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy
of such notice; (4) applies for a waiver of the
minimum funding standard under Section 412 of the
Internal Revenue Code, a copy of such application;
(5) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice
and other information filed with the PBGC; (6) gives
notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (7)
fails to make any payment or contribution to any Plan
or multiemployer plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of
a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of
the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or
applicable member of the Teva Group is required or
proposes to take; and
(viii) from time to time such additional information
regarding the financial position or business of the
Borrower and its Subsidiaries and the Borrower and as
the Bank may reasonably request.
(b) Maintenance of property; Insurance.
(i) The Borrower will keep all property useful and
necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(ii) The Borrower will maintain, with financially sound
and responsible insurance companies, insurance on all
its respective properties in at least such amounts
and against at least such risks (and with such risk
retention) as are usually insured against in the same
general area by companies of established repute
engaged in the same or a similar business; and will
furnish to the Bank, upon request from the Bank,
information presented in reasonable detail as to the
insurance so carried; provided that, in lieu of any
such insurance, the Borrower may maintain a system or
systems of self-insurance and reinsurance which will
accord with sound practices of similarly situated
corporations maintaining such systems and with
respect to which the Borrower will maintain adequate
insurance reserves, all in accordance with generally
accepted accounting principles and in accordance with
sound insurance principles and practice.
-11-
<PAGE> 12
(c) Maintenance of Existence. The Borrower will preserve, renew
and keep in full force and effect its respective corporate
existence and its respective Material governmental licenses,
authorizations, consents and approvals required to carry on
its business in the ordinary course.
(d) Compliance with Laws. The Borrower will comply in all Material
respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA
and the rules and regulations thereunder), except where the
necessity of compliance therewith is contested in good faith
by appropriate proceedings and for which adequate reserves in
conformity with generally accepted accounting principles have
been established.
(e) Inspection of Property, Books and Records. The Borrower will
keep, proper books of record and account in which full, true
and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and
will permit representatives of the Bank at such Bank's expense
to visit and inspect any of their respective properties, to
examine and make copies from any of their respective books and
records and to discuss their respective affairs, finances and
accounts with its officers, employees and independent public
accountants, all at such reasonable times and as often as may
reasonably be desired.
(f) Consolidations, Mergers and Sales of Assets. The Borrower will
not (i) consolidate with or merge into any other Person or
(ii) sell, lease or otherwise transfer, directly or
indirectly, all or substantially all of the assets of the
Borrower, taken as a whole, to any other Party; provided that
the foregoing restriction does not apply to the consolidation,
merger or amalgamation of the Borrower with or into, or the
conveyance, transfer or lease of all or substantially all of
the property of the Borrower in a single transaction or series
of transactions to, another corporation or entity which
transaction or series of transactions meets the following
requirements (a "Qualified Transaction"):
(i) the successor formed by such consolidation or
amalgamation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease
all or substantially all of the property of the
Borrower as an entirety, as the case may be (the
"Borrower Successor Corporation"), shall be a solvent
corporation organized and existing under the laws of
the United States of America or any state thereof;
(ii) if the Borrower is not the Borrower Successor
Corporation, such corporation shall have executed and
delivered to the Bank an assumption agreement,
providing, among other things, for its assumption of
the due and punctual performance and observance of
each covenant and condition of the Loan Documents
applicable to the Borrower and the Borrower shall
have caused to be delivered to the Bank an opinion of
Willkie Farr & Gallagher or other internationally
recognized independent New York counsel to the effect
that such assumption agreement is enforceable in
accordance with its terms (subject to standard
qualification) and complies with the terms of the
Loan Documents; and
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<PAGE> 13
(iii) Immediately after giving effect to such transaction,
no Default or Event of Default exists or would exist.
If the Borrower is not the Borrower Successor Corporation but
each of the conditions in the foregoing clauses (i) through
(iii), inclusive, is satisfied, any such conveyance or
transfer (but not a lease) of all or substantially all of the
property of the Borrower shall have the effect of releasing
the Party that was the Borrower immediately prior to giving
effect to such transaction (but not the related Borrower
Successor Corporation) from such Party's liability under the
Loan Documents.
(g) Use of Proceeds. The proceeds of the Loans made under this
Agreement will be used by the Borrower for financing the
Tender Offer and any reasonable expenses incidental to the
Tender Offer. None of such proceeds will be used, directly or
indirectly, in violation of any applicable law or regulation,
and no use of such proceeds for general corporate purposes
will include any use for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any Margin Stock
in contravention of Regulation U or Regulation X promulgated
by the Board of Governors of the Federal Reserve System.
(h) Year 2000 Compatibility. The Borrower shall take all
reasonable action necessary to ensure that the computer based
systems of the Borrower are able to operate and effectively
process data including dates on or after January 1, 2000,
except that such action shall not be required to the extent
that the failure to take such action would not have a material
adverse effect on the consolidated financial position or
consolidated results of operations of the Borrower considered
as a whole. At the request of the Bank, the Borrower shall
provide assurance reasonably acceptable to the Bank of the
year 2000 compatibility of the Borrower.
(i) Tax Compliance.
The Borrower will pay to the appropriate governmental
authorities when due, all Federal, state, local and other
taxes, assessments or contributions required to be paid or
deposited by the Borrower ("Taxes"), except that the Borrower
may defer any such payment while the Borrower is diligently
contesting the respective Taxes in good faith by appropriate
proceedings, but any such deferment shall not extend beyond
the time when such unpaid Taxes would become a Lien upon any
of the Borrower's assets. The Borrower will furnish the Bank
promptly at the Bank's request with evidence satisfactory to
the Bank establishing payment of such taxes, assessments and
contributions. In the Bank's discretion, the Bank shall have
the right (but shall not be obligated) to pay any such tax,
assessment or contribution (including any interest or
penalties thereon) for the Borrower's benefit in the event the
Borrower shall fail timely to do so; any such payment shall be
deemed an advance hereunder bearing interest at the rate and
in the manner specified in Paragraph 6 hereof. The Borrower
shall, promptly on demand, reimburse the Bank for any such
payment and any costs and expenses (including reasonable
attorneys' fees) which Bank may incur in connection therewith.
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<PAGE> 14
(j) Adverse Changes.
The Borrower shall promptly notify Bank: (i) of any Material
adverse change in the Borrower's or the Guarantor's financial
condition, operations or business or (promptly upon the
Borrower's or the Guarantor's obtaining receipt of notice or
knowledge thereof) in the Borrower's or the Guarantor's
customers or in the collectability of any of the Accounts
Receivable, (ii) if one or more judgments or other claim in
excess of $5,000,000, alone or in the aggregate, becomes a
lien or encumbrance upon any or all of the Borrower's or the
Guarantor's assets, or (iii) of any Event of Default or event,
which with the giving of notice or passage of time or both
would become an Event of Default and furnish the Bank with a
statement setting forth details of such Event of Default and
the action which the Borrower or the Guarantor proposes to
take with respect thereto.
