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Exhibit 10.4
DATED SEPTEMBER 27, 1995
NDA CLINICAL TRIAL SERVICES INC. AND OTHERS
and
UNILABS CLINICAL TRIALS LIMITED
and
UNIHOLDING CORP
-------------------------------
UCT OPTION AGREEMENT
-------------------------------
Xxxxxxx Xxxxxxxxx Chart
---------SOLICITORS------------
00-00 Xxxx Xxxxxx, Xxxxxx X0X 0XX
Telephone: 0000-000 0000, 0000-000 0000 Fax: 0000-000 0000
DX 00000 Xxxx Xxxxxx
Ref:26191
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CONTENTS
CLAUSES
1. Definitions & Interpretation
2. Grant of Option
3. Exercise of Option
4. Completion
5. Warranties
6. Company's Obligations
7. UniHolding's Obligations
8. Transfer of Option Shares & Allotment
9. General
10. Confidentiality
11. Assignment
12. Announcements
13. Time of the Essence
14. Whole Agreement & Variation
15. Waiver
16. No Partnership or Agency
17. Notice
18. Counterparts
19. Governing Law
20. First Optionholder's and Second Optionholders' Representations
SCHEDULES
1. Optionholders
2. Information Concerning the Company
3. Particulars of UniHolding
4. Calculation of Option Shares and Option Price
5. Warranties
6. Warranty Limitations
7. Exercise Notice
8. List of Contractual Commitments
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ANNEXURES
1. Company's Articles of Association
2. Deed of Adherence
3. Sample calculations relating to Schedule 4
4. Opinion to be given by the Company's legal advisors pursuant to
clause 6.2(a) of this Agreement
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THIS AGREEMENT is made the ______________ day of _______________ 1995
BETWEEN:
1. NDA CLINICAL TRIAL SERVICES INC. a Delaware corporation having its
principal place of business at 000 Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxx
00000, Xxxxxx Xxxxxx of America ("the First Optionholder")
2. THOSE PERSONS, PARTNERSHIPS OR CORPORATIONS whose details are set out
in Schedule 1 (together "the Second Optionholders")
3. UNILABS CLINICAL TRIALS LIMITED a company incorporated in England and Wales
(Registered No 2626808) whose registered office is at Bewlay House, 00
Xxxxxxxxx Xxxx, Xxxxxx, Xxxxxx XX0 0XX Xxxxxxx ("the Company")
4. UNIHOLDING CORP a Delaware corporation having its principal place of
business at 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx of
America ("UniHolding").
WHEREAS:
(A) The First Optionholder and UniHolding have entered into a stock purchase
agreement dated September 27, 1995 ("the Stock Purchase Agreement")
providing for the purchase by UniHolding of certain common stock in the
capital of the First Optionholder and have entered into an option agreement
("the NDA Option Agreement") of the same date providing UniHolding with an
option to purchase certain additional common stock in the capital of the
First Optionholder;
(B) It is a condition precedent to the completion of the Stock Purchase
Agreement and the NDA Option Agreement that the Company simultaneously sign
this Agreement in favour of the Optionholders;
(C) The Company has agreed to grant the Options upon the terms and subject to
the conditions of this Agreement to the Optionholders.
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NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, the Recitals, the Schedules and the Annexures
hereto unless the context requires otherwise:
"ACCOUNTS" means the Annual Accounts for the year ended 31 May 1997;
"ACCOUNTS DATE" means 31 May;
"ANNUAL ACCOUNTS" means the audited (and consolidated if applicable)
balance sheet and profit and loss account and cash flow statement of
the Company in relation to each financial year of the Company as at
the Accounts Date and the directors' report and notes annexed thereto
prepared in accordance with UK generally accepted accounting
principles;
"ARTICLES" means the Articles of Association of the Company at the
date hereof attached hereto as Annexure 1;
"BALANCE SHEETS" means the audited balance sheet of the Company as at
31 May 1994 and the unaudited balance sheet of the Company as at 31
May 1995;
"BUSINESS DAY" means a day other than a Saturday, Sunday or public
holiday on which banks in England are open for business;
"COMPLETION" means the completion of one of the Options pursuant to
Clause 4;
"COMPLETION DATE" means, in relation to the Exercise, the first
Business Day next falling after the expiry of 30 days from the
Exercise Date;
"DEED OF ADHERENCE" means the deed of adherence in the form set out in
Annexure 2;
"DIRECTORS" mean the directors of the Company;
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"EXERCISE" means the exercise of an Option by the First Optionholder
or the Second Optionholders (as the case may be);
"EXERCISE DATE" means the date upon which either the First
Optionholder or the Second Optionholders issue an Exercise Notice in
respect of the Exercise;
"THE EXERCISED OPTION SHARES" means the Option Shares in relation to
which an Option has been exercised;
"EXERCISE NOTICE" means a notice substantially in the form of Schedule
7;
"FIRST DISCLOSURE LETTER" means the Disclosure Letter to be delivered
to the Optionholders at the date of this Agreement;
"FIRST EXERCISE PERIOD" means the period commencing on the date on
which the Company shall deliver to all of the Optionholders the
Accounts and ending on the First Termination Date;
"THE FIRST OPTION" means the Option granted by the Company to the
First Optionholder in clause 2.1;
"THE FIRST OPTION SHARES" means the number of Ordinary Shares in the
Company calculated in accordance with paragraph 1(a) of Schedule 4;
"THE FIRST TERMINATION DATE" means 17.00 hours (London time) on the
day falling 30 days after the commencement of the First Option Period;
"GROUP MEMBER" means, in relation to the Company, the Company, any
other body corporate which is its holding company or subsidiary and
any other body corporate which is a subsidiary of that holding company
as defined in Section 53 Companies Xxx 0000, or in relation to Clause
7.2, any shareholder thereof or family member of a shareholder or
person or entity associated therewith;
"INTELLECTUAL PROPERTY" means patents, trade marks, service marks,
design
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rights (whether registerable or otherwise) applications for any of the
foregoing, copyright, know how, confidential information, trade or
business names and other similar rights or obligations whether
registrable or not in any country (including but not limited to the
United Kingdom);
"AN OPTION" means the First Option or the Second Option (as the case
may be);
"THE OPTIONS" means the First Option and the Second Option;
"OPTION PRICE" means the sum calculated in accordance with Schedule 4
payable by either the First Optionholder or the Second Optionholders
in respect of each Option Share;
"OPTION SHARE" means a share in the capital of the Company which is
subject to an Option;
"THE OPTIONHOLDERS" means the First Optionholder and the Second
Optionholders;
"QUARTERLY ACCOUNTS" means an unaudited quarterly balance sheet,
profit and loss account and cash flow statement (consolidated if
applicable) for the Company prepared in accordance with UK generally
accepted accounting principles and certified by the Company's
financial director such balance sheet to be as of the end of such
financial quarter and such profit and loss account and cash flow
statement to be for such financial quarter and for the period from the
beginning of the financial year to the end of such financial quarter,
in each case with comparative statements for the corresponding period
in the previous financial year;
"SECOND DISCLOSURE LETTER" means the disclosure letter to be delivered
to either the First Optionholder or the Second Optionholders no later
than 10 Business Days after receipt by the Company of the Exercise
Notice;
"THE SECOND OPTION" means the Option granted by the Company to the
Second Optionholders in clause 2.2;
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"THE SECOND EXERCISE PERIOD" means the period commencing on the day
after the First Termination Date and ending on the Second Termination
Date;
"THE SECOND TERMINATION DATE" means 17.00 hours (London time) on the
day falling 30 days after the commencement of the Second Exercise
Period;
"SHARES" means all of the issued ordinary shares in the Company for
the time being;
"THE SECOND OPTION SHARES" means the number of Ordinary shares in the
capital of the Company calculated in accordance with paragraph 1(b) of
Schedule 4;
"STOCK EXCHANGE" means The International Stock Exchange of the United
Kingdom and the Republic of Northern Ireland Limited;
"SUBSIDIARY" means any subsidiary of the Company (if any) as defined
under Section 736 Companies Act 1985 (as amended);
"TOTAL OPTION PRICE" means the Option Price multiplied by the Option
Shares;
"WARRANTIES" has the meaning attributed thereto in Clause 5.1 and 5.2
and set out in Schedule 5;
1.2 References to persons include bodies corporate.
1.3 References to Clauses, Schedules and Annexures are references to Clauses,
Schedules and Annexures to this Agreement.
1.4 The Schedules hereto form part of and are incorporated in this Agreement.
1.5 Headings are included for ease of reference only and shall not affect the
interpretation of this Agreement.
2. GRANT OF OPTION
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2.1 Subject to Clause 2.3, in consideration of the sum of 1.00 pound sterling
(receipt of which the Company hereby acknowledges) the Company hereby
grants to the First Optionholder an option exercisable by the First
Optionholder at any time during the First Exercise Period to subscribe
for the whole of the First Option Shares at the Option Price in
accordance with the terms of this Agreement.
2.2 Subject to clause 2.3 and clause 18 (second sentence), in consideration of
the sum of 1.00 pound sterling (receipt of which the Company hereby
acknowledges) the Company hereby grants to the Second Optionholders an
option exercisable by the Second Optionholders at any time during the
Second Exercise Period to subscribe for the Second Option Shares at the
Option Price in accordance with the terms of this Agreement if the First
Optionholder shall not have exercised the First Option. For the avoidance
of doubt the Second Optionholders shall have no right to subscribe for
any Option Shares in the event of the First Optionholder exercising the
First Option.
2.3 The Exercise of either Option by either the First Optionholder or the
Second Optionholders shall be subject to the following conditions having
been fulfilled in each case prior to the Exercise Date:
(a) the sale and allotment of the Shares under and as defined in the Stock
Purchase Agreement in accordance with the terms therein; and
(b) UniHolding exercising its option under the NDA Option Agreement in
accordance with the terms therein.
3. EXERCISE OF OPTION
3.1 Subject to the provisions of clause 2.3 the First Optionholder may at any
time during the First Exercise Period exercise the First Option by
delivering an Exercise Notice in respect of all the Option Shares to the
Company at its registered office for the time being detailing the Option
Price, such Option Price being calculated in accordance with Schedule 4.
3.2 Subject to the provisions of clauses 2.2, 2.3 and 3.3 the Second
Optionholders may at any time during the Second Exercise Period exercise
the Second Option by delivering an Exercise Notice in respect of all or any
of the Option Shares to the Company at its registered office for the time
being detailing the number of Option
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Shares in relation to which the Second Option is being exercised and the
Option Price, such number of Option Shares and such Option Price being
calculated in accordance with Schedule 4.
