PURCHASE OF BUSINESS ASSETS
between
Xx. Xxxxx Xxxxxxxxx
(hereinafter also "Seller")
and
Institute for Pharmcodynamic Research Phoenix International GmbH i.G.
(hereinafter also "Buyer")
relating to a clinical research business
-----
PRELIMINARY REMARKS
(1) The Seller is the owner of a business activity and the related assets for
clinical research and testing of medicines, hereinafter "Assets.@
(2) The Seller intends to sell these Assets to the Buyer, a limited liability
company in foundation with its seat in Munich, represented by its managing
director with sole power of representation. A copy of the notarial deed of
the foundation of the company is attached to this Agreement as ANNEX TO
PARA. (2) OF THE PRELIMINARY REMARKS. The Buyer intends to purchase the
Assets.
(3) With this in mind, the Seller and the Buyer enter into the following
AGREEMENT FOR THE SALE OF BUSINESS ASSETS
Section
OBJECTIVE OF THE AGREEMENT, CURRENT AGREEMENTS,
LABOR RELATIONS
(1) The Seller sells to the Buyer the Assets used for the business activity
under the name INSTITU FIR PHARMAKADYNAMISCHE FORSCHUNG - XX. XXXXX
XXXXXXXXX in Munich. The Seller sells the Assets as listed in ANNEX TO
SECTION 1 PARA. (1) whether or not reflected in the balance sheet of the
business activity. This includes in particular but is not limited to rights
to further benefits, guarantees, intellectual property rights, licenses,
permits, designs, processes, formulas, drawings, draftings, samples, books
and business documents as well as written or in any other way collected and
stored information of any kind.
(2) The Buyer shall become a party to the following agreements on the Takeover
Date:
1) insurance agreements
2) agreements for the supply of utilities and disposal services (water,
gas, electricity, heating, waste disposal, sewage, etc.).
3) rental agreement regarding the premises in Munich (including the
deposit)
4) project contracts, especially the BERLIN CHEMIE Project, the OLD
XXXXXX Project and the NEW XXXXXX Project Cost and proceeds of these
three projects are allocated with the parties as stipulated in ANNEX
TO SECTION I PARA. (2)(d).
(3) The Buyer shall not enter into any other contractual agreements or assume
any liability (including tax liability, whether or not relevant to the sold
Assets) from the Seller.
(4) The Buyer shall continue to employ Xx. Xxxxx. The Buyer enters into the
service agreement with Xx. Xxxxx with all rights and obligations arising
there from. The service agreement is attached as ANNEX TO SECTION L PARA.
(4).
Section 2
PURCHASE PRICE
(5) The purchase price for the Assets shall be DM 420.000,--.
(6) The Buyer disbursed the amount of DM 400.000,-- to the Seller on the basis
of a loan agreement dated January 9, 1998. The purchase price shall be set
off against this amount, consequently, the Buyer owes a payments of DM
20.000,--
(7) Payment is due on the date of Handover of Possession.
Section 3
TAKEOVER DATE, INCOME
Takeover Date is April 01, 1998, 0:00. From this day on the business
activity sold shall be run on account of the Buyer.
Section 4
CONTINUANCE OF BUSINESS, MANAGEMENT
(8) The Buyer and, should occasion wise, his legal successor are entitled, but
not required, to continue to use the business name of the Seller with or
without the use of supplementary names or to partially use the business
name, regardless of the business form. Seller and Buyer are required to
cooperate in the renaming of the Buyer. (9) The Seller will act as the
managing director for the Buyer for at least 3 years upon execution of this
Agreement, based on the managing director employment agreement contained in
ANNEX TO SECTION 4 PARA. (2). If the managing director resigns without the
Buyer having given good cause (WICHUGER XXXXX), or if the managing director
is terminated because of the presence of good cause, then the purchase
price shall be reduced by DM 100.000,--.
Section 5
REPRESENTATIONS AND WARRANTIES
(10) The Seller makes on the Takeover Date and at the moment of the handover
of possession (Section 10) in so far as not otherwise provided for in
this Agreement the following representations and warranties in the form
of an independent warranty agreement
1) Financial Position
1. The Seller's annual financial statements given to the Buyer for
the fiscal years 1996 end 1997 comply with statutory provisions
and proper accounting principles, and accurately state the
capital, financial and earnings situation of the business
activity.
2. The Buyer has been completely and comprehensively informed -
verbally or in writing- to the best of the Sellers knowledge of
all facts known to the Seller, which are not insignificant for
the evaluation of the current and future capital, financial and
profit situation of the business activity. The information and
documents provided are correct in so far as they contain most
recent personal declarations of the Seller.
3. The sold Assets, are the property of the Seller and are not
subject to any third party rights. They encompass all economic
assets, which shall be used in or are necessary for the business
activity.
4. The receivables stated in the balance sheet exist, are not
subject to defenses and no greater losses have occurred than the
amount of allowances in the balance sheet.
5. The sale of the Assets shall not make the Buyer liable for third
party liabilities, in particular on the basis of negotiable
instruments, guarantees, and letters of comfort.