10. Events of Default.
(a) General.
Each of the following shall be an "EVENT OF DEFAULT":
(i) NONPAYMENT. (A) Any principal of any Loan shall not
be paid when due, or any interest, any fees or any
other amount payable hereunder shall not be paid; or
(B) the prohibition by any Law of payment of any part
of any amount due to the Bank in connection with any
Loan.
(ii) BANKRUPTCY; ADVERSE PROCEEDINGS. (A) The occurrence
of any Debtor Relief Action; (B) the appointment of a
receiver, trustee, committee, custodian, personal
representative or similar official for any Party or
for any Material part of any Party's property; (C)
any action taken by any Party to authorize or consent
to any action set forth in Paragraph 10(a)(ii)(A) or
(B); (D) the rendering against any Party of one or
more judgments, orders and/or decrees and/or
arbitration awards (whether for the payment of money
or injunctive or other relief) which alone or in the
aggregate equal or exceed the amount of $5,000,000,
if they continue in effect for 30 days without being
vacated, discharged, stayed, satisfied or performed;
(E) the issuance or filing of any warrant, process,
order of attachment, garnishment or other lien or
levy against any Material part of any Party's
property; (F) the commencement of any proceeding
under, or the use of any of the provisions of, any
Law against any Material part of any party's
property, including but not limited to any Law (1)
relating to the enforcement of judgments or (2)
providing for forfeiture to, or condemnation,
appropriation, seizure or taking possession by, or on
order of, any Governmental Authority, unless such
proceeding shall be stopped within 30 days of
commencement; (G) the forfeiture to, or the
condemnation, appropriation, seizure, or taking
possession by, or on order of, any Governmental
Authority, of any Material part of any Party's
property; (H) any Party being charged with a crime by
indictment, information or the like, other than as
related to the proceedings disclosed in Item 3 of the
Guarantor's annual report on Form 20-F for the year
ended December 31, 1998.
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<PAGE> 15
(iii) NONCOMPLIANCE. (A) Any Material Default with respect
to this Agreement, of which the Bank has provided
oral or written notice, at the Bank's sole
discretion, to the Borrower; (B) the giving to the
Bank by or on behalf of any Party at any time of any
materially incorrect or incomplete representation,
warranty, statement or information; (C) the failure
of any Party to furnish to the Bank, copies of its
financial statements and such other information
respecting its business, properties, condition or
operations, financial or otherwise, promptly when,
and in such form as, reasonably required or requested
by the Bank, of which the Bank has provided oral or
written notice, at the sole discretion of the Bank,
to the Borrower; (D) any Party's failure or refusal,
upon reasonable notice from the Bank, to permit the
Bank's representative(s) to visit such Party's
premises during normal business hours and to examine
such Party's property and to make photographs and
materials of its books and records (excluding those
copies relating solely to the issues of research and
development and other confidential materials); (E)
any Party's concealing, removing or permitting to be
concealed or removed, any part of its property with
the intent to hinder or defraud any of its creditors;
(F) any Party's making or suffering any Transfer of
any of its property, which Transfer is deemed
fraudulent under the law of any applicable
jurisdiction; (G) the revocation or early termination
of any Party's obligations under any agreement with
or to the Bank (including but not limited to any
amount due to Bank in connection with this
Agreement), or the validity, binding effect or
enforceability of any of such obligations being
challenged by the institution of proceedings with
legal body or Governmental Authority; (H) the failure
of the Borrower to observe or perform any covenant
contained in this Agreement, of which the Bank has
provided oral or written notice, at the Bank's sole
discretion, to the Borrower; (I) any representation,
warranty, certification or statement made by the
Borrower in this Agreement or in any certificate or
other document delivered pursuant this Agreement
shall prove to have been incorrect in any material
respect when make (or deemed made).
(iv) ADVERSE CHANGES. (A) The occurrence of a Material
adverse change in any Party's financial condition;
(B) the dissolution or liquidation (if a corporation,
partnership or other entity) of any Party or such
Party's failure to be and remain in good standing and
qualified to do business in each jurisdiction
Material to such Party (which failure would
reasonably be expected to have a Material adverse
effect on such Party); (C) any Material Default with
respect to any Material agreement other than with or
to the Bank; (D) any Default pursuant to which any
Person shall have the power to effect an Acceleration
of any Material Debt; (E) any Acceleration or demand
of payment with respect to any Material Debt; (F) any
Party's becoming insolvent, as defined in the Uniform
Commercial Code; (G) the Material suspension of any
Party's business; (H) any Party's Material failure to
pay any Material tax when due, except such taxes as
are being contested in good faith by appropriate
proceedings (to the extent such proceedings are
required) and with respect to which the Borrower has
set up an adequate reserve under GAAP for the payment
of such taxes; (I) the expulsion of any Party from
any exchange or self-regulatory organization, if
applicable, or any loss, suspension, nonrenewal or
invalidity of any Party's license, permit franchise,
patent, copyright,
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<PAGE> 16
trademark or the like, which would reasonably be
expected to have a Material adverse effect on such
Party; (J) the occurrence of any event which gives
any Person the right to assert a lien, levy or right
of forfeiture against any Material part of any
Party's Property; or (K) Borrower's failure to give
the Bank notice, within 10 Business Days after
Borrower had notice or knowledge, of the occurrence
of any event which, with the giving of notice and/or
lapse of time, would constitute an Event of Default;
(v) BUSINESS CHANGES. Without the prior written consent
of the Bank there shall occur or take place (A) any
change in Control of any Party, which the Bank, in
its sole discretion, determines that such change is a
Material adverse change to the Borrower's business;
(B) any merger or consolidation involving any Party,
except as may be permitted, with the consent of the
Bank; or (C) any Material change in the nature or
structure of any Party's business; provided that the
foregoing restriction does not apply to a Qualified
Transaction.
(vi) ERISA. Any member of the Teva Group shall fail to pay
when due an amount or amounts aggregating in excess
of $5,000,0000 which it shall have become liable to
pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title
IV of ERISA by any member of the Teva Group, any plan
administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV
of ERISA to terminate, to impose liability (other
than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating or partial withdrawal
from, or a Default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more
members of the Teva Group to incur a current payment
obligation in excess of $5,000,000;
(vii) BENEFICIAL OWNERSHIP. Any person or group of persons
(within the meaning of Section 13 or 14 of the
Exchange Act) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3
promulgated by the SEC under said Act) of 30% or more
of the outstanding shares of common stock of the
Borrower;
(viii) CONTINUING DIRECTORS. At any time Continuing
Directors shall not constitute a majority of the
board of directors of the Borrower ("CONTINUING
DIRECTOR" means each (i) individual who was a
director of the Borrower at the effective date of the
Tender Offer or (ii) individuals who were nominated
or elected to be a director of the Borrower by at
least two-thirds of the Continuing Directors at the
time of such nomination or election).
