1
Exhibit 2.2
SHARE PURCHASE AGREEMENT
between
1. XX0000 Xxxxxxxxxxxxxxxxxxxxx GmbH, a German corporation with its
registered office in Munich, registered in the commercial register of
Munich under No. HRB 116718 ("Xxxxxx GmbH").
AND
2. Xx. Xxxxxx Xxxxxxxxx Xxxxx, Xxx-xxx-Xxxxx-Xxxxxxx 00, X-00000 Xxxxxx,
Xxxxxxx ("Xxxxxx Xxxxx") and Prof. Xx. Xxxxxxxx Xxx ,
Xxxxxx-Xxxx-Xxxxxxx 0, 00000 Xxxxxxxxx, Xxxxxxx ("Xxxxxxxx Xxxxx")
(Xxxxxx Xxxxx and Xxxxxxxx Xxxxx collectively, the "Sellers").
PREAMBLE
1. The registered share capital of GMI Gesllschaft fur Angewandte
Mathematik und Informatik mbH ("gmi") with its registered office in
Munich, registered in the commercial register of Munich under No. HRB
70970, amounts to a nominal value of DM 50,000. It is divided into two
shares, both of which have been fully paid in.
gmi was founded by Xxxxxxxx Xxxxx as sole shareholder on August 23,1983
by the notarial deed of the notary public in Munich Xxxxx Xxxxxxxx,
URNr. P 3699. On February 22, 0000 Xxxxxxxx Xxxxx divided his one share
into two shares and transferred one share of DM 12,400 to Xxxxxx Xxxxx
by notarial deed of the notary public Xxxxx Xxxxxxxx, URNr.
0463/1994.
2. All the issued and outstanding shares in gmi are held as follows:
2.1 Xxxxxxxxx Xxxxx holds one share with a nominal value of DM 37,600;
2.2 Xxxxxx Xxxxx holds one share with a nominal value of DM 12,400.
3. Xxxxxx GmbH desire to purchase from Sellers and Sellers desire to sell
and transfer to Xxxxxx GmbH all their respective shares in gmi
(collectively the "gmi Shares").
Now, therefore, the parties agree as follows:
2
- 2 -
ARTICLE 1
SALE AND TRANSFER OF THE GMI SHARE
1.1 Xxxxxxxx Xxxxx hereby sells and transfers to Xxxxxx GmbH his share
with a nominal value of DM 37,600 as stated in no. 2.1 of the Preamble together
with all ancillary rights, including, without limitation, the rights to vote
such shares and the rights to all profits the distribution of which is resolved
in the future. Xxxxxx GmbH hereby accepts such sale and transfer.
Xxxxxx Xxxxx hereby sells and transfers to Xxxxxx GmbH her share
with a nominal value of DM 12,400 as stated in no. 2.2 of the Preamble together
with all ancillary rights, including, without limitation, the rights to vote
such shares and the rights to all profits the distribution of which is resolved
in the future. Xxxxxx GmbH hereby accepts such sale and transfer.
1.2 The transfer of gmi Shares pursuant to Section 1.1 above shall be
subject to the satisfaction of the condition precedent (Aufschiebende Bedingung)
that Xxxxxx GmbH shall have:
(1) fully paid the cash portion of the Purchase Price as
set forth in Section 2.1 and 2.2 below. Payments
under the Standby Letters of Credit will be deemed
payment of the purchase price with regard to this
condition precedent insofar as the actual cash
portion of the purchase price has been satisfied.
and, cumulatively,
(2) fully delivered the Xxxxxx Stock as set forth in
Section 2.4 below.
The transfer of gmi Share pursuant to Section 1.1 above shall
furthermore be subject to the condition (Bedingung) that this Agreement shall
not have been canceled and/or terminated by either party to this Agreement prior
to the satisfaction of the condition precedent set out above.
1.3 This Agreement is subject to the condition precedent that the
original Letters of Credit as attached to this Agreement as Exhibit B will be
delivered to Bayerische Vereinsbank Aktiengesellschaft, Munich on behalf of
Sellers by July 3, 1997.
1.4 Upon satisfaction of the conditions precedent set out above, title
will pass automatically to Xxxxxx GmbH.
3
- 3 -
ARTICLE 2
PURCHASE PRICE
2.1 The purchase price to be paid to Albrecht Nei for the sale and
transfer of his share as stated in no. 2.1 of the Preamble shall be DM
10,998,000 (in words: Deutsche Xxxx ten million nine hundred ninety eight
thousand) and a number of shares in Xxxxxx International Inc., an Ohio
corporation with its registered office in Cincinnati, Ohio, U.S.A. ("Xxxxxx
Inc.") as set out in Section 2.4 below. The case portion of the purchase price
shall be paid to the following account of Albrecht Nei :
Bayerische Hypotheken- und Wechsel-Bank Aktiengesellschaft, Munich, Xxx
Xxxxx-Xxxxx, Munich
Bank Code No. 700 200 01
Account-No. 0000000000
2.2 The purchase price to be paid to Xxxxxx Xxxxx for the sale and
transfer of her share as stated in No. 2.2 of the Preamble shall be DM 3,627,000
(in words: Deutsche Xxxx three million six hundred twenty seven thousand) and a
number of shares in Xxxxxx Inc. as set out in Section 2.4 below. The case
portion of the purchase price shall be paid to the following account of Xxxxxx
Xxxxx:
Bayerische Vereinsbank Aktiengesellschaft, Munich, Mauerkircherstasse,
Munich, Germany
Bank Code No. 700 202 70
Account-No. 0000000
2.3 The cash portion of the purchase price to be paid to Xxxxxxxx Xxxxx
and Xxxxxx Xxxxx respectively shall be due within five (5) business days after
the completion of the IPO but not later than September 19, 1997, 6 p.m. New
York time, or a later date as mutually agreed in notarial form (Sec. 15 GmbHG,
German Act on Limited Liability Companies) by all parties to this Agreement
(the "Closing Date"). Albrecht Nei and Xxxxxx Xxxxx shall both have the right
to demand payment of the purchase price for the sale and transfer of their
respective share (Teilglaeubigerschaft).