3.3 The following provisions shall apply in relation to any exercise of the
Second Option:
(a) The Second Option shall be exercisable by the Second Optionholders,
pro-rata to their respective holdings of issued Class A Voting Common
Stock in the First Optionholder at the Exercise Date as follows (such
method of calculation is hereafter referred to as "Pro Rata"): Should
any Second Optionholder wish to exercise its Pro Rata portion of the
Second Option (hereinafter, a "Participant") the Participant shall
give notice to the other Second Optionholders and Xxxxx X Xxxxxxxx Esq
of Xxxxxxx Xxxxx Xxxxxxxxx Xxxx Xxxxxxxxx & Sazer PC of this intention
("the Participant's Notice") not later than 10 days after the rights
of the Second Optionholders shall have arisen under Clause 2.2. In
such notice the Participant shall advise that it is willing to
exercise its Pro Rata portion of the Second Option and that it has the
means to do so.
(b) If any Second Optionholder has not sent in a Participant's Notice
within the 10 day period referred to in Clause 3.3 (a), his right
shall be apportioned to the other Participants who have agreed to
purchase their own Pro Rata portion and wish to participate in such
further apportionment. Such further apportionment shall be in
proportion to each such other Participant's percentage interest in the
First Optionholder as compared to the percentage of all such other
Participants. If not all the Option Shares have been taken up by this
apportionment, successive apportionments shall be effected until the
earlier of (i) a commitment to take up all of the Option Shares is
achieved or (ii) one day prior to the Second Termination Date. Prior
to the Second Termination Date, the Participants shall then coordinate
the dispatch of the Exercise Notice to the Company.
(c) If on or prior to the Second Termination Date the Company has received
an Exercise Notice by some or all the Participants to purchase not
less than the minimum number of Option Shares which each Participant
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intends to purchase under Clause 3.3 (a) the Company shall issue the
Exercised Option Shares to each Participant and effect Completion
under Clause 4 below in accordance with the Pro Rata proportion of
Option Shares to which he is entitled.
3.4 Subject to Clause 6.2 any Exercise Notice shall be irrevocable.
4. COMPLETION
4.1 Subject to the terms and conditions of this Agreement and the prior receipt
in full by the Company of the Total Option Price in cleared sterling funds
as provided for in this Agreement to such bank account as the Company shall
notify to the First Optionholder or Second Optionholders as the case may be
as soon as practicable following receipt of the Exercise Notice the
Exercise shall be completed on the Completion Date at 10.00 am (London
time) at the registered office of the Company when the Company shall issue
and allot to the First Optionholder or the Second Optionholders (as the
case may be) the Exercised Option Shares and deliver to the First
Optionholder or the Second Optionholders the share certificate(s) in
respect thereof and register the First Optionholder or the Second
Optionholders (as the case may be) as the holder(s) of the Exercised Option
Shares.
4.2 All the Option Shares allotted pursuant to this Agreement shall be sold
free of all liens, charges, equities and encumbrances.
4.3 The Exercise of an Option pursuant to Clause 3 shall be deemed to have been
effected immediately prior to the close of business (London time) on the
Completion Date and at such time the First Optionholder or the Second
Optionholders (as the case may be) shall be deemed to have become the
registered holder of the Exercised Option Shares to be allotted hereunder
with all rights attaching thereto including the right to all dividends and
distributions declared in relation to such Exercised Option Shares.
4.4 The delivery of share certificates pursuant to Clause 4.1 shall be made
without charge to the First Optionholder or Second Optionholders for any
tax chargeable on the allotment of shares (if any) in respect thereto,
provided that the Company shall not be required to pay any tax which may
be chargeable in respect of any
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transfer involved in the issue and delivery of any share certificate in a
name other than that of the First Optionholder or Second Optionholders.
5. WARRANTIES
5.1 With the intent that the Optionholders shall enter into this Agreement at
the date hereof the Company warrants as at the date hereof in the terms of
the Warranties.
5.2 Subject to Clause 5.4 with the intent that the First Optionholder or the
Second Optionholders shall Exercise one of the Options on the Exercise
Date the Company warrants as at the Exercise Date in respect of the period
from the date of this Agreement to the Completion Date in the terms of the
Warranties which warranties shall be deemed to be repeated immediately
prior to the Completion Date.
5.3 Subject to Clause 5.4 the Company hereby acknowledges that the
Optionholders are entering into this Agreement in reliance on the
Warranties as given as at the date of this Agreement and that the First
Optionholder or the Second Optionholders will Exercise one of the Options
in reliance on the Warranties as given for the period from the Exercise
Date to the Completion Date in accordance with the terms of this
Agreement.
5.4 Each of the Warranties given as at the date of this Agreement are given
subject to matters disclosed in this Agreement and the First Disclosure
letter and each of the Warranties as given for the period from the
Exercise Date to the Completion Date are given subject to matters
disclosed in this Agreement and the Second Disclosure letter. The First
Disclosure Letter and the Second Disclosure Letter shall be delivered to
either the First Optionholder or the Second Optionholders. The Second
Disclosure Letter may be updated by the Company at any time up to and
including the Completion Date.
5.5 The Optionholders shall not be entitled to make any claim under or
pursuant to the Warranties to the extent such claims are excluded by
Schedule 6.
6. COMPANY'S OBLIGATIONS
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6.1 If at any time prior to the Termination Date:
(a) the Company shall declare any discretionary scrip dividend upon its
Shares or make any special dividend or other distribution;
(b) the Company shall offer for subscription pro rata to the holders of
its Shares any additional securities of any class or other rights;
(c) there shall be any capital reorganisation or reclassification of the
Company's share capital, or consolidation or merger of the Company
with, or sale of all or substantially all its assets or share capital
to any other company;
(d) there shall be a voluntary or involuntary arrangement, liquidation or
winding-up of the Company; or
(e) the Company shall enter into an agreement or adopt a plan for the
purpose of effecting a consolidation, merger or sale of all or
substantially all of its assets or share capital, other than a merger
where the Company is the surviving corporate entity and the terms of
the Company's share capital remain unchanged;
then, in any one or more of such cases, the Company shall give notice to
the Optionholders of the date on which (a) the books of the Company shall
close or a dividend or distribution shall be declared or subscription
rights offered or (b) such reorganisation, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up shall
take place, as the case may be. Such notice shall also specify the date
as of which the registered owners of any class of share in the capital of
the Company shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their share for
securities or other property deliverable upon such reorganisation,
reclassification, consolidation, merger, sale, dissolution, liquidation
or winding-up, as the case may be. Such written notice shall be given at
least 30 days prior to the action in question if practicable and not less
than 10 days prior to the declaration or offer date or the date on which
the Company's transfer books are closed in respect thereto if practicable.
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6.2 The Optionholders may give notice to the Company once prior to the
Exercise (save in relation to 6.2(a) below which opinion may be requested
twice) that the Company should deliver the information or documents
referred to in this Clause 6.2 as soon as reasonably practicable and that
the Company perform the actions below at the time specified. The Company
shall only be obliged to comply with the obligations in this Clause 6.2
when the First Optionholder or Second Optionholders entitled to 51% or
more of the Option Shares notify the Company of a request hereunder. If
the Company shall fail to comply with its obligations under this Clause
and such non-compliance is not waived by the Optionholders giving the
notice then the First Optionholder or Participants holding a majority
interest in the Option Shares may by notice require that the First and
Second Termination Dates and the Completion Date be extended until 10 days
after the earlier of such compliance or until the Managing Director of the
Company certifies that the Company has complied to the extent possible.
Any Participant may, notwithstanding its Exercise of the Second Option,
withdraw that part of the Exercise Notice relating to its part of the
Second Option without liability therefor if the Company fails to comply
with this Clause 6.2 or if the representations made in Clause 6.2 (b) are
not, in such Participant's reasonable opinion, adequate for such
Participant to complete the Exercise of the Second Option. The information
or documents as the case may be which may be the subject of a request
under this Clause are as follows:
(a) an opinion in the form attached as Annexure 4 as at the date
requested from the Company's solicitors certifying their opinion as
a condition of Completion that so far as they are aware based solely
on enquiry of the Company's directors the Company is duly
incorporated, the authorised and issued share capital of the Company
as at that time, brief details of the relevant resolutions that have
been passed in relation to the allotment hereunder and that the
Agreement has been validly executed;
(b) the Company shall have performed and complied with all the agreements
contained herein and required to be performed or complied with by it
prior to or at the Completion Date and the Managing Director of the
Company shall have certified to Optionholders in writing to such
effect provided that nothing herein contained shall be construed so
as to compel UniHolding to exercise its rights under the NDA Option
Agreement;
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(c) all corporate and other proceedings to be taken by the Company
hereunder and all documents incident thereto shall be in a form and
substance reasonably satisfactory to the Optionholders and the
Optionholders shall at their own expense have received all such
counterpart originals or certified or other copies of such documents
as they may reasonably request;
(d) (i) the Memorandum and Articles certified as of a recent date by the
Company's secretary together with confirmation by him of the
Company's due incorporation, good standing and the payment of
all due taxes;
(ii) a certificate of the said secretary dated as at the Completion
Date certifying that attached thereto is a true and complete
copy of the Company's Memorandum and Articles on the date of
such certification and that the Memorandum and Articles
attached thereto are in full force and effect and has not been
amended and that no notice has been received directly
attributable to the Exercise of any default, or occurrence or
omission which with notice or the passage of time or both would
result in an event of default under any material agreement to
which the Company is a party and as to the authority and
specimen signature of each officer of the Company executing the
share certificates relating to the Exercised Option Shares.
6.3 The Company shall provide within the time periods specified below:
(a) to the First and Second Optionholders within ninety (90) days after
each financial year end of the Company commencing 31 May 1995 the
Annual Accounts together with a certificate executed by the Company's
secretary stating that such officer has caused this Agreement to be
reviewed and has no knowledge of any default by the Company in the
performance or observance of any of the provisions of this Agreement
or, if such officer has such knowledge, specifying such default and
the nature thereof;
(b) for the relevant period following the date of this Agreement to the
First Optionholder within forty-five (45) days after the end of each
fiscal quarter
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in each fiscal year (other than the last quarter in each fiscal year)
the Quarterly Accounts;
(c) following the date of this Agreement to the First Optionholder as
soon as reasonably practicable upon sending, making available or
filing the same, all press releases, reports and financial statements
that the Company sends or makes available to its shareholders or
directors or filed with the Stock Exchange or any other international
stock exchange;
provided that in the event that the Second Optionholders shall Exercise
the Second Option pursuant to Clause 3.2 the Company shall deliver copies
of the information referred to at 6.3(b)-(c) above to them as soon as
reasonably practicable following receipt of the Exercise Notice.