(b) Bank's Rights Upon Default in Payment.
Upon the occurrence of any Event of Default and such Event of
Default shall not have been cured and shall continue for ten
days, all of Borrower's obligations to the Bank under this
Agreement and the Note not then due shall, at Bank's option,
become forthwith due and payable without further notice or
demand, which Borrower waives,
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<PAGE> 17
provided, however, that such obligations shall automatically
become due and payable upon the occurrence of any Debtor
Relief Action. Upon any such acceleration of any amounts due
to the Bank in connection with this Agreement, the Bank shall
have and may exercise against Borrower all the rights and
remedies granted by, this Agreement or any other document
executed by Borrower at any time or otherwise by law.
11. Term.
This Agreement shall have a term expiring on the Expiry Date and all
amounts due hereunder shall, unless the term shall be extended by
written agreement, be due and payable on the Expiry Date.
12. Miscellaneous.
(a) Actions Not Required.
Bank is not obligated to take any action which Bank is
permitted to take pursuant to this Agreement.
(b) Liability Limited.
Bank shall have no liability for taking or refraining from
taking or for the manner of taking any such action, except for
Bank's gross negligence or willful misconduct, and in no event
for consequential, special or punitive damages. The Bank shall
not have any liability for negligence except solely to the
extent required by law and not disclaim, and except for its
own gross negligence or willful misconduct. In any event, the
Bank shall not have any liability for any special,
consequential or punitive damages.
(c) Obligations Not Assumed.
Nothing contained herein or in any other document and no
action taken by Bank shall be deemed an assumption by Bank of
any obligation to any account debtor or other person.
(d) Notices.
Unless otherwise expressly provided for herein, any notice,
request, approval, demand or other communication provided for
herein shall be in writing and deemed effectively given or
made when mailed by registered or certified mail, postage
prepaid and return receipt requested, addressed to the party
for whom intended at such party's address stated herein or
such other address as either party may hereafter designate for
itself by similar notice, or when actually received if given
or made in any other manner, except that notice of change of
address shall be deemed given only when received.
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<PAGE> 18
(e) Waivers, Including Jury Trial Waiver.
(i) In General.
No provision hereof and no right or remedy of either
Party hereto may be waived by any future action,
course of dealing or otherwise, except in writing
signed by the other Party hereto. Borrower waives
presentment, protest and notice of dishonor of any
instrument. No payment due to Bank hereunder shall be
reduced by Borrower for any reason whatsoever, and
Borrower hereby waives the right to assert any right
of offset, recoupment or other deduction and any
counterclaim in any litigation or other proceeding in
which Bank may seek to enforce Bank's rights and
remedies under this Agreement. The Borrower waives
all rights to special, consequential or punitive
damages arising from, out of or in connection with
this Agreement or any performance related to it. The
Bank waives all rights to punitive damages arising
from, out of or in connection with this Agreement or
any performance related to it. Neither any failure
nor any delay by either Party to exercise any right
in connection with this Agreement shall operate as a
waiver thereof or preclude any other or further
exercise thereof nor shall any single or partial
waiver of any such right preclude any other or
further exercise thereof, or the exercise of any
other right.
(ii) Waiver of Right to Jury Trial.
Both Borrower and Bank waive the right to a trial by
jury in any litigation arising from, out of or in
connection with this Agreement or any transactions
contemplated by this Agreement.
(f) Governing Law, Changes, No Third Party Beneficiaries.
This Agreement shall be governed by the internal laws of New
York without giving effect to conflict of laws rules; may not
be changed or terminated orally; and shall not be deemed for
the benefit of any third party.
(g) Submission to Jurisdiction.
The Borrower and the Bank submit to the jurisdiction of
federal and state courts located within New York State and
agree, to the extent permitted by law, that service of process
upon Borrower and the Bank (in the same manner as provided in
Paragraph 12(d) of this Agreement for the giving of notices)
shall be sufficient in any action or proceeding brought by the
Bank or the Borrower in connection with this Agreement.
(h) Partial Unenforceability.
Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non authorization, without
invalidating the remaining provisions of this Agreement in
that or any other jurisdiction and without affecting the
validity, enforceability or legality of such provision in any
other jurisdiction.
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<PAGE> 19
(i) Parties.
(i) This Agreement is binding upon each of the Parties
hereto and its respective successors and permitted
assigns and shall inure to the benefit of each of the
Parties hereto and its respective successors and
permitted assigns.
(ii) The obligations under this Agreement shall continue
in force and shall apply notwithstanding any change
in the membership of any partnership executing this
Agreement, whether arising from the death or
retirement of one or more partners or the accession
of one or more new partners.
(j) Captions.
Captions are inserted in this Agreement for reference purposes
only and shall not modify, explain or limit the texts to which
they refer.
(k) Counterparts.
This Agreement may be executed in counterparts, each of which
when so executed, shall be deemed an original, but all such
counterparts shall constitute one and the same instrument.
13. Expenses; Indemnification.
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses of the Bank, including reasonable fees and
disbursements of special counsel for the Bank, in connection
with preparation and administration of this Agreement, any
waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurs by the Bank,
including reasonable fees and disbursements of counsel, in
connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrower agrees to indemnify the Bank, its respective
affiliates and respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold
each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind,
including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or any
actual or proposed use of proceeds of the Loans hereunder;
provided that (i) no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of
competent jurisdiction and (ii) the Borrower shall not be
liable for any settlement entered into by an Indemnitee
without its consent (which shall not be unreasonably
withheld).
(c) Each Indemnitee agrees to give the Borrower prompt written
notice after it receives any notice of the commencement of any
action, suit or proceeding for which such Indemnitee may wish
to claim indemnification pursuant to subparagraph (b). The
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<PAGE> 20
Borrower shall have the right, exercisable by giving written
notice within fifteen Business Days after the receipt of
notice from such Indemnitee of such commencement, to assume,
at the Borrower's expense, the defense of any such action,
suit or proceeding; provided, that such Indemnitee shall have
the right to employ separate counsel in any such action, suit
or proceeding and to participate in the defense thereof, but
the fees and expenses of such separate counsel shall be at
such Indemnitee's expense unless (1) the Borrower shall have
agreed to pay such fees and expenses; (2) the Borrower shall
have failed to assume the defense of such action, suit or
proceeding or shall have failed to employ counsel reasonably
satisfactory to such Indemnitee in any such action, suit or
proceeding; or (3) such Indemnitee shall have been advised by
independent counsel in writing (with a copy to the Borrower)
that there may be one or more defenses available to such
Indemnitee which are in conflict with those available to the
Borrower (in which case, if such Indemnitee notifies the
Borrower in writing that it elects to employ separate counsel
at the Borrower's expense, the Borrower shall be obligated to
assume the expense, it being understood, however, that the
Borrower shall not be liable for the fees or expenses of more
than one separate firm of attorneys, which firm shall be
designated in writing by such Indemnitee).