2.4 In addition to the cash portion of the purchase price set out in
Section ? and Section 2.2 above, the purchase price for the transfer of the gmi
Shares shall include the following items:
(1) If Xxxxxx Inc. pursuant to a registration statement (the
"Registration Statement") filed with the U.S. Securities and
Exchange
4
- 4 -
Commission ("SEC") completes its initial public
offering ("IPO") of shares of common stock on or
prior to September 18, 1997, 6 p.m. New York time
(the "Agreed Date") the purchase price to be paid to
Xxxxxxxx Xxxxx shall include shares of Xxxxxx Inc.
common stock, no par value per share ("Xxxxxx
Shares"), having a value (calculated utilizing the
initial IPO offer price and the exchange rate quoted
by Chase Manhattan Bank in New York as of 4 p.m. New
York time at the offering date of the IPO) of DM
3,666,000 (in words: Deutsche Xxxx three million six
hundred sixty six thousand) and the purchase price to
be paid to Xxxxxx Xxxxx shall include Xxxxxx Shares,
having a value (calculated utilizing the initial IPO
offer price and the exchange rate quoted by Chase
Manhattan Bank in New York as of 4 p.m. New York time
at the offering date of the IPO) of DM 1,209,000 (in
words: Deutsche Xxxx one million two hundred nine
thousand).
(2) If Xxxxxx Inc. does not complete its IPO by the
Agreed Date, then the purchase price to be paid to
Albrecht Nei shall include shares of Xxxxxx Inc.'s
Mandatory Convertible Exchangeable Preferred Stock
having the terms and condition set forth on Exhibit A
("Xxxxxx Preferred Shares") and having a liquidation
value (calculated utilizing the exchange rate quoted
by Chase Manhattan Bank in New York as of 4 p.m. New
York as of 4 p.m. New York time as of the Agreed
Date) of DM 3,666,000 (in words: Deutsche Xxxx three
million six hundred sixty six thousand), and the
purchase price to be paid to Xxxxxx Xxxxx shall
include Xxxxxx Preferred Shares having a liquidation
value (calculated utilizing the exchange rate quoted
by Chase Manhattan Bank in New York as of 4 p.m. New
York time as of the Agreed Date) of DM 1,209,000 (in
words: Deutsche Xxxx one million two hundred nine
thousand).
(3) The Xxxxxx Shares or Xxxxxx Preferred Shares
respectively, as the case may be, (collectively,
"Xxxxxx Stock") included in the Purchase Price will
be duly authorized, validly issued, fully paid and
non-assessable shares of Xxxxxx Inc.'s Capital Stock
and will be delivered to the Sellers free and clear
of any and all liens, hypothecations, encumbrances or
restrictions of any kind other than restrictions of
any kind other than restrictions on transfer imposed
by United Stated Federal Securities Laws and
regulations and by other applicable laws under the
restrictions set forth in Article 7 of this Agreement
(collectively, the "Permitted Restrictions").
5
- 5 -
(4) Xxxxxx GmbH shall deliver at the Closing Date the
respective number of Xxxxxx Shares of Xxxxxx Shares
or Xxxxxx Preferred Shares, as the case may be, to
Albrecht Nei and Xxxxxx Xxxxx. In the even that it is
not possible to deliver whole shares of Xxxxxx Stock
in the proportion as set forth in this Article 2.4,
any remaining fractional amount shall be paid in cash
at the Closing Date to Xxxxxxxx Xxxxx and Xxxxxx
Xxxxx.
(5) As used in this Agreement, the term "complete" as it
pertains to the IPO includes the following events:
consummation of the IPO which includes closing of the
transaction and distribution of the proceeds of the
offering to Xxxxxx. Within 48 hours after completion
of the IPO, Xxxxxx GmbH shall notify Sellers in
writing of the completion of the IPO.
2.5 Albrecht Nei and Xxxxxx Xxxxx shall each have the right to exercise their
respective rights under the Standby Letters of Credit issued by the
Nationsbank, N.A. on July 1, 1997, copies of which are attached hereto and
incorporated herein as Exhibit B, if full payment of the respective purchase
price pursuant to section 2.1 and 2.2 was not credited to Albrecht Nei ' and/or
Xxxxxx Xxxxx'x account by September 21, 1997, 6 p.m. New York time, or a later
date as mutually agreed in notarial form by all parties to this Agreement. The
rights under the respective Letters of Credit shall be exercisable by Albrecht
Nei and Xxxxxx Xxxxx, as the case may be, on or after September 22, 1997 under
presentation of a document containing the following statement: "I have not
received the purchase price under the Share Purchase Agreement dated July 1,
1997, by and among the Shareholders of GMI Gesellschaft fur Angewandte
Mathematik und Informatik mbH and XX0000 Xxxxxxxxxxxxxxxxxxxx GmbH, a German
corporation". If the Purchase Price is credited to the Xxxxxxxx Xxxxx' and
Xxxxxx Xxxxx'x accounts later than the Closing Date, interest shall be payable
thereon with effect from this date at an annual rate of three percent (3%)
above the respective discount rate of the German Federal Bank, calculated on
the basis of 30 interest days per month and 360 interest days per annum.
2.6 Xxxxxx GmbH shall bear all of its costs and expenses and all costs
and bank charges connected with the Standby Letters of Credit referred to in
section 2.5, including but not limited to issuance and delivery costs as well as
the costs of Sellers for the exercise of rights under the Standby Letters of
Credit. Xxxxxx GmbH shall also bear up to a total amount of US$ 500,000 (US
Dollars five hundred thousand) plus reasonable expenses of Sellers' investment
banking costs with regard to Xxxxx Xxxxxx. Xxxxxx GmbH shall also bear the costs
of notarization of this Agreement. Xxxxxx GmbH shall also bear the costs and
expenses of Seller's legal advisers up to DM 150,000 (Deutsche Xxxx hundred
fifty thousand) plus value added tax.
