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EXHIBIT 2.1
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STOCK PURCHASE
AGREEMENT
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THIS STOCK PURCHASE AGREEMENT ("Agreement") is made June 27, 1997 among
XXXXXX INTERNATIONAL INC., an Ohio corporation with its principal place of
business in Cincinnati, Ohio, U.S.A. or a wholly owned subsidiary thereof
("Xxxxxx"), BIO-MEDICAL RESEARCH HOLDINGS B.V., UTRECHTSE
PARTICIPATIEMAATSCHAPPIJ B.V., X.X. XXXXXXXX, X.X. XXXXXXX, I.M. HOEPELMAN, Ph.
X. XXXXXXXX, X. XXXXXXXXX, X. XXXXXXXXX-ARSKA and L.G.W. STERKMAN (collectively,
the "Sellers").
R E C I T A L S:
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A. Sellers own all of the issued and paid up capital stock of U-GENE
RESEARCH B.V., a Netherlands corporation with its registered office in Utrecht
("U-Gene").
X. Xxxxxx desires to purchase from Sellers, and Sellers desire to sell
and assign to Xxxxxx, all of their shares of U-Gene capital stock.
THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties agree as follows:
ARTICLE 1
SALE AND PURCHASE OF THE U-GENE SHARES
1.1 Shares Being Sold and Assigned.
Subject to the terms and conditions of this Agreement, at the
Closing each of the Sellers shall sell and assign, at the price and on the terms
set forth herein, all of its, his or her shares of U-Gene capital stock to
Xxxxxx'x subsidiary, Xxxxxx U.K. Inc. The ownership of the shares is set forth
on Schedule 1.2.
At the Closing, Xxxxxx shall accept this sale and assignment of shares
of U-Gene capital stock. The transfer of the U-Gene Shares shall be effected by
execution at Closing of the notarial deed of transfer of which an agreed draft
is attached hereto and Schedule 1.1 and the acknowledgment of such transfer by
U-Gene as provided thereon.
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1.2 Consideration.
In full payment for the shares of U-Gene capital stock
("U-Gene Shares") to be sold and assigned to Xxxxxx under Article 1.1, Xxxxxx
shall deliver, or cause to be delivered, a purchase price of NLG 30,000,000 (the
"Purchase Price"). Of the Purchase Price, NLG 27,000,000 (the "Cash Component")
shall be paid to the Sellers in immediately available funds at Closing. The
remaining NLG 3,000,000 of the Purchase Price shall be deposited by Xxxxxx at
Closing in the form of a Promissory Note in the amount of NLG 3,000,000 in an
escrow account established at Xxxxxxx, Muething & Xxxxxxx, P.L.L. (the "Escrow
Agent"), to be held and disbursed by the Escrow Agent in accordance with the
terms of the Escrow Agreement (the "Escrow Agreement"). The form of the
Promissory Note and Escrow Agreement are attached hereto and incorporated herein
as Exhibit A. The Purchase Price shall be allocated among the Sellers as set
forth on Schedule 1.2.
1.3 Closing.
(a) The transfer and assignment of the U-Gene Shares
("Closing") shall occur on the date of the signing of
this Agreement. Upon Closing, Xxxxxx shall pay the
Cash Component to the Sellers in accordance with
Article 1.2 and shall deposit the NLG 3,000,000
Promissory Note with the Escrow Agent pursuant to the
Escrow Agreement and the Sellers shall transfer the
U-Gene Shares to Xxxxxx in accordance with Article
1.1.
(b) Each party shall bear the costs and expenses of its
own legal, tax and other advisers. Without limiting
the generality of the foregoing, all fees and
expenses charged or chargeable by Technomark
Consulting Services Ltd. relating to the sale of
U-Gene and the U-Gene Subsidiaries shall be borne and
paid solely by Sellers (and not by U-Gene).
(c) Sellers shall use their best endeavors to obtain or
to assist Xxxxxx in obtaining all necessary approvals
or consents to transfer of licenses, permits or
qualifications of governmental authorities and all
required consents of any other relevant third
parties, both in and outside the Netherlands (if
any).
ARTICLE 2
WARRANTIES AND REPRESENTATIONS OF SELLERS
2.1 Warranties and Representations with Respect to the U-Gene
Shares and the Sellers
As an inducement to Xxxxxx and recognizing Xxxxxx'x reliance
thereupon, the Sellers, severally and not jointly and in proportion to the
purchase price actually received by each Seller in accordance with Article 1.2,
warrant and represent to Xxxxxx with respect to the U-Gene Shares that:
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(a) each Seller has and will have full power and
authority to enter into and perform this Agreement,
which constitutes a binding obligation on it, him or
her in accordance with its terms;
(b) there is no lien, encumbrance or security interest
("Security Interests") on, over or affecting the
U-Gene Shares being sold and assigned by such Seller
to Xxxxxx hereunder and there is no agreement or
arrangement to give or create any such Security
Interest; and
(c) each Seller is entitled to transfer the full legal
and beneficial ownership of the U-Gene Shares owned
by such Seller to Xxxxxx on the terms of this
Agreement without the consent of any third party.
2.2 Warranties and Representations With Respect to U-Gene and the
U-Gene Subsidiaries
As an inducement to Xxxxxx and recognizing Xxxxxx'x reliance
thereupon, the Sellers, severally and not jointly, warrant and represent to
Xxxxxx with respect to U-Gene and the U-Gene Subsidiaries (as defined in Article
2.2(aa)) (U-Gene and the U-Gene Subsidiaries collectively, the "U-Gene
Companies") that:
(a) U-Gene is a corporation duly organized and validly
existing under the laws of the Netherlands. U-Gene
has full corporate power and authority to own its
assets and to carry on its contract research
organization business specifically including all
Phase I activities, whether conducted through
U-Gene's Clinical Research Unit or otherwise ("CRO
Business"), as now being conducted. U-Gene is duly
qualified or licensed to do business as a foreign
corporation in each jurisdiction in which the present
conduct of its CRO Business requires such
qualification or licensing.