14. Continuing Representations and Warranties.
All representations and warranties in this Agreement, and in all other
Related Documents, statements, certificates, instruments and documents
furnished to Bank in connection with this Agreement, are continuing and
shall be deemed repeated each time an advance is made to Borrower, and
shall survive until all amounts due in connection with this Agreement
have been paid in full.
15. Transfer by Bank.
(a) Without limiting Bank's rights hereunder, Bank may Transfer
all or any part of (i) this Agreement; (ii) the Note, (iii)
any other obligations of Borrower to Bank, (iv) any guaranty
of, any subordination to, and any other rights of Bank against
any third party(ies) in connection with, this Agreement, (v)
any instruments or documents relating to or evidencing any of
the foregoing, and/or (v) Bank's rights and, if any,
obligations with respect to any of the foregoing, all of which
are referred to in this Agreement as "Transferred Items".
(b) In the event Bank shall make any such Transfer, then to the
extent provided by the Bank with respect to such Transfer the
transferee shall have the obligations, rights, powers,
privileges and remedies of the Bank. The Bank shall
thereafter, to the extent of such Transfer, be forever
relieved and fully discharged from all liability and
responsibility, if any, that it may have had to Borrower with
respect thereto. Bank shall retain all its rights and powers
with respect to any Transferred Items to the extent not so
Transferred.
(c) Without limiting the foregoing, the provisions of this
Agreement regarding set-off rights shall apply to any account
of Borrower with, and any claim of Borrower against, any
Transferee to the extent of any such Transfer.
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<PAGE> 21
(d) Bank is authorized to disclose any information it may have or
acquire about Borrower to any prospective or actual
Transferee.
(e) If the Note and/or this Agreement is not a negotiable
instrument, then Borrower hereby waives all defenses (except
such defenses as may be asserted against a holder in due
course of a negotiable instrument) which Borrower may have or
acquire against any Transferee who takes the Note, and/or this
Agreement, or any complete or partial interest in them, for
value, in good faith and without notice that any obligation
thereunder is overdue or has been dishonored or of any defense
against or claim to them on the part of any person.
(f) Borrower may not assign any of its rights or delegate any of
its obligations under this Agreement without the Bank's prior
written consent; any such assignment or delegation without
said consent shall be void.
16. Definitions.
As used in this Agreement, the following words shall, unless otherwise
defined herein, have the following meanings: (1) ACCELERATION: any
acceleration of payment or requirement of prepayment of any Debt, or
any Debt's becoming due and payable prior to stated maturity. (2)
AFFILIATE: when used with respect to the Borrower, any other Person
controlling, controlled by, or under common control with the Borrower.
(3) BENEFIT ARRANGEMENT: at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a
multiemployer plan and which is maintained or otherwise contributed to
by any member of the Teva Group. (4) BUSINESS DAY: any day on which
banks are regularly open for business in New York City. (5) CODE:
meaning set forth in Paragraph 8(g). (6) CONTROL: the power, alone or
in conjunction with others, directly or indirectly, through voting
securities, by contract or otherwise, to direct or cause the direction
of a Person's management and policies. (7) DEBT: any Person's
obligation of any sort (in whole or in part) for the payment of money
to any Person, whether (a) absolute or contingent, (b) secured or
unsecured, (c) joint, several or independent, (d) now or hereafter
existing, or (e) due or to become due. (8) DEBTOR RELIEF ACTION: the
commencement by any Party or (unless dismissed or terminated within 30
days) against any Party of any proceeding under any law of any
jurisdiction (domestic or foreign) relating to bankruptcy,
reorganization, insolvency, arrangement, composition, receivership,
liquidation, dissolution, moratorium or other relief of financially
distressed debtors, or the making by any Party of an assignment for the
benefit of creditors. (9) DEFAULT: any breach, default or event of
default under, or any failure to comply with, any provision of this
Agreement. (10) ENVIRONMENTAL LAWS: all federal, state, local and
foreign laws relating to pollution or protection of the environment,
including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, surface water,
ground water, or land), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes, and any and all regulations,
codes, plans, orders, decrees, judgments, injunctions, notices or
demand letters issued, entered, promulgated or approved thereunder.
(11) ERISA: meaning set forth in Paragraph 8(g). (12) EVENT OF DEFAULT:
the meaning set forth in Paragraph 10. (13) FACILITY: any line, loan,
letter of credit, other credit facility or other arrangement between
the Bank and any Person. (14) GOVERNMENTAL AUTHORITY: any domestic or
foreign, national or
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<PAGE> 22
local, (a) government, (b) governmental, quasi-governmental or
regulatory agency or authority, (c) court or (d) central bank or other
monetary authority. (15) INSTRUMENT: the meaning assigned to it under
the Uniform Commercial Code in any relevant jurisdiction. (16) INTEREST
PERIOD: a period of one, two, or three months or such other period as
the Borrower and Bank may agree, with the first Interest period
commencing on the date hereof and each subsequent Interest Period
commencing on the last day of the immediately preceding Interest
Period, provided that no Interest Period shall extend beyond the final
maturity date of this Agreement, and if an Interest Period would
otherwise end a non-Business Day it shall end on the next succeeding
Business Day, unless such day would be in another calendar month, in
which case it shall end on the next preceding Business Day. (17) LAW:
any treaty, law, regulation, rule, judgment, order, decree, guideline,
interpretation or request issued by any Governmental Authority. (18)
LIBOR: "Libor Rate" for each loan to which it applies shall mean the
rate or rates established by the New York Branch of the Bank two
Business Days prior to the first Business Day of the applicable
Interest Period, by applying the following: (i) the British Bankers
Association ("BBA") Interest Settlement Rates for U.S. Dollars, as
defined in the BBA official definitions and reflected on the Telerate
BBA pages, for the applicable amounts and interest periods, which rates
reflect the offered rates as which deposits are being quoted to prime
banks in the London Interbank Market at 11:00 A.M. London Time
calculated as set forth in said BBA official definition; or (ii) such
other recognized source of London Eurocurrency deposit rates as the
Bank may determine from time to time. In the event the applicable BBA
page or pages shall be replaced by another Telerate page or other
Telerate pages for quoting London Eurocurrency rates, then rates quoted
on said replacement page or pages shall be applied. If the Bank
determines that London Eurocurrency rates are no longer being quoted
(temporarily or permanently) on any Telerate pages or that Telerate is
no longer functioning (temporarily or permanently) in substantially the
same manner as on the date hereof, then the Bank shall notify the
Borrower of a substitute, publicly available reference for the
determination of the Libor Rate. If the Bank determines in its sole
discretion that the Libor Rate cannot be determined or does not
represent its effective cost of maintaining Loans under this Agreement,
then interest shall accrue at the effective cost to the Bank to
maintain the Loans (as determined by the Bank in its sole discretion.