2.7 Simultaneously with the payment of the cash portion of the purchase
price and the delivery of Xxxxxx Shares or Xxxxxx Preferred Shares respectively,
Xxxxxxxx Xxxxx and
6
- 6 -
Xxxxxx Xxxxx shall each confirm without undue delay in writing to Xxxxxx GmbH
that each of the conditions precedent pursuant to sections 1.2 and 1.3 of this
Agreement have been satisfied; furthermore, simultaneously the Standby Letters
of Credit shall be delivered to Xxxxxx GmbH. The notary shall receive copies of
the confirmations, which shall be attached to this document as proof that the
transfer of the shares has been effected.
ARTICLE 3
GUARANTEES OF SELLERS
3.1 Guarantees with Respect to the gmi Shares and the Sellers
As an inducement to Xxxxxx GmbH and recognizing Xxxxxx GmbH's
reliance thereupon, the Sellers, jointly and severally, guarantee in the form of
an independent guarantee ("Garantieversprechen") to Xxxxxx GmbH with respect to
the gmi Shares that as of the date of this Agreement and as of the Closing Date:
(1) each Seller has full power and authority to enter
into and perform this Agreement, which constitutes a
binding obligation on him or her in accordance with
its terms;
(2) The statements in the preamble hereto are complete
and correct. The registered share capital of gmi
stated in the preamble has been fully paid in; no
refunds have been made (Sec. 30 paragraph 1 GmbHG,
German Act on Limited Liability Companies).
There is no liability to effect further contributions
(Nachschuesse) pursuant to section 26 GmbHG (German
Act on Limited Liability Companies);
(3) Sellers hold each of their shares in gmi as
sole owner in their own name and on their own
account and can dispose of them freely and without
consent of any third party. The consent to the
execution of this Agreement by Xxxxxxxx Xxxxx' wife,
Xxx. Xxxx Xxxxx, and the consent to the
execution of this Agreement by Xxxxxx Xxxxx'x
husband, Mr. Xxxxxxx Xxxxx, have been given and will
be attached to this Agreement. The shares are free
of any encumbrances for the benefit of third parties
or other rights of third parties and there is no
agreement or arrangement to give or create any such
encumbrance or right;
7
- 7 -
(4) the Sellers are entitled to transfer the gmi Shares
to Xxxxxx GmbH on the terms of this Agreement without
the consent of any third party;
(5) each Seller represents that no "Sperrbetrag" (amount
of blockage) according to Section 4 paragraph 5 of
the German Reorganization Tax Act
(Umwandlungssteuergesetz) in connection with Section
50(c) of the German Income Tax act
(Einkommensteuergesetz) exists and that since the
installation of gmi none of the shares have been
owned by a taxpayer that was not entitled to
participate in the German corporate imputation system
(Anrechnungsverfahren).
(6) each Seller acknowledges and understands that he or
she is responsible for obtaining independent legal
advice with respect to the Xxxxxx Stock included in
the Purchase Price and the restrictions attached to
Sellers' right to resell or transfer in any way said
Xxxxxx Stock; that such Seller has been given the
opportunity to ask questions of, and receive answers
from, the officers of Xxxxxx Inc. concerning Xxxxxx
Inc. and its business and the terms and conditions of
the transactions contemplated by this Agreement; and
that in view of Seller's extensive discussions with
representatives of Xxxxxx Inc concerning such
transactions and such Seller's direct access to
Xxxxxx Inc., disclosures by Xxxxxx Inc. to Seller
shall constitute disclosure to each Seller and all
Sellers for all purposes, including without
limitation for purposes of compliance with all
applicable securities laws regarding disclosure;
(7) the gmi Shares sold by each Seller do not constitute
the entire assets of that Seller within the meaning
of Section 000 XXX (Xxxxxx Civil Code);
(8) each Seller acknowledges and understands that the
Xxxxxx Stock included in the Purchase Price have not
been and will not be registered under the United
States federal Securities Act of 1933 (the
"Securities Act"), or any other applicable securities
laws, (except to the extent required under Sec.
2.2(3) hereof or should Sellers exercise their
registration rights under the Registration Rights
Agreement in the form attached hereto and
incorporated herein as Exhibit C (the "Registration
Rights Agreement") and are being offered only outside
the United States to non-U.S. persons within the
meaning of and in accordance with Regulation S under
the Securities Act;
8
- 8 -
(9) each Seller represents and warrants that he or she is
not a U.S. person and is acquiring the Xxxxxx Stock
included in the Purchase Price in a transaction
outside the United States in accordance with Rules
903 and 904 of Regulation S under the Securities Act.
(10) Sellers have been informed that Xxxxxxx Xxxxxx Xxxxx
and Xxxxxxxxxxx X. Xxxxxx will sell part of their
current shareholding in Xxxxxx Inc. in connection
with the IPO but not more than 30% of their current
shareholding.
3.2 Guarantees With Respect to gmi
As an inducement to Xxxxxx GmbH and recognizing Xxxxxx GmbH's
reliance thereupon, the Sellers, jointly and severally, guarantee in the form of
an independent guarantee ("Garantieversprechen") to Xxxxxx GmbH with respect to
gmi that as of the date of this Agreement unless stipulated herein otherwise:
(1) As of the date of this Agreement and of the Closing
Date gmi is a limited liability company (Gesellschaft
mit beschraenkter Haftung, GmbH), duly organized
under the laws of the Federal Republic of Germany and
validly existing. The Commercial Register, Law Court
of Munich, HRB 71970, was inspected by the notary. A
copy of the registration is attached to this
document. gmi has full corporate power and authority
to own its assets and to carry on its contract
research organization business ("CRO Business") as
now being conducted.
(2) As of the date of this Agreement and of the Closing
Date the Articles of Association (Satzung) of gmi
will not be changed by Sellers. A copy of the
Articles of Association has been handled over to
Xxxxxx GmbH. There exist no shareholders' resolutions
and/or obligations concerning any amendments of the
Satzung.