(b) The authorized capital shares of U-Gene consist of
One Thousand (1,000) registered shares of NLG 1,000
(One Thousand) nominal value per share, of which Two
Hundred Ninety-Nine (299) shares are issued and paid
up and constitute the U-Gene Shares. The U-Gene
Shares have been duly authorized and are validly
issued, fully paid up and non-assessable. The U-Gene
Shares constitute the whole of the issued and paid up
share capital of U-Gene. No person other than the
Sellers has any contractual, statutory or other right
to acquire shares of capital stock of U-Gene or
securities or other instruments exchangeable for or
convertible into such shares of capital stock. None
of the U-Gene Shares was issued in violation of any
law, regulation or ordinance pertaining to the
issuance of securities or of any preemptive rights
under U-Gene's statutes or under any contract binding
upon U-Gene or any of the Sellers. U-Gene does not
own, and has no contractual or other right
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or obligation to acquire, any equity securities or
other securities of any other corporation, limited
partnership, joint venture or other entity other than
the U-Gene Subsidiaries or any direct or indirect
equity or other ownership interest in any other
business other than the businesses conducted by the
U- Gene Subsidiaries. When received by Xxxxxx, the
U-Gene Shares will be received free and clear of any
and all liens, pledges, encumbrances, charges or
other liens of any kind and no share transfer tax
will be due or payable by Xxxxxx.
(c) Each of the U-Gene Subsidiaries is a corporation duly
organized and validly existing under the laws of the
Netherlands. Each of the U-Gene Subsidiaries has full
corporate power and authority to own its respective
assets and to carry on its respective CRO Business as
now being conducted. Each of the U-Gene Subsidiaries
is duly qualified or licensed to do business as a
foreign corporation in each jurisdiction in which the
present conduct of its respective CRO Business
requires such qualification or licensing.
(d) The authorized equity securities of UCR (as defined
in Article 2.2(aa))consist of Two Hundred (200)
registered shares of NLG One Thousand (1,000) nominal
value per share, of which Forty (40) shares are
issued and paid up and all of which are owned
beneficially and of record by U-Gene. All of said
shares of UCR capital stock ("UCR Shares") have been
duly authorized and are validly issued, fully paid up
and non-assessable. None of the UCR Shares was issued
in violation of any law, regulation or ordinance
pertaining to the issuance of securities or of any
preemptive rights under UCR's statutes or under any
contract binding upon UCR or U-Gene or any of the
Sellers. No person or entity other than U-Gene has
any contractual, statutory or other right to acquire
shares of UCR capital stock or securities or other
instruments exchangeable or convertible into shares
of UCR capital stock.
(e) The authorized equity securities of URB (as defined
in Article 2.2(aa)) consist of Two Hundred (200)
registered shares of NLG One Thousand (1,000) nominal
value per share, of which Forty (40) shares are
issued and paid up and all of which are owned
beneficially and of record by U-Gene. All of said
shares of URB capital stock ("URB Shares") have been
duly authorized and are validly issued, fully paid up
and non-assessable. None of the URB Shares was issued
in violation of any law, regulation or ordinance
pertaining to the issuance of securities or of any
preemptive rights under URB's statutes or under any
contract binding upon URB or U-Gene or any of the
Sellers. No person or entity other than U-Gene has
any contractual, statutory or other right to acquire
shares of URB capital stock or securities or other
instruments exchangeable or convertible into shares
of URB capital stock.
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(f) The copies of the statutes of the U-Gene Companies as
currently in effect, previously delivered to Xxxxxx,
are complete and correct. Each of the U- Gene
Companies has properly registered with the Trade
Register in the district in which it has its
corporate seat and has made all necessary filings
with such Trade Register.
(g) Sellers have delivered to Xxxxxx audited consolidated
balance sheets of U- Gene as at December 31 in each
of years 1994, 1995 and 1996 and the related
consolidated statements of income, changes in
stockholders' equity and cash flow for each of the
fiscal years then ended, together with the report
thereon of Xxxxx Xxxxx & Xxxxx Accountants,
independent certified public accountants; and an
unaudited consolidated balance sheet of U-Gene as at
March 31, 1997 and the related unaudited consolidated
statements of income, changes in stockholders' equity
and cash flow for the three (3) months then ended,
including in each case the notes thereto
(collectively, the "U-Gene Financial Statements").
The U-Gene Financial Statements fairly present in all
material respects the consolidated financial
condition and consolidated results of operations,
changes in stockholders' equity and cash flow of U-
Gene and the U-Gene Subsidiaries as at the respective
dates of and for the periods referred to in such
U-Gene Financial Statements, all in accordance with
accounting principles generally accepted in the
Netherlands and in compliance with the financial
reporting requirements included in Part 9, Book 2 of
the Netherlands Civil Code.
Seller has also delivered to Xxxxxx true, complete
and correct copies of all management letters from
U-Gene's independent certified public accountants
with respect to years 1994, 1995 and 1996 and of all
written responses of U- Gene's management to such
letters.
(h) Except as set forth in Schedule 2.2(h), none of the
U-Gene Companies has any liabilities or obligations
of any nature (whether known or unknown and whether
absolute, accrued, inchoate, contingent or otherwise)
except for liabilities reflected or reserved against
in the U-Gene Financial Statements and current
liabilities incurred since March 31, 1997 in the
Ordinary Course of Business consistent with past
custom and practice (including with respect to
quantity and frequency) ("Ordinary Course of
Business"). Without limiting the generality of the
foregoing, except for liabilities reflected or
reserved against in the U-Gene Financial Statements
or as incurred in the Ordinary Course of Business,
none of the U-Gene Companies has any liability or
obligation for or with respect to any law, regulation
or ordinance relating to the environment or to worker
or public safety or health.