(19) LIEN: with respect to any asset, any mortgage lien, pledge,
charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a
security interest in respect of such asset. For the purpose of this
Agreement, the Borrower and any of its subsidiaries shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to
such asset. (20) LOAN DOCUMENTS: meaning set forth in Paragraph 8(b).
(21) MARGIN STOCK: "margin stock' as such term is defined in Regulation
U of the Board of Governors of the Federal Reserve System, as in effect
from time to time. (22) MATERIAL: material to the business or financial
condition of any Party on a consolidated or consolidating basis. (23)
PARTY: (a) any maker, co-maker or endorser of any agreement of a nature
Material to the Bank evidencing, or any guarantor, surety,
accommodation party or indemnitor with respect to, or any Person that
provides any collateral as security (all of the foregoing being of a
nature Material to the Bank) for, or any Person that issues a
subordination, comfort letter, standby letter of credit, repurchase
agreement, put agreement, option, other Agreement or other credit
support of a nature Material to the Bank with respect to any amounts
due to the Bank in connection with this Agreement; and (b) any Person
(i) that is under the Control of any Party and (ii) whose business or
financial condition is Material to such Party and to this Agreement.
(24) PERSON: any person, partnership, joint venture, company,
corporation, unincorporated organization or association, trust, estate,
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<PAGE> 23
Governmental Authority, or any other entity. (25) PLAN: meaning set
forth in Paragraph 8(g). (26) PRIME RATE: the Bank's stated prime rate
as reflected in its books and records as such prime rate may change
from time to time. The Bank's determination of its Prime Rate shall be
conclusive and final. The Prime Rate is a reference rate and not
necessarily the lowest rate charged by the Bank. (27) PROPERTY: any
property, whether real, personal or mixed, and whether tangible or
intangible. (28) TENDER OFFER: the offer to purchase for cash all the
outstanding shares of common stock, par vale $.01 of Copley
Pharmaceutical, Inc. at $11.00 per share upon the terms and conditions
set forth in the Offer to Purchase dated August 16, 1999 and related
Letter of Transmittal as filed on August 16, 1999 with the Securities
and Exchange Commission as exhibits to Schedule 14D-1. (29) TEVA GROUP:
meaning set forth in Paragraph 8(g). (30) TRANSFER: any negotiation,
assignment, participation, conveyance, grant of a security interest,
lease, delegation, or any other direct or indirect transfer of a
complete or partial, legal, beneficial, economic or other interest or
obligation.
17. NO REPRESENTATIONS OF NON-ENFORCEMENT. BORROWER HEREBY CERTIFIES THAT
NONE OF THE BANK'S REPRESENTATIVES OR AGENTS HAS REPRESENTED, EXPRESSED
OR OTHERWISE INDICATED TO BORROWER OR ANY OF ITS AGENTS OR
REPRESENTATIVES THAT, IN THE EVENT OF LITIGATION OR OTHERWISE, THE BANK
WILL NOT SEEK TO ENFORCE, OR WILL WAIVE OR MODIFY, ANY OF THE
PROVISIONS OF THIS AGREEMENT.
Very truly yours,
TEVA PHARMACEUTICALS USA, INC.
By:/s/ Peter R. Terreri
--------------------------------------------
Name: Peter R. Terreri
Title: Senior Vice President/Chief Financial
Officer
Address: 650 Cathill Road
Sellersville, PA 18960
CONSENTED AND AGREED TO BY:
BANK HAPOALIM B.M.
By: /s/ Shlomo Braun
--------------------------------------------------
Name: Shlomo Braun
Title: Senior Vice President/Manager of New York Branch
By: /s/ Eli Eisdorfer
--------------------------------------------------
Name: Eli Eisdorfer
Title: First Vice President
TEVA PHARMACEUTICAL INDUSTRIES LTD.,
as Guarantor
By: /s/Dan Suesskind September 14, 1999
--------------------------------------------------
Name: Dan Suesskind
Title: Chief Financial Officer
-23-
<PAGE> 1
Exhibit (b)(9)
Customer's Name Address & Area Code Corporation Reg. No. Telephone No.
Teva Pharmaceuticals 1510 Delp Drive (001)215 256 8400
USA Inc. Kulpsville, PA 19443
To
Bank Hapoalim B.M.
New York Branch
Date: September 13, 1999
DEED OF CONTINUING GUARANTEE UNLIMITED IN AMOUNT
WHEREAS Teva Pharmaceuticals USA, Inc. (hereinafter referred to as "THE
CUSTOMER") has received and/or may receive from time to time, from Bank Hapoalim
B.M. (hereinafter referred to as "THE BANK"), credit, documentary credit,
overdrafts, loans, deeds of indemnity and guarantees, in Israeli currency and/or
foreign currency, for the benefit of the Customer or others at the Customer's
request, discounting of cheques/bills, purchase of cheques/bills, execution of
payments, granting of time, banking facilities, banking services and/or
financial services and/or services in connection with securities and/or
financial instruments (hereinafter jointly and severally referred to as "BANKING
SERVICES"); and
WHEREAS the Customer owes and/or may owe the Bank, from time to time, various
sums of money, expressed in Israeli currency or in foreign currency, on account
of banking services and/or on account of any other engagements and/or
transactions with or through the Bank, whether pertaining to banking services
or matters which are not banking services and/or other matters (hereinafter
"DEBTS OF THE CUSTOMER"); and
WHEREAS we, the undersigned, agree to guarantee to the Bank the full and timely
payment of the debts of the Customer;
NOW THEREFORE WE HEREBY WARRANT, AGREE, UNDERTAKE AND GUARANTEE to the Bank as
follows:
THE GUARANTEE
1. We hereby absolutely, unconditionally and without any reservation,
guarantee to the Bank the full and timely payment of all and any amounts
due and/or which may become due to the Bank from the Customer from time to
time, on account of the debts of the Customer, without reference to and
notwithstanding any subordination provisions contained in the documents
evidencing the debt of the customer, irrespective of whether due from the
Customer alone or together with others, or whether the Customer has already
obligated himself in respect thereof or may obligate himself in respect
thereof in the future, whether the respective banking services and/or
amounts have already been or may be granted, advanced or paid to the
Customer or on the Customer's behalf or at his request or for his account,
whether due from the Customer in his capacity as principal debtor,
guarantor or otherwise, whether ascertained due or due contingently,
directly or indirectly, in each case together with interest, charges,
commissions, linkage differentials and other expenses of any kind
(hereinafter jointly and severally referred to as - "THE SAID AMOUNTS").