(3) A copy of the annual accounts as of December 31, 1996
of gmi, (hereinafter, the "gmi Financial Statement"),
initialed by Sellers, has been handed over to Xxxxxx
GmbH, which has acknowledges receipt, during the
notarization. The gmi Financial Statement has been
prepared with the care of an ordinary businessman in
accordance with the German principles of accounting
and bookkeeping ("GOB") pursuant to Sec. 243 HGB
(German Commercial Code). The gmi Financial Statement
fairly presents in all material respect the financial
and profit situation of gmi at the
9
- 9 -
respective dates of and for the periods referred to
in such gmi Financial Statement, observing continuity
in the accounting and evaluation methods. The gmi
Financial Statement was delivered to Xxxxxx Inc.
prior to execution of this Agreement and audited on
Xxxxxx Inc.'s behalf by Coopers & Xxxxxxx,
independent certified public accountants and that in
view of gmi's extensive discussions with
representatives of Coopers & Xxxxxxx concerning such
transactions and Coopers & Xxxxxxx'x direct access to
gmi, disclosures by Sellers and/or gmi to Coopers &
Xxxxxxx shall constitute disclosure to Xxxxxx GmbH
for all purposes. gmi is in good financial standing.
(4) Except as set forth in Schedule 3.2(4), which is
attached to this Agreement, gmi has, to the best of
Sellers' knowledge and belief after due
investigation, no liabilities or obligations of any
nature as of December 31, 1996 except for liabilities
reflected or reserved against in the gmi Financial
Statement and gmi is not liable for any indemnity or
warranty risks with respect to services performed
prior to January 1, 1997 unless sufficient reserves
have been created in respect thereof in the gmi
Financial Statement.
(5) As of the date of this Agreement and of the Closing
Date, gmi has duly withheld or collected, and to the
extent required, paid to the proper governmental
authority or other person all taxes due as of the
date of this Agreement, including all VAT, that gmi
is legally required to withhold, collect and pay.
In the event that an external tax audit (Steuerliche
Auss enpruefung) for the period up to December 31,
1996, gives rise to subsequent tax claims, after
set-off of excess taxes and reduced taxes (Mehrund
Mindersteuern), of more than DM 50,000 shall be borne
by the Sellers. The last external tax audit took
place in respect of the years 1991 to 1993. The audit
report of 21.03.1995 has been given to Xxxxxx GmbH.
All deficiencies proposed as a result of any such
audit have been paid. There are no ongoing tax audits
of ro relating to gmi and there is no tax sharing
agreement that will require any payment by gmi after
the date of this Agreement. As of December 31, 1996,
tax reporting and financial reporting are identical
(Die Handelsbilanz entspricht den steuerlichen
Voraussetzungen).
10
- 10 -
(6) The business of gmi has been properly conducted since
January 1, 1997 in accordance with the ordinary
course of business. To the best of Sellers' knowledge
and belief after due investigation, since then there
has not been any material adverse change in the
business, operations, properties, prospects, assets
or condition, financial or otherwise, of gmi, and no
event has occurred or circumstance exists that may
result in such a material adverse change, in
particular:
(a) No liabilities of any kind have been created
for which there has not been a reasonable
quid pro quo; in particular no contracts
with danger of losses at the time the
contracts were awarded have been accepted;
(b) No assets have been assigned without
reasonable consideration;
(c) No liabilities have been created which fall
outside the ordinary course of business;
(d) No substantial agreements of gmi have been
concluded, changed or terminated which fall
outside the ordinary course of business;
(e) There has been no damage or loss which
either individually or cumulatively could
have a substantial effect on the existence
of gmi or its financial situation.
(7) As of the date of this Agreement and of the Closing
Date, gmi has paid, or has made provision for the
payment of, all employee's contributions and
employer's contributions to social insurance and
pension, deferred compensation and other employee
benefit payments required to be made by gmi with
respect to its employees and agents and which are due
as of the date of this Agreement. The consummation of
the transactions contemplated by this Agreement will
not result in the payment, vesting or acceleration of
any benefit available to the employee benefit plan or
under any employment contracts or other arrangements.
(8) Schedule 3.2(8), which is attached to this Agreement,
contains a complete and correct list of all
industrial property rights (patents, trademarks,
copyrights and design patents) and intellectual
property
11
- 11 -
rights, which are owned by gmi. To the best of
Sellers' knowledge and belief after due
investigation, gmi is not in violation of and has not
breached any licensing agreement with respect to
patents, trademarks, copyrights or other intellectual
property. All of the patents, trademarks, copyrights
and other intellectual property used by gmi in the
conduct of its CRO Business are either owned by gmi
or can be used according to licensing agreements to
which gmi is party and which, to the best of Sellers'
knowledge and belief after due investigation, are
valid. To the best of Sellers' knowledge and belief
after due investigation, none of the patents,
trademarks, copyrights or other intellectual property
utilized by gmi in the conduct of its CRO Business
infringes on the intellectual property rights of any
third party.
(9) As of the date of this Agreement and as of the
Closing Date, to the best of Sellers' knowledge and
belief after due investigation, the conduct and
operation of gmi's CRO Business have been and are in
conformity with all applicable laws and regulations,
including the German Medication Act (Gesetz uber den
Verkehr mit arzneimitteln) and the Guideline for Good
Clinical Practice as adopted by the European Agency
for the Evaluation of Medicinal Products and gmi has
not received any notice asserting or suggesting any
failure, or potential failure, to comply with or
confirm to any such laws or regulations;
(10) As of the date of this Agreement and of the Closing
Date, all assets of gmi which can be included in a
balance sheet are fully owned by gmi without being
subject to any charges. gmi is not subject to any
restrictions on disposal in relation to these items.
Excepted are reservations of title or other security
rights in accordance with normal business practice.
Schedule 3.2(10), which is attached to this
Agreement, contains a complete and correct list of
all assets which are subject to reservations of title
or other security rights.
All objects in the asset side of the attached gmi
Financial Statement and used by it in its CRO
Business are in an operational state.