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(i) All accounts receivable of the U-Gene Companies that
are reflected on the U-Gene Financial Statements or
on the accounting records of the U-Gene Companies as
of the Closing (collectively, the "Accounts
Receivable") represent or will represent valid
obligations arising from sales actually made or
services actually performed in the ordinary course of
the U-Gene Companies' CRO Business. Unless paid prior
to the Closing, the Accounts Receivable are or will
be as of the Closing current and collectible net of
the reserves on the U-Gene Financial Statements and
reserves established in the Ordinary Course of
Business between the date of the most recent U-Gene
Financial Statements and the Closing. Subject to such
reserves, each of the Accounts Receivable either has
been or will be collected in full, without any
set-off, within ninety (90) days after the day on
which it first becomes due and payable. There is no
contest, claim or right of set-off under any
contracts or arrangement with any obligor of an
Account Receivable relating to the amount or validity
of such Accounts Receivable. Schedule 2.2(i) contains
a complete and accurate list of all Accounts
Receivable as of March 31, 1997, which list sets
forth the aging of such Accounts Receivable.
(j) The work in progress line items reflected on the
U-Gene Financial Statements or on the accounting
records of the U-Gene Companies as of the Closing
accurately allocate or will accurately allocate
income and costs, at historical cost, to bona fide
projects conducted for unaffiliated parties for the
periods to which the U-Gene Financial Statements or
the accounting records pertain and make adequate
provision for any expected losses on such projects.
(k) Schedule 2.2(k) contains a complete and accurate list
of all leasehold and other interests in real property
owned by the U-Gene Companies. Sellers have delivered
or made available to Xxxxxx true, complete and
correct copies of all leases or other instruments by
which the U-Gene Companies acquired such interests in
real property (collectively, the "Real Property
Leases"). None of the U-Gene Companies has received
any notice of default with respect to, and is not in
default under, any of the Real Property Leases. The
facilities leased by the U-Gene Companies pursuant to
the Real Property Leases comply with all applicable
zoning, land use, health and safety laws and are
adequate for the conduct of the U-Gene Companies' CRO
Business as currently conducted and as planned to be
conducted.
(l) Each of the U-Gene Companies has good and marketable
title to the assets, tangible or intangible, real,
personal or mixed, utilized in its respective CRO
Business, free and clear of all liens, pledges,
encumbrances, charges, easements, restrictions or
rights or other interests of any kind, except as set
forth on Schedule 2.2(l).
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All equipment and inventory used for or in the
conduct of the U-Gene Companies' CRO Business are
either owned by U-Gene or the U-Gene Subsidiaries or
can be used according to valid agreements to which
U-Gene or a U-Gene Subsidiary is a party. The
tangible personal property of the U-Gene Companies
is, as of the signing of this Agreement, in working
condition and adequate and suitable for the U-Gene
Companies' CRO Business, except for ordinary wear and
tear, and will be maintained under U-Gene's regular
maintenance policy until Closing.
(m) U-Gene has filed or caused to be filed on a timely
basis all income, property and other tax returns that
are or were required to be filed by U-Gene or the
U-Gene Subsidiaries, either separately or as a member
of a group of corporations, pursuant to applicable
legal requirements. U-Gene has paid, or has made
provision for the payment of, all taxes of any
nature, including income, property and other taxes,
that have or may have become due pursuant to those
tax returns or otherwise, or pursuant to any
assessment received by the Sellers or the U-Gene
Companies excepting only such taxes, if any, listed
on Schedule 2.2(m), as are being contested in good
faith and as to which adequate reserves (determined
in accordance with Netherlands generally accepted
accounting principles) have been provided on the
U-Gene Financial Statements. Schedule 2.2(m) also
sets forth a complete and accurate list of all tax
audits since 1991, including all ongoing tax audits,
of or relating to the U-Gene Companies, including a
reasonably detailed description of the nature and
outcome of each audit. All deficiencies proposed as a
result of any such audit have been paid, reserved
against or settled. There is no tax sharing agreement
that will require any payment by the U-Gene Companies
after the date of this Agreement.
(n) The U-Gene Companies have duly withheld or collected,
and to the extent required, paid to the proper
governmental authority or other person all taxes,
including all VAT and social insurance taxes, that
the U-Gene Companies are legally required to
withhold, collect and pay.
(o) U-Gene has paid, or has made provision for the
payment of, all social insurance, pension, deferred
compensation and other employee benefit payments
required to be made by the U-Gene Companies with
respect to their employees and agents. The
consummation of the transactions contemplated by this
Agreement will not result in the payment, vesting or
acceleration of any benefit available to the
employees of the U-Gene Companies under any plan of
social insurance or pension or other employee benefit
plan or under any employment contracts or other
arrangements.
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(p) The conduct and operation of the U-Gene Companies'
CRO Business have been and are in conformity with all
applicable laws and regulations (including, without
limitation, laws and regulations relating to the
environment or to public or worker safety or health),
and none of the U-Gene Companies or any of their
respective employees has received any notice
asserting or suggesting any failure, or potential
failure, to comply with or conform to any such laws
or regulations. The U-Gene Companies or their
respective employees possess all licenses, permits
and qualifications ("Permits") required for the
conduct of the U-Gene Companies' CRO Business as
currently conducted and as planned to be conducted.
All such Permits are valid and in full force and
effect and neither the U-Gene Companies nor any of
their respective employees has received any notice of
any cancellation, suspension, revocation or
non-renewal of any such Permit.
(q) Excepting only as set forth on Schedule 2.2(q), to
the best knowledge, after due inquiry, of the members
of the management team of U-Gene, none of the U-Gene
Companies have entered into any enforceable
contracts, agreements or other arrangements or
otherwise committed to make any capital expenditures,
including (without limitation) capital expenditures
to construct or expand facilities for the conduct of
the U-Gene Companies' CRO Business. For purposes of
this Agreement, "the members of the management team
of U-Gene" means X. X. Xxxxxxx, X. X. Xxxxxxxx,
L.G.W. Sterkman and Xxxxx Xxxxxxx.