2. THE AMOUNT WE GUARANTEE AND UNDERTAKE TO PAY THE BANK UNDER THIS DEED OF
GUARANTEE IS UNLIMITED IN AMOUNT AND IS HEREINAFTER REFERRED TO AS - "THE
AMOUNT OF THE GUARANTEE".
3. We shall pay the Bank at any time and from time to time, within seven days
after receiving the Bank's first written demand, any amount which the
Bank may demand from us according to this Deed of Guarantee up to the
Amount of the Guarantee. Any amount on account of the said amounts not
paid to the Bank by us upon the Bank's first demand shall bear default
interest at the maximum rate prevailing at the Bank at such time with
respect to the kinds of credit secured by this guarantee, or at the rate
of interest charged by the Bank on excess balances in revolving debitory
accounts or in current account, or at the rate of interest charged by the
Bank on excess balances applicable to the account to which the guaranteed
amount was debited, whichever is the highest, (hereinafter - "INTEREST AT
THE MAXIMUM
<PAGE> 2
2
RATE"), until the full and final payment of the aforesaid amount by us,
without affecting any other rights of the Bank.
4. We shall pay the Bank the Amount of the Guarantee, without the Bank being
obliged to furnish us with any accounts or any other proof as to any
default on the part of the Customer in the fulfillment of his obligations
to the Bank and without the Bank first taking any action against the
Customer for the collection of the said amounts from the Customer, his
liquidator, trustee, estate, his other guarantors or others, or from any
securities given to the Bank on behalf of the Customer, his other
guarantors or others. In the event that the Bank does take any action which
is as yet incomplete, we shall nevertheless be obliged to pay immediately
to the Bank the Amount of the Guarantee, and we may not postpone the
payment thereof until any action which the Bank may take has been
consummated.
VALIDITY OF THE GUARANTEE
5. The Amount of the Guarantee and the guarantee shall not be influenced,
affected or diminished by any composition of debts, winding up, bankruptcy
or death, as the case may be, of the Customer, including any scheme or
arrangement approved by any court or other compromise or arrangement made
by the Customer. Notwithstanding the foregoing, the Bank may demand from us
any amounts up to the Amount of the Guarantee. In any case of composition
of debts, bankruptcy, winding up, death or any other scheme or arrangement
of the Customer, as the case may be, the Bank may claim the aforesaid
amounts as a creditor in bankruptcy or in winding up or in any other scheme
or arrangement or agree to and receive any compromise payment without
taking into account any payment made and/or which may be made by us to the
Bank pursuant hereto. We undertake not to claim in such cases in
competition with the Bank and not to claim from the Bank any amount
received by the Bank in this way or in any other way for any reason
whatsoever. We shall not claim any debt or payment or enter proof thereof
in any bankruptcy or winding-up proceedings or in any other arrangement or
compromise with respect to the Customer until such time as the Bank shall
receive in full all the amounts due or which may become due to the Bank
from the Customer.
6. The Bank is not obliged to obtain from the Customer any further security
or guarantee for the payment of the said amounts. If at the time of or
prior to the signing of this Deed of Guarantee we were aware of the fact
that the Bank was about to obtain various securities or further guarantees,
even if the names of other guarantor's appeared in this Deed of Guarantee
and the Bank did not receive those securities and/or did not record same as
required by law, or those other guarantors did not sign any guarantees or
this guarantee - the validity of this guarantee shall not be affected and
we shall fulfill all of our obligations hereunder.
7. We agree that the Bank may from time to time, without notifying us
thereof:
(a) discontinue, vary, reduce, or renew any credit or banking service to,
or any engagement with, the Customer;
(b) grant any extension of time or other concession or indulgence to the
Customer or others or to the guarantors or to any one or some of us;
(c) substitute, renew, amend, release, discharge, realise or refrain from
realising any securities or guarantees, held or which may be held by
the Bank, whether obtained from the Customer or others, from
guarantors, or from us;
(d) settle, waive or make any arrangement with the Customer or with
guarantors for the Customer or with any one or some of us;
(e) cause the non-fulfillment and/or the variation of any obligation of
the Customer in connection with the granting of banking services or
cause the non-fulfillment and/or any variation of any obligation
guaranteed by us and/or others for which we and/or others are liable;
(f) refrain from notifying us of the non-fulfillment of any obligations by
the Customer or by other guarantors and/or by us or any one or some of
us and defer or hold over any demands against us pursuant hereto,
without the aforesaid being deemed to be a precedent, waiver or
negligence on the part of the Bank or any of its rights being deemed
discharged or having lapsed.
<PAGE> 3
3
In any such case, even if thereby damage has been caused, our guarantee
shall remain unchanged and in full force, shall not be affected nor the
amount thereof decreased, and all our obligations shall remain unaltered. To
prevent any doubt, we hereby agree that if the Bank does any one of the
abovementioned acts we shall have no right of option, rescission or any
other right in connection therewith under the Guarantee Law, 5727-1967, as
subsequently amended or replaced, and we hereby expressly waive all these
rights.
8. This guarantee shall remain if full force for its full amount, even if the
Bank reaches a settlement with the Customer, grants the Customer or any of
the guarantors (including any one or more of us who are signatories hereto)
any extension of time, waiver, concession or indulgence, releases any
collateral securities which the Bank received on behalf of the Customer,
releases any guarantors or refrains from accepting any guarantees or
collateral securities which were supposed to have been given to the Bank
(including such guarantors whose names appear below or guarantees from any
one or some of them) or causes the non-fulfillment or variation of any
undertaking of the Customer or the Customer's guarantors and our undertaking
to pay to the Bank the Amount of the Guarantee shall neither be affected nor
diminished if the obligation of the Customer and/or his guarantors towards
the Bank is defective or invalid for any reason, and even if the Customer
lacked the legal capacity or authority to enter into any engagement for the
receipt of banking services and/or to pay the debts of the Customer or if
any contentions are raised against the Bank regarding the indebtedness of
the Customer, or if the right of the Bank to claim payment from the Customer
of the debts of the Customer has lapsed and/or will lapse due to
prescription, or if the Customer denies his liability towards the Bank or if
the Customer has or raises any contentions against the Bank.
In any such case, the aforesaid obligations, as far as we are concerned,
shall, for the purposes hereof, be deemed to be valid, complete, effective,
unquestionable and unimpeachable and we hereby declare that we shall have no
cause for action against the Bank. All of our obligations pursuant hereto
shall remain in full force, and we hereby waive in advance any right or plea
allowed in such cases by the Guarantee Law 5727-1967, as subsequently
amended or replaced, or by any law.
9. Where we or any one of us or the Customer is/are a legal entity, whether
incorporated or unincorporated, or a trustee, an executor of a will or
administrator of an estate, or party to a joint account held with the Bank,
or any organisation or body comprising any combination of bodies, then our
obligations hereunder shall not be affected by any alteration of our name,
constitution or composition or that of the Customer's.