(11) Each contract, agreement, commitment or understanding
to which gmi is a party that is material to gmi's CRO
Business or that involves the payment by, or to, gmi
is more than DM 20,000 in any twelve (12) months
period (collectively, the "Material Contracts") is
listed on Schedule 3.2(11) which is attached to this
12
- 12 -
Agreement. gmi has not received notice of default
with respect to and gmi is not in default under any
of the Material Contracts. Copies of all contracts
with clients of gmi for the planning, implementation
and evaluation of clinical research initialed by
Sellers have been handed over to Xxxxxx GmbH which
acknowledged receipt. The contracts contain no
unusual obligations for gmi that could result in a
material loss under such contract.
(12) As of the date of this Agreement and of the Closing
Date gmi has not entered into any agreements,
undertakings or commitments which would in any
material way prevent or restrict the CRO Business in
continuing or further developing its business
currently conducted in Germany or any other country
where gmi has conducted its CRO Business during the
last two (2) years or would legally prevent or
restrict its ability to compete with other companies.
(13) Unless otherwise listed in Schedule 3.2(13), which is
attached to this Agreement, no lawsuits with a value
of DM 20,000 or more, administrative proceedings or
investigations against gmi and/or representatives
and/or employees of gmi, the latter two only with
respect to the business of gmi, and/or gmi's CRO
Business has been initiated, notified, or to the best
knowledge of Sellers threatened to, gmi or gmi's CRO
Business, nor are any material circumstances known
that would make the initiation of any such lawsuits,
administrative proceedings or investigations appear
likely to occur.
(14) None of the information concerning gmi, gmi's CRO
Business or the Sellers that gmi or the Sellers would
supply Xxxxxx Inc. for use in Xxxxxx Inc.'s
Registration Statement will contain any untrue
statement of a material fact or, to the best of
Sellers' knowledge and belief after due
investigation, omit to state a material fact
necessary in order to make the statements made
therein, in light of the circumstances under which
they will be made, not misleading.
(15) Schedule 3.2(15), which is attached to this
Agreement, contains a complete and accurate list of
the following information for each employee or
director of gmi, including each employee on leave of
absence or layoff status: name; job title;
professional qualifications; permits held; current
compensation paid or payable and any change
13
- 13 -
in compensation since January 1, 1996; vacation
accrued; and service credited for purposes of
eligibility and vesting under any social insurance or
employee benefit plan or under any employment
contracts for the gmi's employees initialed by
Sellers have been handed over to Xxxxxx GmbH which
has acknowledged the receipt.
(16) As of the date of this Agreement and of the Closing
Date gmi does not have any real property rights or
similar rights.
(17) Notwithstanding any other guarantees of Sellers, to
the best of Sellers' knowledge and belief after due
investigation, no guarantee of Sellers in this
Agreement and no statement in any Schedule or Exhibit
hereto omits to state a material fact necessary to
make the statements herein or therein, in light of
the circumstances in which they were made, not
misleading. None of the Sellers knows of any
information which is, or which may reasonably be
regarded as, material to an accurate appraisal of the
CRO Business, assets, liabilities and affairs of gmi
and which has not been disclosed to Xxxxxx GmbH.
(18) As of the date of this Agreement and of the Closing
Date none of gmi's contracts with third parties
contains any change of control provisions
(Kundigungsrecht oder auflosende Bedingung bei
Wechsel des Mehrheitsgesellschafters) which could
trigger a termination of the respective contract in
consequence of the signing of this Agreement and/or
the transactions contemplated by this Agreement.
(19) Complete and correct copies of all insurance
contracts of gmi initialed by Sellers have been
handed over to Xxxxxx GmbH which has acknowledged the
receipt.
(20) Schedule 3.2(20), which is attached to this
Agreement, contains a complete and correct list of
all bank accounts of gmi and all of persons
authorized to sign.
(21) Schedule 3.2(21), which is attached to this
Agreement, contains a complete and correct list of
all powers of attorney issued by gmi.
(22) Sellers will use best reasonable efforts to cause gmi
to obtain, without undue delay, risk life insurance
for DM ten (10) million
14
- 14 -
each on the lives of Xxx. Xxxx Xxx and Xxxxxx Xxxxx,
beneficiary being gmi. The rates have to be agreed
upon with Xxxxxx GmbH.
3.3 No Representation, Warranties and/or Guarantees Other than as
Contained in Agreement
No representation, warranties and/or guarantees, express or
implied, statutory or otherwise, made by the Sellers or their professional
advisers on their behalf to Xxxxxx GmbH in connection with, or arising out of,
the acquisition of the gmi Shares and which are not contained in this Agreement,
shall give rise to any liability on the part of the Sellers and Xxxxxx GmbH
acknowledges that they have not entered into this Agreement in reliance upon any
guarantee or promise other than those in this Agreement.
ARTICLE 4
GUARANTEES OF XXXXXX GMBH
4.1 Guarantees
As an inducement to the Sellers and recognizing the Sellers'
reliance thereupon, Xxxxxx GmbH guarantees in the form of an inidependent
guarantee ("Garantieversprechen") to the Sellers that:
(1) Xxxxxx Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Ohio, U.S.A. Xxxxxx Inc. has full power and
authority to own its assets and to carry on its
contract research organization business as now being
conducted. Xxxxxx Inc. is duly qualified or licensed
to do business as a foreign corporation in all
jurisdictions in which the present conduct of its
business requires such qualification or licensing.
Xxxxxx Inc. changed during 1997 its name from Xxxxxx
Research Associates, Inc. to Xxxxxx International Inc.
(2) Xxxxxx GmbH is a corporation duly organized, validly
existing and in good standing under the laws of
Germany.
(3) The copy of the Articles of Incorporation and
Regulations of Xxxxxx Inc. as currently in effect,
previously delivered to the Sellers, is complete and
correct.
(4) Xxxxxx Inc. has delivered to the Sellers audited
balance sheets of Xxxxxx Inc. as at December 31 in
each of the years 1994, 1995 and 1996 and the
15
- 15 -
related statements of income, changes in stockholders'
equity and cash flow for each of the fiscal years then
ended, together with a report thereon of Coopers &
Xxxxxxx, independent certified public accountants,
including in each case the notes thereto
(collectively, the "Xxxxxx Inc. Financial
Statements"). The Xxxxxx Inc. Financial Statements
fairly present in all material respects the financial
condition, results of operations, changes in
stockholders' equity and cash flow of Xxxxxx Inc. as
at the respective dates of and for the periods
referred to in such Xxxxxx Inc. Financial Statements,
all in accordance with United States Generally
Accepted Accounting Principles ("GAAP").