6. The fixed assets (ANLAGEVERMOGEN) are in a proper condition and
all necessary repairs and the procurement of replacements have
been undertaken.
7. The quality and quantity of the inventory is reasonably in accord
with business principles. The inventory is in good condition and
is salable in the ordinary course of business.
8. ANNEX TO SECTION 5 PARA (1) a) 8. contains a complete list of the
most recent completed field tax audit (as of 1994) concerning the
business activities for every type of tax rating the time of the
issuance of the respective notice of tax assessment or pending
proceeding
1) Employment and Service Relationships
1. ANNEX TO SECTION 5 PARA (1) b) 1. contains a Complete list
of all commercial agents and consultants of the sold
business activity on the Takeover Date, including name,
field of activity, date of first employment, termination
notice periods, annual remuneration in the calendar year
1997, including all fringe payments.
2. Since 1996 there have been no increases or promises of
increase of payments (salary, pension, profit-sharing
bonus, bonuses, commission, other payments) to employees,
consultants, commercial agents or other persons rendering
services. No modifications of such agreements (duration,
notice periods, etc.) occurred since.
3. If Xx. Xxxxx objects to the takeover by the Buyer or
employment was terminated on the Takeover Date, the Seller
shall bear all claims to current compensation and
settlements.
1) Period between the Takeover Date and the Handover of Possession
(Section 10) (Transition Period)
1. The business activity has been conducted in accordance with
the principles of reasonable and conscientious business
management during the Transition Period. In particular, the
prices agreed upon for deliveries and services have been
calculated so as not to incur losses and so as to receive
equal and valuable consideration for all obligations
incurred.
2. During the Transition Period none of the fixed assets of the
sold business activity have been sold or otherwise disposed
of, except for those listed in the ANNEX TO SECTION 5 PARA.
(1) c) 2.
3. During the Transition Period no extraordinary transactions
have been conducted nor extraordinary measures taken.
1) Miscellaneous
1. There have never been, nor are there currently pending, any
product or medical liability claims against the Seller in
connection with the business activity. 1.
2. All know-how and intellectual property rights included in
the sale are permanently at the disposal of the Buyer with
full legal title, and no payments or performances in respect
of those rights are due to third parties.
3. The Seller is not in substantial violation of any statutory
provisions, and in particular, the Seller has fulfilled all
of his tax- and social security-law obligations. The Seller
is not infringing on the contractual rights of third parties
and has not assumed any contractual liabilities through his
business operations, and especially, the Seller has not
defaulted on his delivery, performance or payment
obligations.
4. The business activity complies with current and, to the best
of the Seller's knowledge, future public administrative law
(OFFENTLICHRECHTLICH) statutory provisions as well as with
labor law provisions.
5. The fundamental operational bases of the sold business
activity (e.g., concessions, operational permits, waste
disposal agreements, rental and leasing (Xxxxx- und
Leasing-), license, cooperation, credit, supply agreements)
are not terminated, limited or impeded by the conclusion of
this Agreement.
6. The sold business activity has sufficient insurance
coverage. The ANNEX TO SECTION 5 PARA (1) d) 6. contains a
complete list of all insurance Policies, stating the insured
risks, the remaining term, and the yearly premium.
7. ANNEX TO SECTION 1 PARA. (1) contains a complete list of all
assumed agreements. The agreements we effective, have been
performed by the parties in accord with the agreement until
now and shall remain effective prospectively as long as the
parties continue to perform in accord with the agreement.
They are the only agreements necessary to carry out the
business activity in the ordinary course. The parties to the
agreement shall consent to the entry of the Buyer in the
assumed agreements with, the previous conditions with the
exception of those specially identified agreements in ANNEX
TO SECTION 5 PARA. (1) d) 7.
8. Except for those legal proceedings listed in ANNEX TO
SECTION 5 PARA. (1) a) 8., there neither exist nor are
threatened any lawsuits, legal remedies or other
proceedings.
9. The acquisition of the Assets by the Buyer does not
constitute an acquisition of assets within the meaning of
Section 419 German Civil Code (BGD) or a transaction within
the meaning of Section 1365 BGD.
10. The sold Assets are technically without fault and will not
give raise to any claims, in particular as regards technical
issues in connection with the turn of the century.
1) The statutory warranty against defects of quality and title with regard to
the Assets shall apply in addition.
2) If the representations and warranties of the Seller are dependent on the
knowledge and awareness of certain facts or circumstances, such knowledge
awareness shall be attributed to the Seller also in case of facts and
circumstances of which the Seller would have been aware had the Seller
exercised due care.
Section 6
CONSEQUENCES OF BREACH OF REPRESENTATIONS AND/OR WARRANTIES
1) Any noncompliance with a representation and/or warranty under '5 shall
commit the Seller to the payment of compensatory damages only. The measure
of said damages shall be that amount which would have to be paid in order
to place the Buyer in the same position as if the representation and/or
warranty had been fulfilled.
2) Claims to compensation for damages shall bear interest of 3% over the
discount rate of the BUNDESBANK (Contractual Interest Rate) calculated from
the time of loss, or at the earliest, from the Takeover Date.