(r) To the best knowledge, after due inquiry, of the
members of the management team of U-Gene, none of the
U-Gene Companies is in violation of or has breached
any licensing agreement with respect to patents,
trademarks, copyrights or other intellectual
property. To the best knowledge, after due inquiry,
of the members of the management team of U-Gene, all
of the patents, trademarks, copyrights and other
intellectual property used by the U-Gene Companies
in the conduct of their respective CRO Business are
either owned by the U-Gene Companies or can be used
according to valid licensing agreements to which the
U-Gene Companies are party. To the best knowledge,
after due inquiry, of the members of the management
team of U-Gene, none of the patents, trademarks,
copyrights or other intellectual property utilized by
the U-Gene Companies in the conduct of their CRO
Business infringes on the intellectual property
rights of any third party;
(s) Other than the Real Property Leases, each contract,
agreement, commitment or understanding to which
U-Gene or a U-Gene Subsidiary is a party that is: (i)
material to U-Gene's or that U-Gene Subsidiary's CRO
Business; or (ii) involves the payment by, or to,
U-Gene or either U-Gene Subsidiary of more than NLG
50,000 in any twelve (12) month period; or (iii) was
entered into
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with any of the Sellers or any affiliate of any of
the Sellers; or (iv) was entered into other than in
the ordinary course of U-Gene's or that U-Gene
Subsidiary's CRO Business, is listed on Schedule
2.2(s) (collectively, the "Material Contracts");
PROVIDED, HOWEVER, with respect to contracts entered
into with customers, only a standard contract form is
listed on Schedule 2.2(s), and Sellers represent that
such contract form is the standard form customers
enter into. None of the U-Gene Companies has received
notice of default with respect to and none of the
U-Gene Companies is in default under any of the
Material Contracts, including all customer contracts.
(t) To the best knowledge, after due inquiry, of the
members of the management team of U-Gene, none of the
U-Gene Companies has entered into any agreements,
undertakings or commitments which would in any
material way prevent or restrict its CRO Business in
continuing or further developing its business
currently conducted in the Netherlands or any other
country where any of the U-Gene Companies has
conducted its CRO Business during the last two (2)
years or would legally prevent or restrict its
ability to compete with other companies.
(u) Unless otherwise listed in Schedule 2.2(u), no law
suits with a value of NLG 50,000 or more,
administrative proceedings or investigations against
any of the U-Gene Companies or the U-Gene Companies'
CRO Businesses has been initiated, notified, or to
the best knowledge of Sellers threatened to, any of
the U-Gene Companies or the U-Gene Companies' CRO
Businesses, nor are any material circumstances known
to the board of management of U-Gene that would make
the initiation of any such law suits, administrative
proceedings or investigations appear likely to occur.
(v) Since December 31, 1996, to the best knowledge, after
due inquiry, of the members of the management team of
U-Gene, there has not been any material adverse
change in the business, operations, properties,
prospects, assets or condition, financial or
otherwise, of the U-Gene Companies, taken as a whole,
and no event has occurred or circumstance exists that
may result in such a material adverse change.
(w) None of the information concerning the U-Gene
Companies or their CRO Business or the Sellers that
U-Gene or the Sellers will supply Xxxxxx for use in
the registration statement (a copy of such
information is attached as Schedule 2.2 (w)) Xxxxxx
intends to file with the U.S. Securities and Exchange
Commission will contain any untrue statement of a
material fact or omit to state a material fact
necessary in order to make the statements made
therein, in light of the circumstances under which
they will be made, not misleading.
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(x) Schedule 2.2(x) contains a complete and accurate list
of the following information for each employee or
director of U-Gene or the U-Gene Subsidiaries,
including each employee on leave of absence or layoff
status: name; job title; professional qualifications;
Permits held; current compensation paid or payable
and any change in compensation since January 1, 1996;
vacation accrued; service credited for purposes of
eligibility and vesting under any social insurance or
employee benefit plan or under any employment
contracts or other arrangements and the employment
contracts for members of management.
(y) No representation or warranty of Sellers in this
Agreement and no statement in any Schedule or Exhibit
hereto omits to state a material fact necessary to
make the statements herein or therein, in light of
the circumstances in which they were made, not
misleading. None of the Sellers knows of any
information which is, or which may reasonably be
regarded as, material to an accurate appraisal of the
CRO Business, assets, liabilities and affairs of the
U-Gene Companies and which has not been disclosed to
Xxxxxx.
(z) Neither Xxxxxx nor any of the U-Gene Companies shall
have any liability to Collaborative Clinical
Research, Inc. ("CCR") or other party claiming by or
through CCR for or with respect to a claim that the
transactions contemplated by this Agreement violate
or require a payment to be made to CCR pursuant to
the terms of any agreement or understanding between
CCR and any of the U-Gene Companies or any of the
Sellers.
(aa) The transaction contemplated by this Agreement
requires no governmental approvals or consents to
transfer of licenses, permits or qualifications from
any country in which U-Gene or its subsidiaries,
U-Gene Clinical Research B.V. ("UCR") and U-Gene
Research Biotechnology B.V. ("URB") (collectively,
the "U-Gene Subsidiaries"), is active or markets its
products and services, including the Netherlands, the
United Kingdom, Italy, Germany, the Czech Republic
and Israel.
(bb) To the best knowledge, after due inquiry, of the
members of the management team of U-Gene and review
of at least five of the largest customer contracts,
there are no contracts, leases or other agreements
that contain a change of control provision except as
set forth on Schedule 2.2(bb).
(cc) Schedule 2.2(cc) contains a complete and accurate
list of all customer contracts in excess of NLG
1,500,000.