(5) To the best of Xxxxxx GmbH's knowledge and belief
after due investigation except as set forth in
Schedule 4.1(5), which is attached to this Agreement,
Xxxxxx Inc. has no liabilities or obligations of any
nature (whether absolute, accrued, contingent or
otherwise) except for liabilities reflected or
reserved against in the Xxxxxx Inc. Financial
Statements and current liabilities incurred in the
ordinary course of Xxxxxx Inc.'s business since
December 31, 1996. Xxxxxx Inc. is in good financial
standing.
(6) Xxxxxx Inc. has duly filed all required tax returns
and paid all material taxes due and payable with
respect to Xxxxxx Inc., both with respect to its
contract research organization business and otherwise.
(7) Unless otherwise listed in Schedule 4.1(7), which is
attached to this Agreement, no lawsuits with a value
of Thirty Five Thousand Dollars ($35,000) or more,
administrative proceedings or investigations against
Xxxxxx Inc. or its business have been initiated,
notified or to the best knowledge of Xxxxxx Inc.
threatened to Xxxxxx Inc. or Xxxxxx Inc.'s business,
nor are any material circumstances known to Xxxxxx
Inc.'s management that would make the initiation of
any such lawsuits, administrative proceedings or
investigations appear likely to occur.
(8) To the best of Xxxxxx GmbH's knowledge and belief
after due investigation, since December 31, 1996 there
has not been any material adverse change in the
business, operations, properties, prospects, assets or
condition, financial or otherwise, of Xxxxxx Inc., and
no event has occurred or circumstance exists that may
result in such a material adverse change.
16
- 16 -
(9) The execution, delivery and performance of this
Agreement by Xxxxxx GmbH has been authorized by all
necessary corporate action. This Agreement constitutes
the legal, valid and binding obligation of Xxxxxx
GmbH, enforceable against Xxxxxx GmbH in accordance
with its terms. Xxxxxx GmbH has the absolute and
unrestricted right, power, authority and capacity to
execute and deliver this Agreement and the other
documents to be delivered by Xxxxxx GmbH hereunder and
to perform the obligations under this Agreement and
such other documents.
(10) The authorized equity securities of Xxxxxx Inc.
consist of two hundred thousand (200,000) shares of
common stock, no par value per share, of which one
hundred thousand (100,000) shares are issued and
outstanding as of the date of this Agreement. The
shares and issued shares will be increased as a result
of the IPO. All of the outstanding equity securities
of Xxxxxx Inc. have been duly authorized and validly
issued and are fully paid and non-assessable. When
issued to the Sellers pursuant to this Agreement, the
Xxxxxx Shares included in the Purchase Price will be
duly authorized, validly issued and fully paid and
non-assessable shares of Xxxxxx Inc.'s common stock
free and clear of any and all liens, hypothecations
and encumbrances of any kind other than the Permitted
Restrictions.
(11) No guarantee of Xxxxxx GmbH in this Agreement and no
statement in any Schedule or Exhibit hereto contains
an untrue statement of a material fact or omits to
state a material fact necessary to make the statements
herein or therein, in light of the circumstances in
which they were made, not misleading. Xxxxxx GmbH does
not know of any information which is, or which may
reasonably be regarded as, material to an accurate
appraisal of the business, assets, liabilities and
affairs of Xxxxxx GmbH and Xxxxxx Inc. and Xxxxxx Inc.
and which has not been disclosed to Sellers.
(12) None of Xxxxxx GmbH or Xxxxxx Inc. are in default
under, or have received notice of default with respect
to any contract, agreement, commitment or
understanding to which any of the Xxxxxx GmbH or
Xxxxxx Inc. is a party that is material to the
business of Xxxxxx GmbH or Xxxxxx Inc. or that
involves the payment by, or to, that Xxxxxx GmbH or
Xxxxxx Inc. of more than DM 20,000 (or the U.S.
currency equivalent) in any twelve (12) month period.
17
- 17 -
4.2 No Representation, Warranties and/or Guarantees Other than as
Contained in Agreement
No representation, warranties and/or guarantees, express or
implied, statutory or otherwise, made by Xxxxxx GmbH or their professional
advisers on their behalf to the Sellers in connection with, or arising out of,
the acquisition of the gmi Shares and which are not contained in this Agreement,
shall give rise to any liability on the part of Xxxxxx GmbH and the Sellers
acknowledge that they have not entered into this Agreement in reliance upon any
guarantees or promises other than those in this Agreement.
ARTICLE 5
OPERATION OF BUSINESS
5.1 Preservation of gmi's Business and Assets
Sellers shall use their best efforts to cause gmi to operate
its CRO Business strictly in the ordinary course and as previously conducted,
shall use their best efforts to cause gmi to keep available to Xxxxxx the
services of gmi's present key employees and shall use their reasonable best
efforts to cause gmi to preserve for Xxxxxx GmbH the goodwill of gmi's
suppliers, customers and others having business relations with gmi.
5.2 Transactions Subject to Consent
Between the execution of this Agreement and the Closing Date
the Sellers shall cause gmi to undertake the following transactions only upon
the prior consent of Xxxxxx GmbH:
(1) purchase, disposal and mortgaging of real property
and rights equivalent to real property;
(2) formation of branch offices;
(3) taking out loans over and above normal operations of
gmi;
(4) granting or accepting loans over and above normal
operations of gmi;
(5) providing collateral for any third party, including,
but not limited to, sureties and warranties over and
above normal operations of gmi;
(6) granting and withdrawing powers of commercial
representation or agency provided, however, that
Sellers may appoint Xxxxxx Xxxxx as Managing Director
without obtaining prior consent;
18
- 18 -
(7) declaring or paying any dividends or other
distributions for the financial year 1997 to Sellers
or purchasing or redeeming any of its shares of
capital stock. Dividends for the financial year 1996
have been declared and a signed copy of the
respective shareholders resolution has been handed
over to Xxxxxx GmbH which has acknowledged the
receipt.