SECURITIES, SET-OFF AND APPLICATION OF PAYMENTS
10. (a) The Bank shall have the rights of possession, lien and set-off over any
amounts, assets and rights including securities, coins, gold, bank
notes, documents in respect of goods, insurance policies, bills,
assignments of rights, deposits, collaterals and their countervalue,
held by the Bank or under its control at any time for us or on our
behalf, including such as have been delivered to the Bank for
collection, security, safe-keeping or otherwise.
At any time that we and/or any of us may owe the Bank any amounts
pursuant hereto, or are liable to be indebted to the Bank or may be
conditionally indebted to the Bank, the Bank shall be entitled to retain
the said assets until payment in full of the Amount of the Guarantee or
to realise them by selling them and applying the countervalue thereof
in whole or in part to the payment of the Amount of the Guarantee or
leave the countervalue thereof with the Bank until the said amounts have
been paid by the Customer.
In the event that sums capable of being applied to the Amount of the
Guarantee are deposited in foreign currency, we hereby give to the Bank
in advance instructions to sell the credit balance in foreign currency
at a rate to be fixed by the Bank or which it can obtain for same at
such time, as set forth in Clause 10(c), and to apply the proceeds to
the Amount of the Guarantee, after deduction of any costs, expenses,
charges or commissions.
(b) Without derogating from the Bank's right of lien in accordance with
sub-clause (a) above, the Bank may at any time, but shall not be
obliged:
(i) To apply to the Amount of the Guarantee, any amounts owed to us by
the Bank in any account, in Israeli currency or in foreign currency,
in any manner or for any reason (even before the
<PAGE> 4
4
maturity of the amounts owed to us by the Bank as aforesaid, against which
set-off will be made).
(ii) To purchase for our account, any amount in foreign currency which may be
required for payment of any amount on account of the Amount of the
Guarantee as yet unpaid, or to sell any foreign currency standing to our
credit with the Bank and to apply the proceeds to the payment of any
amount on account of the Amount of the Guarantee as yet unpaid.
(iii) To debit any of our accounts with any amount required for the payment of
any amount on account of the Amount of the Guarantee as yet unpaid.
However, if the state of any account does not allow it to be debited by
the Bank in order to effect final payment of any amount, the Bank may
refrain from so doing, and if the Bank has acted accordingly, the Bank may
reverse any such debit and treat any amount the debit of which was
reversed as an unpaid amount on account of the Amount of the Guarantee and
accordingly to take whatever action it sees fit pursuant to the provisions
hereof.
(iv) In any event, the Bank may effect set-off without any prior notice.
However, in the following cases the Bank may effect such set-off by giving
us 10 (ten) days notice prior to effecting such set-off:
(1) In case of applying any amounts prior to their maturity.
(2) In case of applying any time deposit which but for such application
would have been automatically extended or renewed, so that certain
rights or benefits would have accrued to us.
Notwithstanding the foregoing, if the delay in effecting such application
might be detrimental to the Bank or affect any of its rights, such
application may be made immediately. Moreover, where notice has been sent
to us and in the course of the 10-day period an attachment order or a
receivership notice affecting us or any one or some of us is received or a
similar event occurs, such application may be made immediately.
(c) Any purchase or sale under sub-clauses (b)(i) and (ii) above, shall be
effected at the rate of exchange prevailing at the Bank, out of the
amounts in Israeli currency or foreign currency, as the case may be,
standing to our credit with the Bank, or which may be obtained by
realising collaterals given or which may be given by us to the Bank.
The term "the rate prevailing at the Bank" shall mean, with respect to any
purchase of foreign currency for our account, the highest rate for cheques
and transfers at which the Bank at any relevant time sells to its
customers the relevant foreign currency against Israeli currency, in
addition to any conversion charge, tax, levy, compulsory payments or any
other similar payments; and with respect to any sale of foreign currency
from our account, the lowest rate for cheques and transfers at which the
Bank at any relevant time purchases from its customers the relevant
foreign currency against Israeli currency, after deducting any conversion
charge, tax, levy, compulsory payments or any other similar payments.
(d) We hereby declare that we are aware of the fact that in such cases where
the Bank may use its rights of set-off prior to the maturity of any of our
deposits or any part of them, our rights may be affected (for example in
relation to interest rates, linkage differences, exchange differences,
rights to bonuses or loans, tax exemptions or reductions, deductions at
source, the right not to be debited with charges and fees necessarily
resulting from making any such set-off, if according to the terms
governing any such deposit we had such rights). We shall bear all the
usual costs and charges charged by the Bank as a result of any such
set-off.
11. The Bank may at any time and at its own discretion,
(a) debit any of our accounts including any account maintained by us
jointly and severally with other account holders with any amount due
or which may become due from us to the Bank as herein provided;
<PAGE> 5
5
(b) credit any amount howsoever received from us or on our behalf to
whichever account the Bank may deem fit;
(c) transfer any amount standing to the credit of whichever of our
accounts to any other of our accounts;
(d) credit any amount received from the Customer or on his behalf or for
his account or by the realisation of any collateral held by the Bank,
in favour of any account which the Bank deems fit. The Bank may also
hold or retain any such amount as a deposit without applying same in
reduction of the debts of the Customer and which are guaranteed by us
hereunder, and the application of any such amount as aforesaid shall
not affect the validity of our guarantee hereunder.
NATURE AND TERMINATION OF THE GUARANTEE
12. This guarantee shall serve as a continuing and revolving security and shall
remain in full force and effect notwithstanding any settlement of accounts
between the Bank and the Customer and shall be binding upon us and our
substitutes (including our guardians, estates, executors, liquidators,
trustees, receivers and any of our successors) for 30 days after the
receipt by the Bank, at the branch of the Bank first above written, of our
written notice with respect to the termination of the guarantee signed by
all the guarantors whose signatures appear on this Deed of Guarantee,
coupled with all the amounts which are due to the Bank from the Customer
at such time. Our aforesaid notice shall not affect our guarantee and
liability for any debts and obligations incurred by the Customer prior to
the receipt of our aforesaid notice, the payment of which has not yet
fallen due or for which the Customer became liable during the said 30 days.
13. Without derogating from the provisions of Clause 8 hereof, this guarantee
is independent of any other securities or guarantees and shall not be
influenced or affected by them or by the Bank receiving securities or
guarantees which are defective or without value and/or did or does not
register such securities according to law.
We hereby waive any right to be assigned or to participate in any other
securities to which the Bank is or may become entitled, in connection with
the payment of the said amounts. We shall not take any action the purpose
of which is to obtain any rights and/or advantages with respect to the
said securities notwithstanding the payment by us in full of the Amount of
the Guarantee.