In addition to the information to be provided under Clause 6.3(a)-(c) the
Company shall deliver to the First Optionholder as soon as reasonably
practicable such of the information referred to in Clause 6.2(e)-(g) as
the Company shall in its absolute discretion consider to materially affect
the Optionholders or any of them:
(e) after the commencement thereof, notice of all actions, claims,
proceedings, investigations and inquiries of the type described in
paragraph 6 of the Warranties that could materially adversely affect
the Company;
(f) from time to time, such other information regarding the business
prospects, financial condition, operations, property or affairs of
the Company as the First Optionholder may reasonably request; and
(g) all minutes and consents of the board of directors of the Company as
soon as reasonably practicable after a meeting has occurred or a
consent signed.
6.4 The Company further covenants with the Optionholders that for the period
from the Exercise to the Second Termination Date:
(a) it shall maintain during the First or Second Exercise Period (as the
case may be) sufficient unissued Shares to satisfy the Exercise of
either of the Options; and
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(b) notwithstanding the provisions of the Articles the Company shall
procure the waiver of all pre-emption provisions contained in the
Articles or elsewhere in respect of an allotment of the Exercised
Option Shares pursuant to the terms of this Agreement and the
registration of all allotments made in accordance with the terms
hereof.
6.5 The Company shall maintain and cause any Subsidiaries to maintain their
respective corporate existence and rights in full force and effect save
that the Company may dispose of or dissolve any Subsidiary where such
action shall in the reasonable opinion of the Company be in the Company's
best commercial interests. The Company shall as soon as it commences
trading maintain and cause each of its Subsidiaries to maintain as to
their respective properties and business, with reputable insurers,
insurance of the type and in such amounts as is usual for companies
carrying on businesses similar to the Company, including without
limitation employers liability, public liability, medical malpractice,
damage to property, personal injury or death and such other risks normally
insured against by other companies in the same or similar business, and
such other insurance as may be required by law.
6.6 Subject to the applicability of Clause 10 which is hereby acknowledged by
the First Optionholder and the Second Optionholders the Company shall
permit and cause any Subsidiaries to permit once only and in the period
prior to the Exercise one designated representative together with such
professional advisors as shall be reasonably required by and on behalf
of all the Optionholders (and not for the avoidance of doubt in respect of
each or any individual Optionholder) at their own expense to visit and
inspect any of the Company's properties and any Subsidiaries, examine
their books and take copies and extracts therefrom, discuss the affairs,
finances and accounts of the Company and its Subsidiaries with the
directors of the same at reasonable times and upon reasonable notice.
6.7 Neither the Company nor any Subsidiary shall become a party to any
agreement which by its terms restricts the Company's performance of this
Agreement or any other agreement to which it is a party referred to
herein.
6.8 Unless agreed otherwise between the parties hereto the Company shall not
pay to its management remuneration materially in excess of that
customarily paid to management in companies in businesses similar to the
Company provided that the
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Company shall not be in breach of this obligation where such remuneration
is being paid in the best commercial interests of the Company in the
reasonable opinion of the Directors at the Exercise Date and has been
disclosed to the Optionholders under the provisions of this Agreement.
In the event, notwithstanding the foregoing, that remuneration materially
in excess of that customarily paid to management in companies in
businesses similar to the Company shall be paid to a Group Member or to an
employee, officer or shareholder of a Group Member, then the Company will
make a commensurate adjustment to the Valuation Multiple as set forth in
paragraph 1 of Schedule 4 hereto.
6.9 The Company shall use its reasonable endeavours to comply and cause any
Subsidiary to comply with all applicable laws, rules, regulations and
orders, noncompliance with which could materially adversely affect its
business or condition, financial or otherwise.
6.10 The Company shall use its reasonable endeavours to keep, and cause any
Subsidiary to keep, adequate records and books of account, in which
complete entries will be made in accordance with UK generally accepted
accounting principles consistently applied, reflecting all material
financial transactions of the Company and any Subsidiary, and in which,
for each financial year, all proper reserves for depreciation,
obsolescence, amortisation, taxes, bad debts and other purposes in
connection with its business shall be made.
6.11 The Company shall pay its creditors and meet its obligations in
accordance with the standard terms of payment and pay and discharge on
the due date all taxes, assessments and governmental charges or levies
imposed upon it or its income or profits or in respect of its property,
before the same shall become in default, as well as all lawful claims
for labour and supplies or otherwise which, if unpaid, might become a
lien or charge upon such properties or any part thereof provided however,
that the Company shall not be required to pay and discharge or cause to
be paid and discharged any tax assessment charge, levy or claim so long
as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and the Company shall set aside on its book such
reserves as are required under UK generally accepted accounting
principles with respect to any such tax, assessment, charge, levy or
claim so contested.
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6.12 To the extent permitted by law or any rules of the Stock Exchange until
the Completion Date, the Company shall notify the Optionholders of the
following events as soon as reasonably practicable following the relevant
board approval of each such intended event:
(a) If the Company shall authorise or issue shares of any class or
series of equity securities convertible into any class or series
of equity securities.
(b) If the Company shall merge or consolidate into or with any other
company or sell all or substantially all of the Company's
assets, or sell pledge, license or otherwise dispose of assets
(tangible or intangible) of the Company for consideration of
more than 100,000 pounds sterling (other than licenses granted
or assets sold in the ordinary course of business).
(c) If the Company shall redeem, purchase or otherwise acquire any
shares of equity securities.
(d) If the Company shall pay or declare any dividend or
distribution, in cash, property or otherwise, on any shares in
the capital of the Company.
(e) If the Company shall voluntarily liquidate, dissolve or wind up
the Company or conduct any form of recapitalisation or
reorganisation of the Company.
(f) If other than in the ordinary course of its business the Company
shall incur any obligation involving payments or consideration of
more than 100,000 pounds sterling per year, except for short term
borrowings for working capital or borrowings to fund parts,
materials and labour costs to fill purchase orders.
(g) If the Company shall sell any equity or debt securities in any
Subsidiary of the Company to third parties.
(h) If the Company shall adopt any fundamental change to the Company's
business being changes which would result in more than 25% of the
Company's assets being deployed in, or gross revenues derived from,
businesses other than clinical laboratories or blood testing.
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(i) If other than in the ordinary course of its business the Company
shall acquire any capital asset for more than 100,000 pounds
sterling and or make any investment in or acquire another business
entity in each case for consideration in excess of 500,000 pounds
sterling.
(j) If the Company shall sell or transfer any intangible property valued
in the Company's books for sums in excess of 100,000 pounds sterling
other than licenses granted in the ordinary course of business.
7. UNIHOLDING'S OBLIGATIONS
7.1 (a) For so long as the Company remains a Subsidiary of UniHolding,
UniHolding warrants and undertakes that the Company shall be the
only entity performing centralised European or multi national
clinical trials testing of UniHolding or any Group Member.
(b) The parties hereto hereby acknowledge that UniHolding may continue to
perform testing for non-centralised clinical trials testing, but
only as currently performed by UniHolding or its Subsidiaries other
than the Company, being tests not performed using the NDA Software
or NDA Concept as defined in the Cooperation Agreement dated
1 March 1995 made between the First Optionholder and UniHolding
including (without limitation) services provided by the CT plus
trading division of JS Pathology PLC, a Group Member. UniHolding
hereby acknowledges its intention to direct all its clinical trials
testing to the Company.
7.2 (a) Subject to Clause 7.2(b), UniHolding shall use its reasonable
endeavours to procure that the Company shall only enter into any
legally binding contract or other obligation with any Group Member
at a price which is broadly competitive in relation to the goods or
services the subject of such contract or obligation as that
generally available in the UK market place.
(b) In the event that the Company shall enter into any legally binding
contract or other obligation with any Group Member at a price which
is not broadly competitive in relation to the goods or services the
subject of such contract or obligation as that generally available
in the UK market place (or to the extent the contract or obligation
is to be performed outside the UK then
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in that market place) or exercises any power of control
exercisable by it in relation to the transfer of monies from the
Company to any Group Member in relation to the purchase and supply of
goods and services other than on an arms length basis at UK market
value or on terms more favourable to that Group Member than would be
reasonable to expect if such company had not been a Group Member then
the Company will make a commensurate adjustment to the Valuation
Multiple as set forth in paragraph 1 of Schedule 4.
7.3 UniHolding shall use its reasonable endeavours to procure that the
director appointed by it to the board of directors of the First
Optionholder pursuant to the Stock Purchase Agreement shall vote in
accordance with the then majority of that board (not counting in relation
to the constitution of any such majority the director appointed by
UniHolding) in relation to the exercise of the First Optionholders's
Option rights under this Agreement.
7.4 UniHolding warrants and undertakes that in the event of a distribution in
specie of the Company's shares to the shareholders of UniHolding or listing
of any share capital of the Company on the Stock Exchange or any other
recognised stock exchange or in any event where UniHolding is no longer the
majority shareholder of the Company, UniHolding will not and shall procure
that no other Group Member shall compete with the Company to provide
centralised European or multi national clinical trials testing for a period
of seven years from the date UniHolding has ceased to be the majority
shareholder of the Company or the date of such distribution in specie or
public offering of the Company to the shareholders of UniHolding as the
case may be.
8. TRANSFER OF OPTION SHARES AND ALLOTMENT
8.1 The Directors shall have the right to refuse to register the transfer of
any Shares to any person who in the absolute discretion of the Company is
deemed to be a competitor of the Company. Following the Completion Date
save as provided in Clause 8.2 no Optionholder shall be entitled to
transfer any Exercised Option Shares by way of sale or otherwise except
in accordance with the provisions of this Clause 8 or with the consent of
UniHolding.
8.2 Any Optionholder being a corporate or partnership entity may transfer all
but not
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22
part only of its Exercised Option Shares in the Company to any partner or
shareholder of the partnership or corporate entity or to any other such
entity it controls, is controlled by or which is under common control
provided that if the transferee shall in less than a twelve month period
thereafter cease to be so associated (other than by means of a voluntary
solvent liquidation) then the transferring Optionholder shall procure that
the transferee forthwith transfers back to that Optionholder all of its
Exercised Option Shares. If such transfer is not made forthwith then,
without prejudice to any other rights and remedies hereunder, unless and
until such breach is rectified the Exercised Option Shares registered in
the name of the transferee which has ceased to be so associated as
aforesaid shall carry no rights whatsoever (whether under this Agreement,
the Articles or otherwise). If an Optionholder is an individual the same
provisions shall apply mutatis mutandis to any family member or corporate
entity or partnership controlled by the individual or relevant family
member of that Optionholder.