(8) making any expenditure for, or incurring any
obligations in respect of fixed assets, fixtures and
other items provided that the expenditure or
obligation is in excess of DM 20,000 on any
individual item;
(9) entering into any employment or consulting agreement
with an annual salary of more than DM 100,000. Per
the request of Xxxxxx GmbH, gmi has entered as of the
date of this Agreement into employment contracts with
Xxxxxx Xxxxx and Xxxx NeiB and into a consultancy
contract with Xxxxxxxx NeiB. Initialed copies of
these contracts have been handed over to Xxxxxx GmbH
which has acknowledged the receipt;
(10) entering into licensing or selling agreements on any
inventions, know-how or other intellectual property
in excess of DM 10,000 on any individual item;
(11) paying and/or agreeing on any bonus.
5.3 Notification
Between the date of this Agreement and the Closing Date, each
Seller will promptly notify Xxxxxx GmbH in writing if such Seller or gmi becomes
aware of any material adverse change of gmi's CRO Business. Sellers shall cause
gmi to provide representatives of Xxxxxx full access to all offices, books,
records, files, agreements and computer databases and information pertaining to
gmi's CRO Business, its assets and liabilities.
5.4 Preservation of Xxxxxx Inc.'s Business and Assets
Xxxxxx GmbH guarantees that Xxxxxx Inc. shall use its
reasonable best efforts to operate its CRO Business strictly in the ordinary
course and as previously conducted (including the right to finance and make
acquisitions), shall use its reasonable best efforts to keep available the
services of the Xxxxxx Inc.'s present key employees and shall use its reasonable
best efforts to preserve the goodwill of suppliers, customers and others having
business relations with Xxxxxx Inc.
19
- 19 -
ARTICLE 6
LIABILITY
6.1 Liability
Unless stipulated otherwise in this Agreement, in the event of
a breach of representations, warranties and/or guarantees under this Agreement,
the breaching party shall put the other party into the position the other party
would have been in if such representations, warranties and/or guarantees had not
been breached. If it is not possible to do this within four weeks after the
breaching party has received such request from the other party, the other party
and/or - if the breaching party are the Sellers - gmi can request full pecuniary
compensation from the breaching party, in particular, all claims, demands,
losses, costs, expenses, obligations, liabilities, actions, suits, damages,
including, without limitation, interests and penalties, counsel fees, but
excluding any consequential and/or indirect damages (Folgeschaden). Any further
statutory remedies, including, but not limited to, cancellation of contract
(Wandelung, Rucktritt) and diminution of the purchase price (Minderung), are
excluded to the extent possible under statutory law. This limitation shall not
be applicable in case of defects of title (Rechtsmangel) of the gmi Shares.
Claims shall be excluded if such claims are not raised until
September 30, 1998; provided that in respect of the representations regarding
taxes the expiry date shall not be until 6 months after the assessment by the
respective governmental authority has become final and binding. Sellers shall be
given the opportunity at their own cost to take part in an external tax audit
and to file an appeal against tax demands with which they are charged or to
demand the filing of such an appeal.
The aforementioned expiry dates are deadlines
(AusschluBfristen) within which the party making a claim must have sent a
written notification of the claims explaining the grounds herefor in reasonable
detail.
6.2 Liability Limitation
With the exception of the obligation under section 3.2(5)
above, no party hereto shall have an obligation towards the others under a
warranty or related statutory claim unless and until the aggregate amount of
such claims against such party exceeds DM 100,000 or the equivalent in any other
currency, and if so, then the whole amount shall be payable to the other party.
20
- 20 -
No Seller shall be liable to Xxxxxx GmbH under any provision
of this Agreement or a related statutory provision for an amount in excess of
that portion of the purchase price actually received by that Seller.
These limitations are not applicable in case of liability
arising form the defects of title ("Rechtsmangel) of the sold gmi Shares.
6.3 Constructive Knowledge
To the extent that any representations, warranties and/or
guarantees depend on whether or not Sellers knew or should have known certain
facts or circumstances, any knowledge or negligent ignorance of certain facts or
circumstances by gmi's managing director Xxxx NeiB will be attributable (wird
zugerechnet) to Sellers.
ARTICLE 7
RESTRICTIONS ON TRANSFER
7.1 Restrictions
(1) Each Seller agrees that such Seller shall not sell,
transfer, pledge or otherwise dispose of such
Seller's interests in the Xxxxxx Stock included in
the Purchase Price issued to such Seller for a period
up to one hundred eighty (180) days after the
completion of Xxxxxx Inc.'s IPO, but in no event for
any longer than any of the current management,
directors or other significant shareholders of Xxxxxx
Inc. are under a similar restriction.
(2) Xxxxxx Inc. shall not be bound by any attempted
transfer, sale or other disposition in violation of
any of the restrictions set forth herein, and Xxxxxx
Inc. shall be entitled to deliver to Xxxxxx Inc.'s
transfer agent an appropriate stop transfer order in
connection therewith, pursuant to which such transfer
agent shall refrain from registering any such
attempted transfer, sale or disposition.
7.2 Certificate Legends
Each Seller agrees that the certificates representing any
share of Xxxxxx Stock included in the Purchase Price issued to Sellers shall
bear legends in substantially the following forms:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED
21
- 21 -
UNDER ANY FEDERAL OR STATE SECURITIES LAWS AND HAVE
BEEN ISSUED UNDER EXEMPTIONS THAT DEPEND IN PART ON
THE INTENT OF THE HOLDER HEREOF NOT TO SELL OR
TRANSFER SUCH SHARES IN ANY MANNER WHATSOEVER NOT
PERMITTED BY SUCH LAW. THESE SHARES MAY NOT BE SOLD
OR TRANSFERRED EXCEPT UPON REGISTRATION UNDER ALL
APPLICABLE FEDERAL OR STATE SECURITIES LAWS OF THE
UNITED STATES OF AMERICA OR PURSUANT TO AN EXEMPTION
THEREFROM. THE HOLDER OF THIS CERTIFICATE
ACKNOWLEDGES THAT STOP TRANSFER INSTRUCTIONS TO THIS
EFFECT HAVE BEEN PLACED WITH THE TRANSFER AGENT.