3) If damage has not yet been incurred, the Buyer may demand that the Seller
indemnify the Buyer.
4) All claims to compensation for damages shall lapse if they are not raised
in writing within two years of the Takeover Date stating the bases for the
claims against the Seller. Timely made claims are barred after three years
from the Takeover Date.
5) If the Seller has Fraudulently concealed material defects of the Assets or,
if the liability of the Seller is based on such material deviations from
the above representations and/or warranties that the Buyer can no longer be
reasonably expected to comply with this Agreement, then the Buyer is
entitled, notwithstanding para. (1), to rescission of this Agreement in
addition to the enforcement of claims to compensation for damages.
Rescission shall be precluded if not exercised within six months of the
execution of this agreement.
Section 7
TAXES AND COSTS
1) Taxes payable by the Seller on any profit incurred incident to this
Agreement shall be borne by the Seller.
2) The costs of this Agreement and its execution shall be borne by the Buyer.
The Buyer and Seller shall each bear the costs of their own consultants.
Section 8
NON-COMPETITION CLAUSE
1) The Seller shall in no way undertake the operation of or participate in or
serve as an employee or independent contractor in any manner with an
enterprise which competes with the business activity for a period of five
years from the Takeover Date. This non-competition clause shall not be
valid if the competition does not take effect in Germany. This
non-competition clause shall not be effective in respect of the acquisition
of ownership interests listed on a stock exchange in up to 5% of the stated
capital (GRUNDKAPITAL).
2) For every breach by the Seller of the non-competition clause, liquidated
contractual damages (VERTRAGSSTRAFE) in the amount of DM 50,000,-- shall be
paid to the Buyer. In
the case of a continuous violation, a separate violation shall be deemed to
have occurred at the beginning of each calendar month. The Buyer shall not
be barred from asserting higher damages. However, the amount of any
liquidated contractual damages paid shall be subtracted from any actual
damages.
Section 9
PERFORMANCE PROVISIONS
1) The transfer of fixed assets and any other matter concerning the
performance of this Agreement shall be governed by the following:
1) The parties to the Agreement are in agreement concerning the transfer
of ownership in movables at the time of the execution of this
Agreement. If any sold movables, are not in the possession of the
Seller, transfer shall be effected by the assignment of claims to
possession against the immediate holder of the movables by the Seller
to the Buyer.
2) The sold claims are hereby assigned to the Buyer. The Buyer is
entitled to notify the debtors of the transfer directly and, so far as
necessary, to obtain their consents to the assignments.
3) The sold rights, licenses and permits are hereby assigned to the
Buyer. If the assignment requires any further measures (entry into a
register, notification of public authorities, etc.) to be legally
binding or effective, the Seller will undertake all necessary steps to
bring about the transfer.
4) In as far as non-transferable objects are included in the sale, the
Seller is obligated to put the Buyer into a position as if the objects
had been effectively transferred.
5) The Seller shall obtain the consent of third parties to the entry of
the Buyer into running contracts in so far as the Buyer receives the
economic benefit of the contracts.
6) Insofar as a change in the inventory in the Assets occurs between the
Takeover Date and the transfer, the changed inventory is controlling
for the transfer. A current inventory, including the significant items
of property hereby being transferred, is attached as ANNEX TO SECTION
9 PARA. (2).
Section 10
HANDOVER OF POSSESSION
The handover of possession of the Assets shall take place on the date of
closing.
Section 11
FINAL PROVISIONS
1) This Agreement shall be governed by the laws of Germany under the exclusion
of its principles of conflict of laws.
2) There are no collateral agreements to this Agreement.
3) Modifications and supplementations not requiring notarial authentication
require the written form (SCHRIFTFORM) in order to be effective.
4) The place of performance of the Agreement and the jurisdictional venue
shall be the seat of the Buyer, to the extent legally permitted.
5) The Seller and Buyer shall agree upon the time, manner and content of
external and internal publication of the sale of the Assets.
6) This Agreement replaces all previous agreements and statements of the
Seller and Buyer with regard to its subject matter.
7) The Parties to this Agreement shall take all actions necessary for the
seamless implementation of this sale of the Assets.
8) If individual provisions of this Agreement should be or become invalid, the
validity of the other provisions shall not be affected thereby. The invalid
provision shall be replaced by a valid provision which comes as close as
possible to the original economic intention of the invalid provision.
Munich, this 1st day of April 1998,
/s/ Xxxxx Xxxxxxxxx
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Xx. Xxxxx Xxxxxxxxx
Institute for Pharmacodynamic
Research Phoenix International GmbH i. G.
/s/ Xxxxx Xxxxxxxxx
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Xx. Xxxxx Xxxxxxxxx
I.T.E.M. S.A. being the founder and sole shareholder of Institute for
Pharmacodynamic Research Phoenix International GmbH i. G. herewith authorizes
Xx. Xxxxx Xxxxxxxxx, as the managing director of said GmbH i.G. to execute the
above agreement.
Munich, this 1st day of April 1998,
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