2.3 Breach of Warranty or Representation Reduces Purchase Price
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The amount of any successful claim against the Sellers under
this Agreement for breach of warranty or representation shall be deemed to
constitute a reduction in the Purchase Price with each Purchaser being liable in
proportion to the Purchase Price such Purchaser actually received.
2.4 No Warranties and Representations Other than as Contained in
Agreement
No representations or warranties, express or implied,
statutory or otherwise, made by the Sellers or their professional advisers on
their behalf to Xxxxxx in connection with, or arising out of, the acquisition of
the U-Gene Shares and which are not contained in this Agreement, shall give rise
to any liability on the part of the Sellers and Xxxxxx acknowledges that it has
not entered into this Agreement in reliance upon any representation or promise
other than those in this Agreement.
ARTICLE 3
WARRANTIES AND REPRESENTATIONS OF XXXXXX
3.1 Warranties and Representations of Xxxxxx
As an inducement to the Sellers and recognizing the Sellers'
reliance thereupon, Xxxxxx warrants and represents to the Sellers that:
(a) Xxxxxx is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Ohio, U.S.A. Xxxxxx has full power and
authority to own its assets and to carry on its
contract research organization business as now being
conducted. Xxxxxx is duly qualified or licensed to do
business as a foreign corporation in all
jurisdictions in which the present conduct of its
business requires such qualification or licensing.
(b) The copy of the Articles of Incorporation and
Regulations of Xxxxxx as currently in effect,
previously delivered to the Sellers, is complete and
correct.
(c) The execution, delivery and performance of this
Agreement by Xxxxxx has been authorized by all
necessary corporate action. This Agreement
constitutes the legal, valid and binding obligation
of Xxxxxx, enforceable against Xxxxxx in accordance
with its terms. Xxxxxx has the absolute and
unrestricted right, power, authority and capacity to
execute and deliver this Agreement and the other
documents to be delivered by Xxxxxx hereunder and to
perform its obligations under this Agreement and such
other documents.
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(d) No representation or warranty of Xxxxxx in this
Agreement and no statement in any Schedule or Exhibit
hereto omits to state a material fact necessary to
make the statements herein or therein, in light of
the circumstances in which they were made, not
misleading.
3.2 No Warranties and Representations Other than as Contained in
Agreement
No representations or warranties, express or implied,
statutory or otherwise, made by Xxxxxx or its professional advisers on its
behalf to the Sellers in connection with, or arising out of, the acquisition of
the U-Gene Shares and which are not contained in this Agreement, shall give rise
to any liability on the part of Xxxxxx and the Sellers acknowledge that they
have not entered into this Agreement in reliance upon any representation or
promises other than those in this Agreement.
ARTICLE 4
OPERATION OF U-GENE'S CRO BUSINESS PENDING THE CLOSING
Except as set forth on Schedule 4, from April 15, 1997 through
the Closing Date Sellers have caused U-Gene to operate the U-Gene Companies' CRO
Business strictly in the Ordinary Course of Business and as previously
conducted, have caused U-Gene to use its best efforts to keep available to
Xxxxxx the services of U-Gene's and the U-Gene Subsidiaries' present key
employees and have caused the U-Gene Companies to preserve for Xxxxxx the
goodwill of the U-Gene Companies' suppliers, clients and others having business
relations with the U-Gene Companies. Sellers did not cause U-Gene and the U-Gene
Subsidiaries to do any of the following without written disclosure to Xxxxxx.
(a) made any changes in employee compensation, bonuses or
benefits, other than customary annual adjustments;
(b) created, assumed, incurred, paid or discharged any
claim, lien, encumbrance or liability other than in
the ordinary course of business;
(c) purchased, sold, assigned, leased, exchanged or
otherwise disposed of assets other than in the
ordinary course of business;
(d) entered into, renewed, extended, modified,
terminated, waived any right under or incurring any
additional liability under any Material Contract
(other than in the Ordinary Course of Business);
(e) except for dividends with respect to 1996 in amounts
not to exceed NLG 264,755, declared or paid any
dividends or other distributions to Sellers or
purchased or redeemed any of its shares of capital
stock;
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(f) made any investment in or loan to Sellers or any of
their affiliates or any third party;
(g) made any expenditure for, or incurred any obligations
in respect of fixed assets, fixtures and other
capital items (except those expenditures and
obligations (and in the accounts) listed on Schedule
2.2(q));
(h) entered in to any consulting agreement;
(i) entered into licensing or purchase or sale agreements
with respect to any inventions, know-how or other
intellectual property.
ARTICLE 5
SELLERS' OBLIGATION TO XXXXXX AT CLOSING
5.1 Opinion of Counsel to the Sellers
At Closing, Xxxxxx'x bank shall have received the legal
opinion of counsel to the Sellers in the form customarily given in this type of
transaction.
5.2 Termination of Consulting or Other Agreements With Supervisory
Board Members
As of the Closing Date, the U-Gene Companies shall have
terminated, without cost to any of the U-Gene Companies, each of the consulting
or other agreements with supervisory board members of the U-Gene Companies,
except for (i) the agreement with Prof. xx X. Xxxxxxx and (ii) those contracts
and agreements listed on Schedule 5.2.
ARTICLE 6
INDEMNIFICATION AND OTHER REMEDIES
6.1 Survival of Representations and Warranties
The representations and warranties of each party contained
herein shall be true as of the Closing Date (except for representations and
warranties that are made as of a specific date [which shall have been true as of
such date])and shall survive until December 31, 1998; provided that in respect
of the representations regarding taxes in Articles 2.2(m), 2.2(n) and 2.2(o) the
expiry date shall not be until 6 months after the period for assessments or
audits by the respective governmental authority has expired.
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The aforementioned expiry dates are deadlines within which the
party making a claim must have sent a written notification of the claims
explaining the grounds herefor in reasonable detail.