8.3 If any Optionholder desires to transfer its Exercised Option Shares
("the Transferor") to another person ("the Transferee") in accordance
with this Agreement then:
(a) in respect of any transfer made in accordance with Clause 8.2:
(i) the Transferor shall not be in any way relieved from any of its
obligations and liabilities under this Agreement and shall
procure that such the Transferee complies with all the
provisions of this Agreement as if it were party hereto; and
(ii) if there is a breach of this Agreement the Transferor will be
liable (without prejudice to the obligations of the Transferee
pursuant to the Deed of Adherence) as principal as if it
remained a party to the Agreement.
(b) on any transfer of Exercised Option Shares, the Transferor shall
procure that the Transferee enters into the Deed of Adherence with
the other Optionholder.
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8.4 (a) If at any time other than pursuant to Clause 8.2, the Transferor
desires to sell all or any part of his Exercised Option Shares to any
person ("the Proposed Transferee"), the Transferor shall submit a
written offer ("the Transfer Notice") to sell such Exercised Option
Shares ("the Offered Shares") to the Company and UniHolding and,
subject to the right of first refusal of UniHolding in Clause 8.4(b),
to all the Optionholders other than the Transferor ("the Other
Optionholders") on terms and conditions, including price, not less
favourable to such offerees than those on which the Transferor
proposes to sell such Offered Shares to the Proposed Transferee. The
Transfer Notice shall be delivered simultaneously to the Company,
UniHolding and the Other Optionholders and shall disclose the
identity of the Proposed Transferee, the number of Offered Shares
proposed to be sold, the total number of Exercised Option Shares
owned by the Transferor, and all other terms and conditions,
including price, material to be known by a purchaser for value in
relation the proposed sale. The Transfer Notice shall further be
deemed to state that UniHolding or the Other Optionholders may
acquire, in accordance with the provisions of this Agreement, all but
not less than all of the Offered Shares for the price and upon the
other terms and conditions, including deferred payment (if
applicable), set forth therein.
(b) Subject to the first sentence of sub-clause (d) below, UniHolding
shall have the first right to purchase all of the Offered Shares, and
if UniHolding does not elect to purchase the Offered Shares, the
Other Optionholders shall have the right to purchase all of the
Offered Shares offered by the Transferor in accordance with the terms
of this section. In the event that any of the Other Optionholders
notify the Transferor of its intent not to purchase the Offered
Shares or does not respond within the time period provided in this
Clause, it or they shall not be entitled to purchase any of the
Offered Shares. Each of the Other Optionholders shall each have the
right to purchase its Pro Rata Share (hereafter defined) of the
Offered Shares provided however, that in the case where one or more
of the Other Optionholders do not complete the purchase of its or
their Pro Rata Share of the Offered Shares, then such of the Other
Optionholders who wish to so purchase shall have the right to
purchase its or their Pro Rata Share of
20
24
the balance of the said Offered Shares and for this purpose, the
denominator of the fraction contained in the definition set forth
below of Pro Rata Share shall not include the holdings of any Other
Optionholder who does not purchase any of the Offered Shares. For
purposes of this Clause, "Pro Rata Share" shall mean the amount of
Offered Shares obtained by multiplying the total number of Offered
Shares times a fraction, the numerator of which shall be the number
of Shares then owned by the Other Optionholders entitled to purchase
the Offered Shares and the denominator of which shall be the
aggregate number of Shares then owned by all of the Other
Optionholders. For the purpose of this Clause, all of the Shares
which the Other Optionholders have the right to acquire from the
Company upon the conversion, exercise or exchange of any of the
securities of the Company then owned by the Other Optionholders shall
be deemed to be shares then owned by the Other Optionholders.
(c) Within 15 days after its receipt of the Transfer Notice, UniHolding
shall notify the Transferor by facsimile and, in any case, by
overnight express delivery in accordance with Clause 17 if it wishes
to purchase the Offered Shares. If UniHolding does not elect to
purchase the Offered Shares within such period, it shall promptly and
in no event later than two days after its decision not to accept the
Transfer Notice, notify the Transferor and the Other Optionholders as
to the availability of Offered Shares for purchase by the Other
Optionholders. The Other Optionholders shall, within 15 days of the
date of such notice, each notify the Transferor as to whether or not
they wish to buy the Offered Shares. Any failure on the part of
UniHolding or the Other Optionholders to provide a notice within the
respective periods set forth above shall be construed as a rejection
of the Transfer Notice by such party. Sales of the Offered Shares to
be sold to UniHolding or the Other Optionholders pursuant to this
Clause shall be completed at the offices of the Company on the
twenty-fifth day after the Transfer Notice was made if UniHolding
agrees to purchase the Offered Shares or on the fortieth day after
the date the Transfer Notice was submitted if the Other Optionholders
agree to purchase the Offered Shares, but if the said day is not a
Business Day, then on the next succeeding Business Day. Such sales
shall be effected by the Transferor's delivery to each purchaser of a
duly executed stock transfer form in respect of the Offered Shares
together with the share certificates in respect thereof
21
25
and the free and clear of all claims by others, against payment to
the Transferor of the purchase price therefor in cash, by bankers
draft or telegraphic transfer from such purchaser.
(d) If UniHolding or the other Optionholders do not purchase the Offered
Shares, the Offered Shares may be sold by the Transferor at any time
within 90 days after the date the Transfer Notice was made, subject
to the provisions of this Agreement, including but not limited to
this Clause. Any such sale shall be to the Proposed Transferee at not
less than the price specified in the Transfer Notice and upon other
terms and conditions, if any, not more favourable to the Proposed
Transferee than those specified in the Transfer Notice. Any Offered
Shares not sold within such 90-day period shall continue to be
subject to the requirements of this Clause and shall be offered to
UniHolding or the Other Optionholders as above prior to the sale to
any purchaser.
8.5 The Directors shall refuse to register any proposed transfer of Exercised
Option Shares other than a transfer made pursuant to or permitted by the
foregoing provisions of this Clause 8.
8.6 Subject to the Exercise of either of the Options and until any listing of
the Shares on the Stock Exchange or any other international stock exchange
UniHolding shall procure that no special resolution is passed by UniHolding
waiving any rights of pre-emption attaching to the Shares of the Company.
Any of the Optionholders shall be entitled to renounce any rights to
allotment of Shares in favour of any other Optionholder.
9. GENERAL
9.1 Neither of the Options shall entitle the owner thereof to any voting
rights or other rights as a shareholder of the Company or to any other
rights whatsoever save for the express rights herein, and no dividends
shall be payable or accrue in respect of either of the Options or the
owners rights herein or the Option Shares until or unless, and except to
the extent that, such Option shall be exercised. No provision hereof, in
the absence of positive action by the Optionholders to Exercise either of
the Options, nor setting out of the Optionholders rights or privileges
hereunder shall give rise to any liability on any Optionholder as a
22
26
shareholder of the Company whether such liability is asserted by the
Company or by its creditors.
9.2 In the event of any conflict between the terms of this Agreement and the
Articles the provisions of this Agreement shall prevail to the extent that
UniHolding shall if necessary in any case procure the amendment of the
Articles to the extent required to enable the Company and its affairs to
be administered as provided herein.
9.3 Each of the parties hereto shall pay its own costs incurred in the
preparation and implementation of this Agreement.
9.4 If an Optionholder dies prior to the Second Termination Date the Second
Option may be exercised after the date of his death at any time prior to
the Second Termination Date in accordance with the terms of this Agreement
and the parties hereto acknowledge that this Agreement shall be deemed to
bind the successors, heirs and personal representatives of the parties
hereto.
10. CONFIDENTIALITY
Save as shall be required by law or by the rules or regulations of the
Stock Exchange or any other international stock exchange the Optionholders
and any of them hereby undertake with the Company and UniHolding that they
will not without the prior written consent of UniHolding at any time
hereafter use, divulge or communicate to any third party other than their
respective professional advisors whose province it is to know the same,
any confidential information (other than information which may properly
come into the public domain through no fault of the Optionholders or any
of them) concerning the business, accounts, finance or contractual
arrangements or other dealings, transactions or affairs of the Company or
of UniHolding which may come to their knowledge as a result of entering
into this Agreement and they shall use their best endeavours to prevent
the publication or disclosure of any such confidential information
concerning such matters and on ceasing to be a shareholder of the Company
shall return all documents and copies of any such confidential information
that it has obtained to UniHolding.
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27
11. ASSIGNMENT
(a) Subject to Clause 11(b) this Agreement may be assigned by the
Optionholders to any other Optionholder, or any partner or shareholder of
such Optionholder where such Optionholder is a partnership or corporate
entity, in whole or in part prior to the Exercise Date without the prior
written consent of UniHolding but shall not otherwise be assigned.
UniHolding and the Company shall not be entitled to assign their rights
hereto except with the prior written consent of persons holding not less
than a majority in interest of the Options Shares.
(b) NDA and the Second Optionholders hereby warrant and undertake that in no
event shall the number of Second Optionholders exceed 49 which
restriction, warranty and undertaking is hereby acknowledged by NDA and
all the Second Optionholders and NDA and the Second Optionholders shall
fully indemnify and keep indemnified the Company for all costs, expenses
and liabilities whatsoever attributable to any breach of this clause 11(b).
12. ANNOUNCEMENTS
No announcement or circular in connection with the subject matter of this
Agreement shall be made by or on behalf of any party hereto without the
prior consent in writing of a majority in interest of the Optionholders and
the Company and UniHolding save that in the event that any party hereto is
required by law or by the rules or regulations of the Stock Exchange or
any other international stock exchange or by the Panel on Take-Overs and
Mergers to make any announcement or issue any circular any party hereto
may do so.
13. TIME OF THE ESSENCE
Time shall be of the essence as regards any date or period mentioned in
relation to the Exercise save only to the extent that any date or period
may be altered by mutual consent of a majority in interest of the
Optionholders and the Company and UniHolding whereupon time shall be of
the essence as regards such date or period as so altered.
14. WHOLE AGREEMENT & VARIATION
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This Agreement and any document referred to herein constitutes the whole
agreement between the parties hereto and no modification, variation or
amendment of this Agreement shall be effective unless such modification,
variation or amendment is in writing and has been signed by or on behalf
of a majority in interest of the Optionholders and the Company
and UniHolding.
15. WAIVER
No waiver of any breach or default under this Agreement or any of the
terms hereof shall be effective unless such waiver is in writing and has
been signed by the party or parties against which it is asserted. No
waiver of any such breach or default shall constitute a waiver of any
other or subsequent breach or default.