The above legends will be removed at the request of
the relevant holder of the Xxxxxx Shares included in
the Purchase Price at the expiration of the
applicable restricted periods set forth in the said
legends.
ARTICLE 8
NON-COMPETE UNDERTAKING
Until June 30, 1999, Sellers shall neither directly nor
indirectly develop, market, sell, purchase or otherwise deal with any such
products or services that compete with gmi in Germany in the contract research
organization business. Within this purview and until June 30, 1999, Sellers
shall not solicit any employees or clients of gmi without the prior written
consent of Xxxxxx Inc. Notwithstanding the aforementioned, Xxxxxxxx NeiB shall
have the right to take part in any activities and/or projects of the Technical
University of Munich and also to be a member of steering committees and other
activities, insofar as they are consistent with prior activities.
22
- 22 -
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 Further Assistance
Each party agrees to make all reasonable efforts to cooperate
with the other in post-Closing matters that may arise in regard to taxes and the
like and to provide gmi with the benefits of all contracts or permits which may
be affected by the change of control of gmi.
Sellers shall use its best efforts to assist and to cause
gmi's independent tax advisers to assist and to cause gmi's independent tax
advisers to assist Xxxxxx Inc. in preparation of such audited financial
statements for gmi as are necessary to enable Xxxxxx Inc. to comply with the
accounting and/or reporting requirements promulgated under the Securities Act
and Securities and Exchange Act of 1934, as amended, in the United States.
Xxxxxx Inc. shall be responsible and pay for all fees to gmi's independent tax
advisers for such assistance.
9.2 Notices
All notices made pursuant to this Agreement shall be valid
only if made by a person authorized to receive notices as per below by Xxxxxx
GmbH or the Sellers, as the case may be, and sent by registered mail, return
receipt requested or facsimile, to the parties at the addresses set forth below,
or as set forth in any notice of change of address given in writing in the
manner prescribed herein to all other parties.
If to Xxxxxx GmbH: XXXXXX INTERNATIONAL, INC.
000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: x0(000)000-0000
with a required copy to: XXXXXXX, XXXXXXXX & XXXXXXX, P.L.L.
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
Fax: x0(000)000-0000
23
- 23 -
If to Xxxxxx Xxxxx: Xxx-xxx-Xxxxx-XxxxXx00
X-00000 Xxxxxx
Xxxxxxx
Fax: x00(00)0000-000
If to Xxxxxxxx NeiB: Xxxxxx-Xxxx-Xxxxxxx 0
X-00000 Xxxxxxxx
Xxxxxxx
Fax: x00(00)000-0000
9.3 Choice of Law, Venue
This Agreement shall be governed by and construed in
accordance with the substantive laws of Germany. The exclusive legal venue for
all disputes in connection with this Agreement in Munich/
9.4 Assignment
This Agreement may not be assigned by any party without the
prior written consent of the other party. Notwithstanding the aforementioned,
Xxxxxx GmbH shall have the right to transfer all or parts of its rights -
including the right to receive the gmi Shares pursuant to Article 1 of this
Agreement - and obligations under this Agreement and to transfer the Agreement
in its totality (Vertragsubernahme) to a third party, which has to be a
subsidiary of Xxxxxx GmbH and/or Xxxxxx Inc. The Sellers hereby irrevocably
consent in advance to such transfer including a transfer of the Agreement
(Vertragsubernahme). If necessary, Sellers shall cause gmi to give its consent
to such transfer of rights and/or split of shares. Any costs of such an
agreement including any notarization costs shall not be borne by Sellers.
9.5 Waiver
No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or be construed as a further or continuing waiver of any such
term, provision or condition or as a waiver of any other terms, provisions or
conditions of this Agreement.
9.6 Severability
The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not invalidate or render unenforceable any
other provision herein. Any invalid or unenforceable provision shall be replaced
by such reasonable provision as comes closest to what the parties wanted or
would have wanted to apply in accordance with the meaning and
24
- 24 -
purpose of this Agreement if they had considered such invalidity or
unenforceability when entering into this transaction. The same shall apply
correspondingly to the filling of any gaps.
9.7 Announcements
Xxxxxx GmbH and Sellers shall cooperate in the preparation of
any announcements regarding the transaction contemplated by this Agreement.
Except as required by applicable law (in which case such announcing party shall
prior thereto advise the other party), no party shall issue any announcement
regarding the transactions contemplated hereby without the prior consent of the
other, which consent shall not be unreasonably withheld.
9.8 Entire Agreement
This Agreement (including all attachments) constitutes the
entire understanding between the parties with respect to the subject matter
hereof, supersede all negotiations, prior discussions and preliminary
agreements. Neither party gives any warranty or accepts any liability in
addition to those expressly stated in this Agreement. Amendments and additions
to this Agreement are required to be in written form, to the extent no notarial
form is prescribed by statute. The requirement for written form can be lifted
only by written agreement of all the parties. The headings of this Agreement are
not a part of this Agreement but are for convenience purposes only.
9.9 Copies
Each party hereto and gmi shall receive certified copies (1
begl. Abschrift, 1 Ausfertigung) of this Deed. One certified copy shall be sent
to Finanzamt-Korperschaftsteuerstelle.
9.10 Attachments
All exhibits and Schedules are essential parts of this
document. They are referred to.
25
- 25 -
The notarization was started on 01 July, 1997 and was completed after midnight
on 02 July 1997.
This document was read aloud including the schedules and exhibits by the notary,
approved by the parties present and signed by than the notary.
/S/ Xx. Xxxxxx Xxxxxxxxx Xxxxx, nee Xxxxx
------------------------------------------
/S/ Prof. Dr. Xx. Xxxxxxxx N e i B
-----------------------------------
/S/ Xx. Xxxxxxx X. Xxxxxx
-------------------------