6.2 Notice of claims
Upon discovery of any misrepresentation contained in any of
the Articles of this Agreement, Xxxxxx shall give Sellers written notice of such
claims and a statement in reasonable detail of the reasons therefor, provided,
however, that failure to notify Sellers shall not release Sellers from their
obligations under this Agreement with respect to such misrepresentation, but
Xxxxxx shall be fully responsible for any damages to Sellers caused by any such
failure to so notify Sellers as required above.
6.3 Indemnities
(a) By the Sellers
Sellers agree, severally and not jointly and in
proportion to the purchase price received by each
Seller in accordance with Article 1.2, to indemnify
and hold Xxxxxx harmless from and against any and all
claims, demands, losses, costs, expenses,
obligations, liabilities, actions, suits, damages,
including without limitation, interest and penalties,
counsel fees (all such claims, demands, losses,
costs, expenses, etc., being referred to herein
collectively as "Claims") and all amounts paid in
settlement of any such Claims which may be asserted
against Xxxxxx or which Xxxxxx shall incur or suffer,
and which arise out of or result from the breach of
any representation, warranty or agreement of Sellers
contained herein or from any claim for compensation
or for reimbursement of expenses made by Technomark
Consulting Services Ltd. relating to the transactions
contemplated by this Agreement or from any claim for
damages, compensation or reimbursement of expenses,
including under any theory, in contract or in tort,
asserted by CCR or any party claiming by or through
CCR. In determining the quantum of damages under this
Article, appropriate adjustments shall be made for
tax benefits.
Any compensation in relation to breach of warranties shall be
settled as instructed by Xxxxxx. Xxxxxx shall ensure that the
U-Gene Companies do not acknowledge any liability or reach a
settlement with respect to a fact or circumstance which may
lead or has led to a breach of a warranty without Sellers'
prior written consent.
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(b) By Xxxxxx
Xxxxxx agrees to indemnify and hold Sellers (and each
of them) harmless from and against any and all
claims, demands, losses, costs, expenses,
obligations, liabilities, actions, suits, damages,
including without limitation, interest and penalties,
counsel fees (all such claims, demands, losses,
costs, expenses, etc., being referred to herein
collectively as "Claims") and all amounts paid in
settlement of any such Claims, which may be asserted
against Sellers or which Sellers shall incur or
suffer, and which arise out of or result from the
breach of any representation, warranty or agreement
of Xxxxxx contained herein, or from the operation of
U-Gene or the U-Gene Subsidiaries after Closing.
(c) Defense of All Claims
Promptly after receipt of notice of the commencement
of any action, or the assertion by any third party of
any Claim with respect to which Xxxxxx or Sellers are
entitled to indemnification, the party receiving the
notice shall promptly notify the other party in
writing of the commencement of such action or the
assertion of such Claims, provided however, that
failure to so notify shall not relieve the
indemnifying party of its obligation to indemnify but
shall make the other party fully responsible for any
damages caused by any such failure to the
indemnifying party. The indemnifying party, at its
option, may elect to take charge of and control the
defense of any Claim, provided that the indemnifying
party shall agree to pursue the defense of such Claim
in good faith by appropriate actions or proceedings
promptly taken or instituted and diligently pursued
and has acknowledged liability under Article 6.3 in
writing. The indemnifying party has to give
reasonable consideration to the legitimate business
interest of the other party and their business. If
the indemnifying party elects to assume the defense
of any such action in accordance with the second
preceding sentence, the indemnified party shall be
nevertheless entitled to participate (at its own
expense) in said defense. In all cases, the parties
shall at all times reasonably cooperate with each
other in the defense of a Claim and shall make their
respective personnel and relevant records reasonably
available to the other for purposes of defense of a
Claim.
6.4 Liability Limitation
In no event, shall any party be responsible under this
Agreement to any other for indirect and consequential damage except with respect
to breaches or violations of Article 9 hereof.
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No party hereto shall have an obligation towards the others
under a warranty or related statutory claim unless and until the aggregate
amount of such claims against such party exceeds NLG 450,000, or the equivalent
in any other currency, and if so, then the entire amount in excess of NLG
450,000 shall be payable to the other party.
The total aggregate liability of the Sellers, on the one hand,
or of Xxxxxx, on the other, in respect of any matter arising in connection with
this Agreement shall not exceed an amount of NLG 22,500,000.
Xxxxxx has no right to invoke a breach of a warranty or a
related statutory claim (a "Breach") in the event:
(a) the fact, the circumstance or the event which was the
cause of the Breach is contained or referred to in
reasonable detail in this Agreement or in the
Schedule attached to this Agreement;
(b) the Breach would not have occurred without an
amendment in the legislation, regulations or in case
law which occurred after the date of this Agreement;
(c) the Breach is a result of a change after Closing in
the accounting principles and methods, applied by the
U-Gene Companies;
(d) the Breach would not have occurred without an act or
a failure to act by Xxxxxx or the U-Gene Companies
after Closing, or by a person whose act or failure to
act after Closing may be attributed to Xxxxxx or the
U-Gene Companies.
6.5 Escrow
To secure Seller's obligations under this Article 6, the
Promissory Note shall be held under the Escrow Agreement and Xxxxxx shall first
apply its claims to the Promissory Note before seeking recourse against the
Sellers.