16. NO PARTNERSHIP OR AGENCY
Save as expressly provided herein nothing in this Agreement shall
constitute a partnership between the parties hereto or constitute any one
the agent of another and none of the parties shall do or suffer anything
to be done whereby it shall or may be represented that it is the partner
or agent of a party hereto (save as aforesaid) unless such party is
appointed partner or agent of that other party subject to the consent in
writing of that party to this Agreement.
17. NOTICE
17.1 Any notice, information, document or consent as the case may be required
or authorised to be given or delivered hereunder (hereinafter called
"Notice") shall be in writing and shall be served personally or sent by
pre-paid registered airmail letter or facsimile transmission addressed to
the address or facsimile number of the relevant party or parties as
specified below or to such other address or facsimile number as any one of
the parties may from time to time notify to the other parties hereto for
this purpose by Notice:
(a) if to the First Optionholder:
Address: 000 Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxx
00000, Xxxxxx Xxxxxx of America
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Facsimile number: (000) 000 0000
Attention: President
(b) if to the Second Optionholders:
Address: Meltzer, Lippe, Goldstein, Wolf,
Xxxxxxxxx & Sazer, P.C.
000 Xxxxxx Xxxxxx
Xxxxxxx
Xxx Xxxx
Xxx Xxxx 00000
United States of America
Facsimile number (000) 000 0000
Attention: Xxxxx X Xxxxxxxx Esq
(c) if to the Company:
Address: Bewlay House, 00 Xxxxxxxxx Xxxx, Xxxxxx,
Xxxxxx, Xxxxxxx XX0 0XX
Facsimile number: 0171 333 8437
Attention: Managing Director
(d) if to UniHolding:
Address: 00 Xxxxxx Xxxxxx
Xxx Xxxx
Xxx Xxxx
00000
United States of America
Facsimile number: (000) 000 0000
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Attention: President
17.2 Any Notice served personally shall be deemed to have been given upon
such service, any Notice so posted by first class registered airmail
post shall be deemed to have been given 7 Business Days after the same
shall have been posted and any Notice by facsimile transmission shall
be deemed to have been given upon transmission and receipt of the
appropriate answerback. In proving delivery of any Notice hereunder it
shall be sufficient to prove that the letter or facsimile transmission
containing such Notice was properly addressed and as the case may be put
into the post as a pre-paid registered letter or despatched.
18. COUNTERPARTS
This Agreement may be entered into in any number of counterparts and by
the parties to it on separate counterparts, each of which when so
executed and delivered shall be an original, but all the counterparts
shall together constitute one and the same agreement. Any of the Second
Optionholders who do not so execute a counterpart within 60 days of this
Agreement being signed by the Company and UniHolding shall have no
rights hereunder.
19. GOVERNING LAW
This Agreement shall be governed by English law and the parties hereto
hereby submit to the non-exclusive jurisdiction of the English Courts.
20. FIRST OPTIONHOLDER'S AND SECOND OPTIONHOLDERS' REPRESENTATIONS
The First Optionholder and the Second Optionholders represent and
warrant to the Company that:
(a) they each are an "accredited investor" within the meaning of Rule
501 under the Securities Act of 1933 and each were not organised
for the specific purpose of acquiring the Option Shares;
(b) they have sufficient knowledge and experience in investing in
companies similar to the Company in terms of the Company's stage
of development
27
31
so as to be able to evaluate the risks and merits of
their investment in the Company and they are able to financially
bear the risks thereof upon any investment so made;
(c) they have had the opportunity to discuss the Company's business,
management and financial affairs with the Company's management and
have taken such opportunity;
(d) if either of the Optionholders shall exercise one of the Options the
Option Shares being purchased by either the First Optionholder or the
Second Optionholders will be acquired for its or their own account
for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof;
(e) that each Optionholder understands that (i) the Option Shares have
not been registered under the Securities Act of 1933 by reason of
their issuance in a transaction exempt from the registration
requirements of the Securities Act of 1933 pursuant to Section 4(2)
thereof or Rule 505 or 506 promulgated under the Securities Act of
1933, (ii) the Exercised Option Shares must be held indefinitely
unless a subsequent disposition thereof is registered under the
Securities Act of 1933 or is exempt from such registration, (iii)
the Exercised Option Shares will bear a legend to such effect and
(iv) the Company will make a notation on its transfer books to such
effect.
(f) each Optionholder has made its own decision to execute this
Agreement and/or exercise any Option granted hereunder to purchase
any Option Shares and has not relied on the decision of any other
shareholders of the Company to execute this Agreement and/or
exercise any Option granted hereunder to purchase any Option Shares
in making its investment.
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SCHEDULE 1
SECOND OPTIONHOLDERS
1 Xxxxx Xxxxxxx
2 Xxxxxx Xxxxxxxxxxx
3 Poly Ventures II Limited Partnership
4 Xxxx Brothers & Company, Incorporated
5 Xxxxxxx Xxxxxx and Xxxx Xxxxxxx
6 Xxxxxxx XxXxxxx
7 Xxxxx Xxxxxx
8 Xxxxx Xxxxxxxxxxx
9 Xxxxx Deutsch
10 Xxxxx Xxxxxxx
11 Xxxxxxx Xxxxxxx
12 Xxxx Xxxxxxxxxxx
13 Xxxxxx Xxxxxx
14 Xxxx Xxxxxxxxx
15 Xxxxxx Xxxxxx
16 Davstar II
17 Xxxxxx Xxxxxx
18 Xxxxxx Xxxx
19 Long Island Venture Fund, L.P.
20 Xxxxxxxx Xxxxxx
21 Xx. Xxxxxxx Xxxxxxx
22 Xxxxx Xxx Xxxxx and Xxxxxxx X Xxxxxxxxxxx
23 Xxxx Xxxx
24 NYS Science & Technology Foundation
24 Xxxxx Xxxxxx
26 Xxxx Xxxxxxxx
27 Xxxxxx Xxxxxxx
28 Xxxxxx Xxxxxx
29 Xxxxxxx Xxxxx
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SCHEDULE 2
INFORMATION CONCERNING THE COMPANY
The Company:
-----------
Registered No: 2626808
Registered Office: Bewlay House, 00 Xxxxxxxxx Xxxx,
Xxxxxx, Xxxxxx XX0 0XX
Date and Place
of Incorporation: Cardiff: 5 July 1991
Class of Company: Private Limited
Directors: Xxxx Hoekfelt
Xxxxx X'Xxxxxxx
Xxxxxxx Xxxx
Name Commencement Date Remuneration Job Title Benefits
---- ----------------- ------------ --------- --------
Xxxxx
X'Xxxxxxx 10 Aug 1995 Salary: 110,000 Chief Variable salary
pounds sterling Executive based bonus
pa subject
to achieving
performance
targets
Xxxx
Hoekfelt 10 Aug 1995 Consultancy Chief N/A
fee of 4,000 Operating
pounds sterling Officer
pm + expenses
Xxxxxxx Xxxx 11 November 1993 N/A Director N/A
34
Secretary: Xxxxxxx Xxxx
Authorised Share Capital: 5,000,000 pounds sterling divided into
5,000,000 ordinary shares of 1.00 pounds
sterling each.
Issued Share Capital: 500,000 pounds sterling
Loan Capital: nil
Auditors: Xxxxxx Xxxxxxxx and Co, 0 Xxxxxx Xxxxxx,
Xxxxxx XX0X 0XX
Accounting Reference
Date: 31 May
Tax Residence: United Kingdom
35
SCHEDULE 3
PARTICULARS OF UNIHOLDING
Name: UniHolding Grp.
Address: 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000
No of Ordinary Shares 500,000
held by the Sole
Shareholder:
36
SCHEDULE 4
CALCULATION OF OPTION SHARES AND THE OPTION PRICE
1. Number of Option Shares for which the First Optionholder or Second
Optionholders shall be entitled to subscribe:
(a) First Optionholder:
The Option Shares to be allotted to the First Optionholder hereunder
shall be calculated as the number of Shares of the Company that
represents:
(i) the lower of twenty (20) per cent of the aggregate number of
Shares in the capital of the Company outstanding immediately
after the exercise of the Option (this number of Option Shares
being referred to as "the Maximum Option Shares"); or
(ii) the same percentage of the aggregate number of Shares in the
capital of the Company immediately after the Exercise as is
equivalent to the percentage arrived at by dividing (i) that
amount which is five sevenths of the aggregate value of the
investment made in the First Optionholder by UniHolding
pursuant to the Stock Purchase Agreement and NDA Option
Agreement ("the Company Investment") by (ii) that amount which
is the sum of (a) 2.688 ("the Valuation Multiple") times the
consolidated revenues of the Company and its Subsidiaries as set
forth in the Company's audited consolidated financial statements
for the fiscal year ended May 31 1997 (or if the fiscal year is
changed, to the fiscal year ended on the date which is closest
to, and not later than May 31 1997), less any indebtedness for
borrowed funds (excluding inter-group financing otherwise than
on arms length, trade creditors and capitalized leases of the
Company and its subsidiaries as set forth in such statements),
plus (b) the amount of the Company Investment (this number of
Option Shares being referred to as "the First Calculated
Option Shares").
For the avoidance of doubt the First Optionholder acknowledges that
in no circumstances shall it be entitled to a percentage shareholding
in the
37
Shares of the Company in excess of twenty (20) per cent of the whole.
Sample calculations relating to the application of paragraph 1 hereof
are attached as Annexure 3 for information purposes.
(b) (Subject to Clause 2.2 of the Agreement) Second Optionholders:
The Option Shares to be allotted hereunder shall be calculated as the
number of Shares of the Company that represents:
(i) the lower of the Maximum Option Shares; or
(ii) the same percentage of the aggregate number of Shares in the
capital of the Company immediately after the Exercise as is
equivalent to the percentage arrived at by dividing (i) that
amount which is one half of the aggregate value of the
investment made in the First Optionholder by UniHolding
pursuant to the Stock Purchase Agreement and NDA Option
Agreement ("the Company Investment") by (ii) that amount which
is the sum of (a) the Valuation Multiple times the consolidated
revenues of the Company and its Subsidiaries as set forth in the
Company's audited consolidated financial statements for the
fiscal year ended May 31 1997 (or if the fiscal year is
changed, to the fiscal year ended on the date which is closest
to, and not later than May 31 1997), less any indebtedness for
borrowed funds (excluding inter-group financing otherwise than
on arms length, trade creditors and capitalized leases of the
Company and its Subsidiaries as set forth in such statements),
plus (b) the amount of the Company Investment (this number of
Option Shares being referred to as "the Second Calculated
Option Shares").