14. Without derogating from any of the other provisions herein contained, any
variation of our obligations is subject to the receipt of the prior
written consent of the Bank. Any other consent whether attributed to
verbal statements or to any waiver or failure to act and/or to any other
form of conduct which is not reduced to writing shall not be deemed to be
consent on the part of the Bank.
INDEMNITY
15. In addition to and without affecting or derogating from the provisions
hereof, this guarantee constitutes an undertaking to indemnify and/or
compensate and we hereby undertake to indemnify and/or compensate the Bank
in an amount up to the Amount of the Guarantee, for any damages, expenses
and pecuniary loss incurred by the Bank in connection with the extension
of banking services to the Customer and/or unconnected therewith, all in
accordance with the provisions hereof which shall apply mutatis mutandis.
THE BANK'S BOOKS
16. (a) We hereby confirm that the Bank's books, accounts and entries shall
be binding upon us, shall be deemed to be correct and shall serve as
prima facie evidence against us in all their particulars, inter alia
pertaining to the calculation of the Amount of Guarantee and/or the
said amounts and/or the debts of the Customer, the particulars of the
bills, guarantees and other securities and any other matter related
hereto.
(b) We hereby confirm receipt of the Bank's notification that according
to the Protection of Privacy Law, 5741-1981:
(i) All the particulars furnished or which may be furnished by us to
the Bank may be used by the Bank in the normal course of its
operations, at its own discretion;
<PAGE> 6
6
(ii) All the particulars furnished or which may be furnished by us to
the Bank may be stored in keeping with the Bank's requirements
from time to time in data pools of the Bank and/or of parties
associated with the Bank from time to time with respect to
computer and data processing and warehousing services,
and we hereby confirm our agreement thereto.
ASSIGNMENT OF THE GUARANTEE
17. The Bank may at any time at its own discretion and without our consent
being required, transfer and/or assign all or any of its rights arising
from this Deed of Guarantee, in whole or in part, including the securities,
and any transferee and/or assignee may also retransfer and/or reassign the
said rights including the said securities without any further consent from
us being required. The transfer and/or assignment may be effected in any
way the Bank or any subsequent transferor and/or assignor may deem fit.
18. The Bank may, at its own discretion, deposit all or any of the securities
given or which may be given as security for the Amount of the Guarantee or
any part thereof with a bailee chosen by the Bank, at our expense, and
substitute such bailee with another, from time to time. The Bank may at our
expense register all or any of the securities with any competent authority
in accordance with any law and/or in any public register.
NOTICES
19. We hereby undertake to notify the Bank immediately:
(a) of any claim of right to any collateral security given to the Bank as
security for the Amount of the Guarantee and/or of any execution or
injunction proceedings or other proceedings taken to attach, realise or
preserve any such security;
(b) of any material reduction in the scope of our business or the extent of
our property;
(c) of any material reduction in value of any security given by us;
(d) of any change of our name or address;
(e) of any application for bankruptcy, receivership or for winding up our
affairs which is filed against or by us as well as the adoption by us
of a resolution for voluntary winding up and/or merger and/or demerger.
20. Any notice or demand sent to us by the Bank by registered or ordinary mail
despatched from within Israel to the address appearing herein or to any
other address notified by us to the branch of the Bank first above written
by registered mail, shall be deemed to have been received by us within 72
hours from the time the letter containing the notice was sent. A written
declaration by the Bank shall serve as prima facie evidence as to the time
of its despatch. Any notice given to us by any other method shall be deemed
to have been received by us at the time it is given or made public.
INTERPRETATION
21. In this Deed of Guarantee: (a) The singular includes the plural and vice
versa; (b) The masculine gender includes the feminine gender and vice
versa; (c) "The Bank" means "Bank Hapoalim B.M." and every one of the
Bank's branches existing on the date hereof and/or which may be opened
henceforth at any place in the future, and any transferee or successor or
substitute of the Bank; (d) "Bills" means promissory notes, bills of
exchange, cheques, undertakings, guarantees, collaterals, assignments,
bills of lading, deposit notes and any other negotiable instruments; (e)
"The Customer" means the Customer, his heirs, the executors of his will,
the administrators of his estate and all of his substitutes and successors;
(f) The headings are only indicative and are not to be used in construing
this Deed of Guarantee; (g) The recitals hereto form an integral part
hereof.
<PAGE> 7
7
EXPENSES
22. (a) Without derogating from the rights of the Bank as set forth in this
Deed of Guarantee, all the expenses and charges in connection with
this Deed of Guarantee, as specified in the Bank's scale of charges at
the time and from time to time, shall be paid by us upon the Bank's
first demand, coupled with interest at the maximum rate, from the date
of the demand and until their actual payment in full.
(b) Without derogating from the generality of the foregoing, the aforesaid
expenses, and charges include collection charges, charges for stamp
duty on and registration of documents, expenses for the institution of
proceedings for the collection of the amounts due and/or becoming due
from us pursuant hereto (including the Bank's lawyers' fees),
insurance, safe custody, holding and repair of charged property and/or
of our other property which the Bank or any person acting on its
behalf may deal with the realisation thereof.
GOVERNING LAW AND PLACE OF JURISDICTION
23. In any matter pertaining to this Deed of Guarantee, to the relations
between ourselves and the Bank pursuant to or in connection herewith, and
to any litigation pertaining to this Deed of Guarantee, the exclusive place
of jurisdiction shall be as follows:
The competent court of law in the State of Israel nearest to the location
of the Branch of the Bank first above written or in one of the following
cities: Jerusalem, Tel-Aviv/Jaffa, Haifa, Beersheba or Nazareth.
The laws of the State of Israel shall apply to this Deed of Guarantee, to
the relations between ourselves and the Bank pursuant to and/or in
connection with this Deed of Guarantee and to any litigation pertaining to
this Deed of Guarantee.
NATURE OF THE GUARANTEE
24. WE HEREBY DECLARE THAT THE NATURE OF THIS DEED OF GUARANTEE HAS BEEN
EXPLAINED TO US BY THE BANK AND WE AGREE TO SIGN AND EXECUTE SAME AND TO BE
BOUND BY ALL OF THE OBLIGATIONS HEREIN SET FORTH.
AND IN WITNESS WHEREOF WE HAVE SIGNED AT NEW YORK, NEW YORK, UNITED STATES OF
AMERICA.
THE GUARANTOR:
<TABLE>
<CAPTION>
Percentage Share of Identity No. Name, Address, Area Signature of
the Guarantor* Corporation Reg. No. Code & Tel. No. of Guarantor
---------------------- Guarantor ------------
Account No. and Branch -------------------
of Bank**
Guarantor's Occupation,
Place of Employment
and Address
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
52-001395-4 TEVA
PHARMACEUTICAL /s/ Dan Suesskind
INDUSTRIES LTD. September 14, 1999
</TABLE>