ARTICLE 7
INDEMNIFICATION OF XXXXXX
FOR CLAIM BY CCR
Under Article 2.2(z) Sellers made certain representations and
warranties with respect to CCR. As an inducement to Xxxxxx and recognizing
Xxxxxx'x reliance thereupon, Sellers agree, severally and not jointly and in
proportion to their respective ownership of the U-Gene Shares as follows:
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(a) Sellers agree, severally and not jointly and in
proportion to the purchase price received by each
Seller in accordance with Article 1.2, to indemnify
and hold Xxxxxx, U-Xxxx and the U-Gene Subsidiaries
harmless from and against any and all claims,
demands, losses, costs, expenses, obligations,
liabilities, actions, suits, damages, including
without limitation, interest and penalties, counsel
fees (all such claims, demands, losses, costs,
expenses, etc., being referred to herein collectively
as "Claims") and all amounts paid in settlement of
any such Claims which may be asserted against Xxxxxx,
U-Gene or the U-Gene Subsidiaries or which Xxxxxx,
U-Gene or the U-Gene Subsidiaries shall incur or
suffer, and which arise out of or result from the
breach of any representation, warranty or agreement
of Sellers contained herein or from any claim for
damages, compensation or reimbursement of expenses,
including under any theory, in contract or in tort,
asserted by CCR or any party claiming by or through
CCR as a result of the termination of U-Gene's
Agreement with CCR. In determining the quantum of
damages under this Article, appropriate adjustments
shall be made for tax benefits.
Xxxxxx shall ensure that the U-Gene Companies do not acknowledge any
liability or reach a settlement with respect to a fact or circumstance which may
lead or has led to a breach of a warranty without Sellers' prior written
consent.
(b) Defense of All Claims
Promptly after receipt of notice of the commencement
of any action, or the assertion by any third party of
any Claim with respect to which Xxxxxx is entitled to
indemnification, Xxxxxx shall promptly notify the
Sellers in writing of the commencement of such action
or the assertion of such Claims, provided however,
that failure to so notify shall not relieve the
Sellers of their obligation to indemnify. Sellers at
their option, may elect to take charge of and control
the defense of any Claim, provided that Sellers shall
agree to pursue the defense of such Claim in good
faith by appropriate actions or proceedings promptly
taken or instituted and diligently pursued and has
acknowledged liability under Article 8A in writing.
Sellers have to give reasonable consideration to the
legitimate business interest of Xxxxxx and their
business. If Sellers elect to assume the defense of
any such action in accordance with the second
preceding sentence, Xxxxxx shall be nevertheless
entitled to participate (at its own expense) in said
defense. In all cases, the parties shall at all times
reasonably cooperating with each other in the defense
of a Claim and shall make their respective personnel
and relevant records reasonably available to the
other for purposes of defense of a Claim.
(c) Liability Limitation
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Xxxxxx and Sellers agree that Sellers shall have full
liability with respect to this CCR indemnity and this
CCR indemnity shall not be limited by Section 6.4 and
shall be in addition to any right Xxxxxx may have
under Article 6.
(d) Bank Guaranty
The Seller shall deliver to Xxxxxx a bank guaranty,
in the form attached hereto and incorporated herein
as Exhibit C, in the amount of NLG 1,000,000 to
secure Sellers' obligation under this indemnity. The
bank guaranty shall remain effective until June 30,
1998.
(e) Survival of Representations.
The representation and warranty under Article 2.2(z)
shall survive the Closing and shall not expire.
ARTICLE 8
INSURANCE
Sellers warrant that certain insurable risks of U-Gene or the U-Gene
Subsidiaries are covered as of the date hereof through Closing by insurance
policies, as shown on Schedule 8. Any payments received from insurance companies
by Sellers after the Closing in respect of insured risks of U-Gene or the U-Gene
Subsidiaries shall be passed on to U-Gene.
ARTICLE 9
NON-COMPETE UNDERTAKING
Until December 31, 1999, Sellers, and Prof. xx. X. Xxxxxxx (since he is
a shareholder of Bio-Medical Research Holdings B.V.) shall neither directly nor
indirectly be engaged, interested or concerned (whether as shareholder or
director) in any business that competes with U-Gene or the U-Gene Subsidiaries
in the Netherlands, Germany, Belgium, France, Italy, the United Kingdom, the
Czech Republic or Israel in the field of clinical contract research for the
pharmaceutical industry. Until December 31, 1999, Sellers and Prof. xx. X.
Xxxxxxx shall not solicit any employees or clients of U-Gene or the U-Gene
Subsidiaries without the prior written consent of Xxxxxx. Notwithstanding the
foregoing: (i) drs I.M. Hoepelman, Ph.X. Xxxxxxxx M.D., X.X. Xxxxxxxxx M.D., xx
X. Xxxxxxxxx and Prof. xx. X. Xxxxxxx are professors and medical doctors at
University Hospitals and therefore they are permitted to continue all activities
that are in the ordinary course of their duties (consistent with their
activities prior to the date of this Agreement), which includes participation in
clinical research projects for the pharmaceutical industry, (ii) Sellers and
Prof. xx. X. Xxxxxxx are
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permitted to invest in publicly traded contract research organizations provided
such investment is as a passive investor and does not amount to more than Five
Percent (5%) of the stock of such public traded contract research organization
and (iii) the non-compete provisions of this Article 9 shall only apply to X. X.
Xxxxxxx until December 31, 1997. Sellers agree to cause Xxxxx Xxxxxxx to sign
and deliver at Closing an agreement containing non-compete undertakings similar
to the undertakings under this Article 10 which shall apply until December 31,
1998, a copy of which is attached as Article 9. The provisions of this Article 9
shall not modify or change any employment agreement or other contract currently
in effect between any Seller and U-Gene and the U-Gene Subsidiaries.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 Further Assurances
Each party agrees to make its best effort to cause the
conditions herein set forth to be satisfied at or prior to Closing. Each of the
parties agree to execute and deliver any and all further agreements, documents
or instruments necessary to effectuate this Agreement and the transactions
referred to herein or contemplated hereby or reasonably requested by the other
party to perfect or evidence their rights hereunder. Each party further agrees
to make all reasonable efforts to cooperate with the other in post-Closing
matters that may arise in regard to taxes and the like and to provide U-Gene
with the benefits of all contracts or permits which may be affected by the
change of control of U-Gene.