For the avoidance of doubt the Second Optionholders acknowledge that
in no circumstances shall they be entitled to an aggregate percentage
shareholding in the Shares of the Company in excess of twenty (20) per
cent of the whole Sample calculations relating to the application of
paragraph 1 hereof are attached as Annexure 3 for information
purposes.
2. Option Price per Option Share:
38
(a) In the event that the Option Shares represent less than the
Maximum Option shares the Option Price shall be equal to the
Company Investment divided by the Option Shares.
(b) In the event that the Option Shares represent the Maximum Option
Shares the Option Price shall be calculated to the nearest 9th
digit as follows:
Option Price = A x (Nm / Nc)
-------------
Nm
where:
A is the Company Investment
Nm is the Maximum Option Shares
Nc is the First Calculated Option Shares if paragraph 1(a)
above applies or the Second Calculated Option Shares if
paragraph 1(b) above applies.
3. Adjustments:
(a) If, after the exercise of the Option and before the Termination
Date (provided this Option has not been theretofore exercised),
shares of any class of the Company other than Shares is delivered
as a scrip dividend on outstanding shareholdings, then in
addition to any shares issuable upon exercise of the Option the
holder thereof shall upon such exercise be entitled to receive
the same number of the shares of scrip dividend shares plus any
shares, securities or property issued upon any subsequent
exchange, replacement, subdivision or combination thereof, to
which the holder would have been entitled had the Option been
exercised immediately prior to such scrip dividend. No adjustment
in the Option Price shall be made merely by virtue of the payment
of a stock dividend specified in this paragraph.
(b) If after the exercise of the Option and before the Termination
Date (provided the Option has not been theretofore exercised),
the Company shall, by dividend or otherwise, distribute to
holders of its capital stock assets in liquidation or partial
liquidation, the Option Price shall be adjusted so that the same
shall equal the price determined by multiplying the Option Price
by a fraction of which the numerator shall be the current
39
fair market value per share of all of the Shares of the Company on
the date fixed for the determination of shareholders entitled to
receive such distribution less then applicable fair market value
of the portion of the assets so distributed applicable to one Share
and the denominator shall be such current fair market value per
Share, such adjustment to become effective simultaneously with the
determination of the shareholders entitled to receive such
distribution.
(c) In case of any reclassification or change of the Company's Shares
(other than a change in par value, or from par value to no par value)
after the date of this Agreement but before the Termination Date
(provided the Option has not been theretofore exercised), or in case
of any consolidation or merger of the Company with or into another
corporation (other than a merger with another corporation in which
the Company is the surviving corporation and which does not result in
any reclassification or change of the Company's Shares other than a
change in any reclassification or change of Shares other than a
change in par value, or from par value to no par value, or from no
par value to par value) after the date of this Agreement and before
the Termination Date (provided the Option has not theretofore been
exercised), the Company or such successor corporation shall execute
and deliver to the holder hereof a new Option giving such holder the
right to exercise such new Option and procure upon such exercise, in
lieu of each Share theretofore to be issued and allotted upon
Exercise of the predecessor Option, the number and type of securities
into which the Shares theretofore issuable upon Exercise immediately
prior to such reclassification, change, consolidation or merger would
have been converted upon such reclassification, change, consolidation
or merger. Such new Option shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments
provided for in this paragraph 3(a). The provisions of this
paragraph 3(a) shall similarly apply to successive reclassification,
changes, consolidations and mergers.
(d) Upon each adjustment in the Option Price, the Option Shares into
which this Option may be converted shall be adjusted to the product
obtained by multiplying the number of Shares subject to the Exercise
of this Option immediately prior to the adjustment in the Option
Price by a fraction the numerator of which shall be the Option Price
immediately prior to such adjustment and the denominator of which
shall be the Option Price
40
immediately thereafter.
(e) In the event of the occurrence of any event or transaction after the
date of this Agreement not contemplated by subparagraphs (a) through
(c) of this paragraph 3 that would require an adjustment to the
Option Price to remain consistent with the intent and purpose of this
paragraph 3 then the board of Directors shall make such adjustment
to the Option Price as they shall deem reasonable and consistent with
the intentions and purposes of this paragraph 3 and general
principles of equity.
(f) The Company will promptly send to each Optionholder upon request a
statement, certified by the Company's finance director setting forth
the Option Price as then adjusted, describing all adjustments in
number of Shares purchasable, and setting forth a brief statement of
the facts requiring such adjustments.
(g) In any case in which the provisions of this paragraph 3 shall require
that an adjustment shall become effective immediately after the
occurrence of any relevant event ("record date") the Company may
defer until the occurrence of such event allotting to the
Optionholder to the extent exercised after such record date and
before the occurrence of such event, the additional Shares to be
allotted upon such conversion by reason of the adjustment required
by such event over and above the Shares to be allotted upon such
Exercise before giving effect to such adjustment provided, however,
that the Company shall deliver to such Optionholder a due xxxx or
other appropriate instrument evidencing such Optionholder's right
to receive such additional Shares upon the occurrence of the event
requiring such adjustment, provided further that if such event does
not occur, the adjustment required by such event will be revoked,
effective as of such record date, and will have no effect.
4. Notice of Adjustments
Upon any adjustment of the Option Price or other adjustment pursuant to
paragraph 3, then and in each such case the Company shall give notice
thereof, by first class mail, postage prepaid, to the Optionholder, which
notice shall state the Option Price resulting from such adjustment, or
specify such other adjustment pursuant to paragraph 3, setting forth in
reasonable detail the method of
41
calculation and the facts upon which such calculation is based, provided,
however, that such notice may be included in the notice to be sent
pursuant to Clause 6.1 of the Agreement.
42
SCHEDULE 5
THE WARRANTIES
1. CAPACITY
1.1 The Company is duly incorporated and validly existing under the laws of
England and Wales.
1.2 The Company has power to enter into this Agreement and to perform the
obligations expressed to be assumed by it and has taken all necessary
corporate action to authorise the execution, delivery and performance of
this Agreement.
1.3 This Agreement has been duly executed by the Company.
1.4 The performance of the terms of this Agreement or any other agreement
referred to herein by the Company will not violate any provision of:
(a) any known law or regulation or any known order or decree of any
authority, agency or court binding on the Company;
(b) the Memorandum and Articles of Association of the Company;
(c) any loan stock, bond, debenture or other deed, mortgage, contract or
other undertaking or instrument to which the Company is a party and
each such agreement referred to in this paragraph 1.4 constitutes a
legal valid and binding obligation on the Company enforceable in
accordance with its respective terms.
2. SUBSIDIARIES, PARTNERSHIPS AND JOINT VENTURES
2.1 The Company has not now and has not since its incorporation had any
Subsidiary nor has it agreed that it will at any time in the future have
any Subsidiary.
2.2 The Company has not since its incorporation been a subsidiary of any body
corporate (wherever incorporated) other than UniHolding.
2.3 The Company is not the owner or the registered holder of any share in or
other
43
security of any body corporate wherever incorporated nor has it agreed to
become the owner or registered holder of any such share or security.
2.4 The Company is not a party to any partnership, joint venture, agency or
distributorship agreement.
3. CONDUCT OF BUSINESS, CONTRACTS, ETC.
3.1 No alteration will pending the Exercise be made to the Memorandum and
Articles of the Company, true and complete copies of which are attached
hereto as Annexure 1.
3.2 The Company has not acted or engaged in any transaction otherwise than
within the powers and in accordance with the provisions of its Memorandum
and Articles.
3.3 The Company is not a party to or subject to any agreement, transaction,
obligation, commitment, understanding, arrangement (contractual or
otherwise) or liability:
(a) which is of unusual or long term nature or involves obligations of a
material nature or magnitude; nor
(b) which is outside the ordinary and/or proper course of business of the
Company; nor
(c) which was entered into by the Company otherwise than by way of
bargain at arm's length; nor
(d) which it is incapable of performing or the performance of which is
likely to result in a loss to the Company or require undue or unusual
expenditure of money or effort; nor
(e) the duration, validity or terms of which will in accordance with its
terms be terminated or prejudicially affected by the sale of the
Option Shares pursuant to this Agreement or compliance with any other
provision hereof; nor
44
(f) which is between the Company and any major distributor, customer or
supplier of the Company which is not terminable by the company on
less than 90 days notice without cost or other liability to the
Company;
(g) which is an agency or distributorship agreement which is not
terminable by the company on less than 90 days notice without cost
or other liability to the Company;
(h) which in relation to the Company's assets is a lease or a contract
for hire, rent, hire purchase or purchase by way of credit sale or
periodical payment or maintenance agreement by which the Company is
incurring an individual annual liability in excess of 75,000 pounds
sterling;
(i) which in respect of each individual contract requires an aggregate
consideration in excess of 75,000 pounds sterling per annum but
excluding any contract or contracts entered into by the Company in
the normal course of its business.
(j) which restrict the freedom of the Company to carry on its business
in any part of the United Kingdom or any other part of Europe in such
manner as it thinks fit, or purchase or supply or sell its materials
and services or products by such means and to such persons, and to
acquire materials, services and plant and equipment from such
persons, as it may from time to time;
(k) which gives or creates any option, right to acquire, mortgage,
charge, pledge, lien, (other than a lien arising by operation or law
in the ordinary course of trading) or other form of security of
encumbrance or equity on over or affecting the whole or any part of
the undertaking or assets of the Company and no claim has been made
by any person to be entitled to any of the same;
(l) by which the Company has contracted to guarantee any obligation for
borrowed money or otherwise;
(m) which, in relation to the purchase of fixed assets or for the future
purchase of materials, supplies or equipment is in excess of the
Company's normal or projected operating requirements.
45
3.4 The Company is not a party to any joint venture, consortium or partnership
arrangement or agreement or a member of any unincorporated association
other than a recognised trade association.
3.5 The Company is not aware without having made any specific enquiry of any
breach of, or any invalidity or grounds for determination, recision,
avoidance or repudiation of, any agreement which the Company is a party
and the Company is not aware without having made any specific enquiry of
any breach or any anticipated breach of the other party to any contract
or agreement to which it is a party.
3.6 Since 31 May 1994 the Company has received no notice from any customer or
supplier terminating or threatening to terminate or materially reducing or
threatening to materially reduce its purchases from or the provision of
goods or services to the Company.
3.7 As at the date of this Agreement only, save as set out in Schedule 8
comprising a list of all the contractual commitments of the Company the
Company has not at the date of this Agreement entered into any material
binding contractual obligation, arrangement or liability with any third
party or Group Member.
4. SHARE CAPITAL
4.1 The Option Shares to be issued and allotted pursuant to this Agreement
will subject to the terms hereof be duly issued free of any pre-emption
rights.
4.2 The entire allotted and issued share capital of the Company at the date
hereof is as set out in Schedule 2 and all such shares are fully paid up.
4.3 Save as disclosed none of the Shares are subject to any encumbrance and
there are no agreements or arrangements or commitments to create any such
encumbrance.
4.4 Save as provided in this Agreement there are no agreements or instruments
in force to which the Company is a party which (whether conditionally or
unconditionally) require or confer the right to require the allotment or
issue of any share capital, stock, debenture, debenture stock, loan stock,
bonds or any other securities of any description of the Company now or at
any time in the
46
future and no person is entitled to any option or other right in respect
of any of the Option Shares.
4.5 Save as provided in this Agreement there are no holders of shares,
warrants, options, convertible securities or any other current or
contingent rights to purchase or otherwise acquire equity securities or
other securities of any description.
4.6 Save as set out in the Accounts the Company has not since 31 May 1995 made
or paid, and is not proposing to make or pay, any dividend or distribution
and none of the reserves appearing in the Accounts are undistributable
reserves except to the extent stated in the Accounts.
5. ACCOUNTS AND RECORDS
5.1 The Balance Sheet (save as disclosed therein or in any note thereto) has
been prepared in accordance with UK generally accepted accounting
principles and practices for companies carrying on similar businesses and
the Balance Sheet gives a true and fair view of the state of affairs of
the Company at the dates and for the period to which it relates.
5.2 Since 31 May 1995 other than in the ordinary course of business there has
been no material and adverse change in the financial or trading position
of the Company and none of the turnover, the expenses (direct or indirect)
or the margin of profitability of the Company shows and material
deterioration by comparison with the turnover, expenses and margin of
profitability for the corresponding period in the last completed financial
period of the Company.
5.3 Since 31 May 1995 other than in the ordinary course of business the
Company has not made:
(a) any commitment made involving material capital expenditure by the
Company;
(b) any agreement or arrangement entered into or liability whether actual
or contingent incurred by the Company otherwise than for full value;
(c) any asset acquired or agreement entered into by the Company to
acquire
47
any asset for a consideration higher than the market value thereof at
the time of acquisition.
(d) any acquisition or agreement for the acquisition by the Company of
any other business or body corporate or any part thereof or any share
or shares therein;
(e) except for full value any disposal of, or agreement entered into for
the disposal of, any of the assets of the Company;
(f) any repayment wholly or in part by the Company of any loan except
upon the due date for repayment;
(g) any issue of share or loan capital, stock, debenture, debenture
stock, bonds or any other securities, any increase in the authorised
share capital of the Company, any purchase or redemption by the
Company of any shares or other securities in the Company or any
reduction of the capital of the Company;
(h) any distribution by the Company (whether of capital of income) or
dividend or bonus declared or paid on any part of its share capital.
6. LITIGATION AND COMPLIANCE WITH LAW
6.1 There are not any claims or actions known to be pending against the
Company and the Company has received no notice that the Company or any
person for whose acts or omissions the Company is liable is involved in
any litigation, arbitration, prosecution or other legal proceedings or
threatened (except for debt collection of sums not exceeding in total
30,000 pounds sterling or for a sum not exceeding 10,000 pounds sterling
in the case of any one debt) therewith nor are there any circumstances
known to the Company likely to give rise thereto.
6.2 No notice has been received by the Company of any violation of any law,
order, ruling or regulation of the United Kingdom or any local laws in
consequence whereof an unfavourable judgment, decision, ruling or findings
would materially and adversely affect the business operations or financial
condition or income of the Company and in particular, but without
prejudice to the generality of the foregoing, the Company has received no
notice that it has committed any breach
48
of the provisions of any of the Companies Acts or any regulation made
thereunder.
6.3 So far as the Company is aware without having made enquiry, no
investigation or enquiry is being or has been conducted by any UK
Governmental or other body in respect of the affairs of the Company.
6.4 All necessary licenses, consents, permits and authorities (public and
private) have been obtained by the Company to enable the Company to carry
on its business effectively in the places and in the manner in which such
business is now carried on and all such licences, consent, permits and
authorities are valid and subsisting and the Company has received no
notice that any of them may be suspended, cancelled or revoked or not
renewed in the ordinary course whether as a result of this Agreement or
for any other reason whatsoever.
7. TITLE TO PROPERTIES AND ASSETS
Save in respect of any properties and assets disposed of by the Company
in the ordinary course of its business since 31 May 1995 the Company has
good and marketable title to each of the properties and assets set out on
the Balance Sheet or acquired by it since 31 May 1995 and all such
properties and assets are free from all mortgages, charges, liens,
debentures (whether fixed or floating), leases, tenancies, options,
licences, conditions, agreements and claims or any other encumbrance
except for liens arising by operation of law in the normal course of
business or minor imperfections of title, if any, not material in nature
or amount and not materially detracting from the value or impairing the
use of the said properties or assets subject thereto or having a material
adverse impact on the operations of the Company.
8. CONTRACT COMMITMENTS AND OTHER ARRANGEMENTS
The Company has received no notice that it is in material breach of any
property lease or any credit sale, conditional sale or hire purchase
agreement or agreement reserving title to any other person or for payment
on hiring or deferred terms in relation to assets used in connection with
the Company's business and so far as the Company is aware without having
made any enquiry no other contracting party to any such lease or agreement
is in breach thereof and the Company has received no notice of any matters
or things which would materially adversely affect
49
the Company's use and enjoyment of any such leasehold property or assets
for the purpose of the business now being carried on.
9. INSURANCE
The Company has in force insurances in respect of its property, assets and
business against such risks as are normally insured against by such
companies carrying on similar businesses.
10. TAXATION
10.1 The returns or computations which ought to have been made by or in respect
of the Company for any Taxation purposes have been made within the relevant
time limits and all such returns and any other notices, accounts and
information supplied to the Inland Revenue or HM Commissioners of Customs
and Excise or other fiscal authority concerned for any such purposes are up
to date, correct in all material respects and have been made on a proper
basis and the Company has received no written notice that any such returns,
notices, accounts or information is disputed in any material respect by any
fiscal authority concerned and there is no material fact known to the
Company which is likely to give rise to any such dispute or of any
liability to Taxation not provided for in the Accounts. For the purposes of
this Warranty "Taxation" means any liability to any form of taxation levied
or imposed and whether of the United Kingdom or elsewhere (and, without
limitation, includes income tax, corporation tax, advance corporation tax,
capital gains tax, inheritance tax, stamp duty, stamp duty reserve tax,
value added tax, withholding tax, customs and excise duties, National
Insurance contributions, social security and other similar liabilities or
contributions) and generally any amount payable to revenue, customs or
other fiscal authorities whether of the United Kingdom or elsewhere.
10.2 All Taxation for which the Company is liable and which ought to have been
paid at the Exercise Date has been paid and, without prejudice to the
generality of the foregoing, all income tax deductible and payable under
the PAYE system has so far as required been deducted from all payments
made by the Company and all amounts due to be paid by the Inland Revenue
and all deductions and payments required to be made by the Company in
respect of National Insurance contributions (including employer's
contributions) have been made.
50
11. DIRECTORS AND EMPLOYEES
11.1 There are not outstanding any recognition or other agreements or
arrangements with any trade union or other body representing the
Company's employees.
11.2 There is no subsisting contract of service between the Company and any
director or employee or consultant which cannot be terminated without
giving rise to a claim for damages or compensation (other than a statutory
redundancy payment or statutory compensation for unfair dismissal) other
than normal termination payments and accrued holiday pay.
11.3 No director or employee of the Company is remunerated on a profit sharing,
incentive, bonus or commission basis and no such director or employee
receives the benefit of any life assurance or permanent health insurance
provided by the Company other than as provided to all directors or
employees of the Company.
11.4 Schedule 2 includes a list of the names of all the directors of the
Company including the date of commencement of their continuous period of
employment and all material terms of general application applicable to
their employment including any profit sharing incentive and bonus
arrangements to which the Company is a party.
11.5 No director, officer, employee or shareholder of the Company or any wife
or child of any such director, officer, employee or shareholder owns for
investment purposes more than 5% of any class of stock, shares or
debentures of any company whose shares are listed or dealt with on the
Stock Exchange, the Alternative Investment Market or a recognised
investment exchange as such term is defined in the Financial
Services Xxx 0000.
11.6 Since the date of this Agreement no director, officer or employee of the
Company has given or received notice terminating his employment.
11.7 The Company has not received any written notice that the Company has not
in relation to each of its employees complied with all obligations imposed
on it by Article 119 of the Treaty of Rome and all statutes, regulations
and codes of conduct relevant to the arrangements between it and its
employees or any recognised trade union if any, and there are no current
claims against the Company by or with respect to any of its employees.
51
12. INTELLECTUAL PROPERTY
12.1 The Company does not own any Intellectual Property other than copyright
material arising in the normal course of its business and without
prejudice to the generality of the foregoing no employee is entitled to
any award or compensation in respect thereof under the Patents Xxx 0000.
12.2 All Intellectual Property used by the Company in connection with its
business is registered in the name of the Company as proprietor if such
Intellectual Property is capable of registration and no licences,
registered user or other rights in respect thereof have been granted to
any third party.
12.4 As regards any trade marks of the Company the Company has paid all renewal
and other fees or expenses which it is required to pay to ensure the
continuance in force of the registrations of the said trade marks.
12.5 All know-how and technical information used by the Company in connection
with its business is its sole property and no rights to the disclosure or
use thereof have been granted to any third party. Save in relation to the
Optionholders the Company has not disclosed (except in the ordinary course
of its business) any of its confidential know-how, trade secrets or list
of customers to any third party.
12.6 The Company has not received any notice that by carrying on its business
in the ordinary and usual course the Company infringes any industrial
property rights or Intellectual Property rights of any third party, become
liable to make any payment of any royalty or fee or become involved in the
unlicensed use of confidential information disclosed to the Company by any
third party in circumstances which entitle that person to make a claim
against the Company.
12.7 The Company does not use on its letterhead, brochures, sales literature or
vehicles, or otherwise carry on its business under, a name other than its
corporate name.
12.8 The Company has received no notice that any of the Intellectual Property
is being used, claimed, opposed or attached by any person.