Sellers shall use its best efforts to assist and to cause
U-Gene's independent auditors to assist (and render the audit opinion on the
financial statements described below) Xxxxxx in preparation of such audited
financial statements for U-Gene as are necessary to enable Xxxxxx to comply with
the reporting requirements promulgated under the Securities and Exchange Act of
1934, as amended, in the United States. Xxxxxx shall be responsible and pay for
all reasonable fees to U-Gene's independent auditors for such assistance;
provided, however, that to the extent that U-Gene's independent auditors
efforts in respect of the above financial statements are also applicable to the
preparation and certification of U-Gene's regular year end financial statements,
such efforts shall be for the account of and shall be paid by Sellers.
10.2 Notices
All notices made pursuant to this Agreement shall be valid
only if made by a person authorized to receive notices as per below by Xxxxxx or
the Sellers, as the case may be, and sent by registered mail, return receipt
requested or facsimile, to the parties at the addresses set forth below, or as
set forth in any notice of change of address given in writing in the manner
prescribed herein to all other parties.
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If to Xxxxxx: XXXXXX INTERNATIONAL INC.
000 Xxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Chief Financial Officer
with a required copy to: XXXXXXX, MUETHING & XXXXXXX, P.L.L.
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
If to Sellers: Bio-Medical Research Holdings B.V.
Attention: Prof. xx. X. Xxxxxxx
Aristoteleslaan 36
3707 EM Zeist
Utrechtse ParticipatieMaatschappij B.V.
Attention: Xx.X. Xxxxx
Galileilaan 35
3584 BC Utrecht
X.X. Xxxxxxxx, Pharm. D.
Xxxxxxxxxxxxxx 000
0000 XX Xxxxxxx
Drs. X.X. Xxxxxxx
Xx Xxxxxxxxx 0
0000 XX Bilthoven
Dr. I.M. Hoepelman
Xxxxx Xxxxxxxxxxx 00
0000 XX Xxxxxxx
Mr. Ph.X. Xxxxxxxx, M.D.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
XXX
Xx. X.X. Xxxxxxxxx, M.D.
000 Xxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
XXX
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Xx. X. Xxxxxxxxx-Arska
Sweelincklaan 41
3723 JB Bitlthoven
L.G.W. Sterkman, M.D.
Griffensteynselaan 77
3703 AD Zeist
10.3 Choice of Law
This Agreement shall be governed by and construed in
accordance with the substantive laws of the Netherlands.
10.4 Assignment
This Agreement may not be assigned by any party without the
prior written consent of the other party; PROVIDED, however, that Xxxxxx may
assign its rights hereunder to a wholly owned subsidiary (it being understood
that Xxxxxx shall, notwithstanding such assignment, remain fully liable to
Sellers with respect to the performance of its obligations hereunder) and may
also collaterally assign its rights hereunder to its bank lenders.
10.5 Waiver
No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or be construed as a further or continuing waiver of any such
term, provision or condition or as a waiver of any other terms, provisions or
conditions of this Agreement.
10.6 Severability
The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction or any other provision herein. Any invalid
or unenforceable provision shall be replaced by such reasonable provision as
comes closest to what the parties wanted or would have wanted to apply in
accordance with the meaning and purpose of this Agreement if they had considered
such invalidity or unenforceability when entering into this transaction. This
shall also apply to the identification of an obligation in terms of amount or
time (period or date). The parties further agree that they will lay down in
writing and in a proper form the rule applicable pursuant to the foregoing
sentences by formally amending this Agreement.
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10.7 Announcements
Xxxxxx and Sellers shall cooperate in the preparation of any
announcements regarding the transaction contemplated by this Agreement. Except
as required by applicable law (in which case such announcing party shall prior
thereto advise the other party), no party shall issue any announcement regarding
the transactions contemplated hereby without the prior consent of the other,
which consent shall not be unreasonably withheld.
10.8 Entire Agreement
This Agreement (including all attachments) constitutes the
entire understanding between the parties with respect to the subject matter
hereof, supersede all negotiations, prior discussions and preliminary
agreements. Neither party gives any warranty or accepts any liability in
addition to those expressly stated in this Agreement. This Agreement may not be
changed except by written instrument executed by all parties. The headings of
this Agreement are not a part of this Agreement but are for convenience purposes
only.
10.9 Jurisdiction; Venue
The parties hereto irrevocably submit and consent exclusively
to the jurisdiction of the courts in Utrecht, Netherlands with respect to any
proceeding instituted by any party to this Agreement to enforce or to interpret
the provisions of this Agreement. The parties hereto further irrevocably agree
that venue in any of such courts shall be proper and covenant that they shall
not object to such venue or seek to transfer venue by motion for forum
inconveniens or otherwise.
(remainder of page intentionally blank)
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IN WITNESS WHEREOF, the undersigned have hereunto set their respective
hands effective as of the date and year first above written.
XXXXXX INTERNATIONAL INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: V.P. - CFO
BIO-MEDICAL RESEARCH HOLDINGS B.V.
By: /s/ Prof. Xx. X. Xxxxxxx
--------------------------------------
Name: Prof. Xx. X. Xxxxxxx
Title: Director
UTRECHTSE PARTICIPATIEMAATSCHAPPIJ B.V.
By: /s/ H.N.V. Middendorp
--------------------------------------
Name: H.N.V. Middendorp
Title: Director
/s/ X. X. Xxxxxxxx
------------------------------------------
X.X. XXXXXXXX
/s/ X. X. Xxxxxxx
------------------------------------------
X.X. XXXXXXX
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/S/ I. M. Hoepelman
------------------------------------------
I.M. HOEPELMAN
/S/ Ph. X. Xxxxxxxx
------------------------------------------
Ph.X. XXXXXXXX
/S/ X. Xxxxxxxxx
------------------------------------------
X. XXXXXXXXX
/S/ X. Xxxxxxxxx-Arska
------------------------------------------
X. XXXXXXXXX-ARSKA
/S/ L. G. W. Sterkman
------------------------------------------
L.G.W. STERKMAN