52
13. LOANS, GUARANTEES
13.1 Full and accurate details of all overdrafts, loans or other financial
facilities outstanding or available to the Company (other than advances or
loans made to employees of the Company in respect of reimbursement of
business expenses incurred in connection with their employment) will be
contained in the Second Disclosure Letter.
13.2 Other than in the ordinary course of its business no guarantee or
indemnity has been given or granted by the Company in respect of the
discharge of the liabilities or the performance of any of the obligations
(whether present or future) of any other person or any suretyship in
respect thereof.
53
SCHEDULE 6
WARRANTY LIMITATIONS
The provisions of this Schedule shall operate to limit the liability of
the Company under and in respect of a claim under the provisions of
Clause 5 and Schedule 5 of this Agreement and references in this Schedule
to "hereof" and to "liability hereunder" shall be construed to refer to
such liability as appropriate.
1. The Company shall only be liable in respect of any claims brought by the
Optionholders for a breach of the Warranties if the liability in respect
of such claim or claims (together with the aggregate amount of liability
of the Company arising from previous claims if any) would exceed in
aggregate 35,000 pounds sterling (THIRTY FIVE THOUSAND POUNDS) in which
case the Company shall be liable for the whole and not just the excess
over that amount. No single claim may be made against the Company for a
breach of the Warranties where the amount so claimed in respect of that
claim does not exceed 3,500 pounds sterling (THREE THOUSAND FIVE
HUNDRED POUNDS) and that claim shall be disregarded for all purposes.
2. No liability shall attach to the Company in respect of a breach or claim
under the Warranties to the extent that:
2.1 such breach or claim arises as a consequence of a change in the law
or interpretation of the law or a change or withdrawal of any
previously published practice or concession of any tax authority
after the date hereof whether or not such has retrospective effect;
2.2 such breach or claim arises as the result of any provision or reserve
made in respect thereof in the Accounts being insufficient by reason
of any increase in rates of taxation after the date hereof or arises
as the result of the retrospective imposition of taxation as a
consequence of a change in the law enacted after the date hereof;
2.3 such breach or claim or the events giving rise to such breach or
claim would not have arisen but for an act, omission or transaction
of the Optionholders or any person connected with them affected after
the date hereof otherwise than in their ordinary course of business
as presently carried on;
54
2.4 a provision, reserve or allowance in respect thereof is made in the
Accounts or to the extent that the subject matter of the breach or
claim was taken into account in computing the amount of any such
provision or reserve or such matter was specifically referred to in
the notes to the Accounts;
2.5 the amount by which any asset of the Company shall have been
understated in the Balance Sheet or Accounts less:
(a) any amount by which other assets have been over-stated in the
Accounts, and
(b) any amount by which any liabilities shall have been under-stated
therein;
2.6 any amount by which any liabilities of the Company shall have been
over-stated in the Balance Sheet or Accounts less:
(a) any amount by which any other liabilities shall have been
understated in the Accounts, and
(b) any amount by which any assets shall have been over-stated
therein;
3. In assessing the liability of the Company under the Warranties there shall
be taken into account any benefit accruing to the Optionholders as a
consequence of the relevant breach and further there shall be taken into
account the amount of any provision or reserve for liability within the
Accounts which has not been fully utilised at the date of claim but to the
extent so taken into account shall not thereafter be available as a
provision or reserve.
4. The Optionholders shall not be entitled to recover any sum in respect of
any claim for breach of any of the Warranties or otherwise obtain
reimbursement or restitution more than once in respect of any one breach
of the Warranties.
5. In the event of the Company having paid to the Optionholders an amount in
respect of a claim under the Warranties and at any time past, present or
in the future the Optionholders recover from a third party (including any
taxation authority or other competent authority) a sum which is referable
to that payment
55
(whether by payment discount or otherwise) then the Optionholders shall
forthwith repay to the Company of so much of the amount paid by the third
party as does not exceed the sum paid by the Company to the Optionholders.
6. In the event that the Optionholders shall be in receipt of any claim which
might constitute or give rise to claim under the Warranties the
Optionholders shall as soon as reasonably practicable notify the Company
in writing giving full details as far as practicable and further any such
claim or anticipated claim which may be made shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to be withdrawn and
shall become fully barred and unenforceable in respect of the Warranties
at the expiration of twelve months from the date of giving notice of such
claim or anticipated claim unless legal proceedings in respect thereof
have been commenced by the issuing and service of such proceedings against
the Company. The Company shall be entitled to require the Optionholder
to take such reasonable steps or proceedings as the Company may reasonably
consider necessary in order to mitigate any claim under the Warranties and
the Optionholders shall act in accordance with any such requirements of
the Company subject to the Optionholders being indemnified by the Company
against all reasonable costs and expenses incurred in connection
therewith, provided that no claim hereunder shall be capable of being
brought by any Optionholder after the expiry of the limitation period
provided for in the statute of limitations applicable under Delaware Law.
7. Where a breach of the Warranties shall be in respect of a matter where the
Company shall be insured against any loss or damage arising therefrom, the
Optionholders shall not make any claim against the Company under the
Warranties without first allowing the Company a reasonable time to make a
claim against its insurers for compensation for such loss or damage
suffered and thereafter any claim against the Company shall be limited (in
addition to all other limitations on the Company's liability elsewhere
referred to herein) to the amount by which the amount of the loss or
damage suffered by the Optionholders as a result of such breach shall
exceed the compensation paid by the said insurers to the Company and
subsequently paid to the Optionholders.
8. If any claim under the Warranties shall arise by reason of some liability
of the Company which, at the time the claim is notified to the Company, is
contingent only, the Company shall not be under any obligation to make any
payment to the Optionholders in respect of such claim until the expiry of
12 months from the date
56
on which such claim shall have been made and then only if after such time
the contingent liability shall become an actual liability save where the
Optionholders can prove that they have suffered loss notwithstanding that
the loss against the Company shall be contingent only in which case the
provisions of paragraph 10 below shall apply.
9. The Optionholders warrant to the Company that they have not relied on any
representation, warranty, covenant or undertaking of the Company or any
other person save for any representation, warranty, covenant or
undertaking expressly specified in this Agreement and that in relation
only to the period commencing with the First or Second Exercise Period and
expiring on the First or Second Termination Date (as the case may be) they
are not aware of any matter or thing which in their reasonable opinion may
be inconsistent with any of the Warranties or which would or may give rise
to any liability on the part of the Company pursuant to the Warranties.
The Optionholders acknowledge that no representation, warranty, covenant
or undertaking (whether express or implied, statutory or otherwise) made
or alleged to have been made by or on behalf of the Company in connection
with or arising out of the granting of the Option and which is not
contained in this Agreement shall give rise to any liability on the part
of the maker or makers thereof.
10. Nothing in this Schedule or in the Warranties shall be deemed to relieve
the Optionholders of any common law duty to mitigate any loss or damage
which they may respectively suffer in consequence of any breach by the
Company of the terms of this Agreement or in consequence of any matter
giving rise to a claim against the Company and without prejudice to the
generality of this Clause where the loss claimed by the Optionholders
relates to a diminution in the value of the Option Shares as a result of
any breach of warranty the Optionholders shall not take any action in
respect of such breach for a period of 3 months to allow such damages to
be reduced.
11. The Optionholders shall not be entitled to claim that any fact or
circumstances constitutes a breach of any of the Warranties if such fact
or circumstance has been disclosed in this Agreement, the Balance Sheet
and Accounts, the First Disclosure Letter (if any) or the Second
Disclosure Letter or any other letter, document or communication referred
to in this Agreement or in the First or Second Disclosure Letters provided
that it shall not be a defence to the Company to rely on a disclosure
at any subsequent date to the date the disclosure should
57
have been made unless no loss has been occasioned by the lack of
disclosure in relation to the matter in question.
12. The Optionholders acknowledge and confirm that they have entered into this
Agreement solely on the basis of the Warranties and that all other
warranties and representations whether express or implied by statute,
common law or otherwise are excluded.
13. The Optionholders hereby warrant that at the Exercise Date when the
Warranties are deemed to be repeated, subject to the terms of this
Agreement, a liability shall only attach to the Company in respect of a
claim under the Warranties to the extent that the Optionholders have been
denied material adverse information in relation to the Company or that the
information provided to the Optionholders is misleading.
58
SCHEDULE 7
FORM OF EXERCISE NOTICE
Company
Registered Office
Date
Dear Sirs
We, First Optionholder/Second Optionholders, refer to the Company Option
Agreement dated 19 and made between yourselves and ourselves and
to the Option granted by you to us thereunder.
We hereby give notice under and pursuant to clause 3 of the Company Option
Agreement that we exercise the Option granted by you to us in respect of
______ Option Shares at an Option Price of pounds sterling per
ordinary share.
Yours faithfully
For and on behalf of
First Optionholder/Second Optionholders
59
SCHEDULE 8
LIST OF CONTRACTUAL COMMITMENTS
1. Sub-license Agreement dated 28 April 1995 made between Pharmasoft S.A. and
the Company (therein referred to as Uni Clinical Trials Ltd)
2. Assignment dated 19 September 1995 made between UniHolding and the Company
relating to the Marketing Agreement dated 28 February 1995 and made
between UniHolding and the First Optionholder together with that Marketing
Agreement.
3. Master Equipment Lease to be made between the Company and Barclays
Mercantile Business Finance Limited relating to Sun computer equipment.
4. Service Agreement dated 5 April 1995 made between the Company and Dr Xxxxx
X'Xxxxxxx.
5. Service Agreement dated 16 May 1995 made between the Company and Xxxx
Hoeckfelt.
6. Service Agreements have been or are to be made between the following
employees and the Company: Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxxxx,
Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx XxXxxx, Xxxxxx Xxxxxx and Xxx Saint.
(Where any of the employees are employed by J S Pathology PLC, a Group
Member, the costs are re-charged to the Company on a cost recovery basis).
60
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto or
by their duly authorised representative the day and year first above written.
EXECUTED BY )
/s/ Xxxxx Xxxxxxx )
a duly authorised officer of )
NDA CLINICAL TRIAL SERVICES INC )
SIGNED BY )
XXXXX XXXXXXX )
in the presence of: )
Name
Address
Occupation
SIGNED BY )
XXXXXX XXXXXXXXXXX )
in the presence of: )
Name
Address
Occupation
61
SIGNED BY )
XXXXXXX XXXXX )
in the presence of: )
Name
Address
Occupation
EXECUTED BY )
/s/ Xxxxxxx Xxxxx )
a duly authorised officer of )
UNILABS CLINICAL TRIALS LIMITED )
EXECUTED BY )
/s/ Xxxxxxx Xxxxx )
the duly authorised officer of )
UNIHOLDING CORP. )
