Exhibit 2.1
SHARE AND DEBENTURE PURCHASE AGREEMENT
AMONG
PHOENIX INTERNATIONAL LIFE SCIENCES INC.
AND
ITEM HOLDING
AND
XXXXXX XXXXX
AND
XXXXXXXXX XXXXX
AND
XXXXXXXX XXXXXXX
AND
XXXXX XXXXXXX
AND
XX.XX.XX.
AND
BNP DEVELOPPEMENT
AND
SIPAREX DEVELOPPEMENT
AND
EPICEA
AND
NATIO FONDS VENTURE II
--------------------------
DATED AS OF AUGUST 7, 1997
--------------------------
SHARE AND DEBENTURE PURCHASE AGREEMENT dated as of August 7, 1997
AMONG: PHOENIX INTERNATIONAL LIFE SCIENCES INC., a
corporation incorporated under the Canada
Business Corporations Act, having its head
office at 0000, Xxxxx Xxxxxx, Xxxxx-Xxxxxxx,
Xxxxxx, Xxxxxx, X0X 0X0, herein acting and
represented by Xxxx X. Xxxxxx and Xxxx-Xxxx
Xxxxx, its duly authorized representatives;
(hereinafter "Phoenix")
AND: ITEM HOLDING S.A. a French SOCIETE ANONYME
with capital of FF15,737,100, registered in
the Paris commercial and companies register
under number B 389 402 801 and having its
head office at 00, Xxxxxx xx Xxxxxxxxxxxxx,
00000, Xx Kremlin-Bicetre, herein acting and
represented by Xxxxxx Xxxxx, its duly
authorized representative;
(hereinafter "ITEM Holding")
AND: XXXXXX XXXXX, executive, residing at 00, xxx
Xxxxxx xx Xxxxx, 00000, Xxxxx, married under
the matrimonial regime of COMMUNAUTE LEGALE
to Xxxxxxxxx Xxxxx;
(hereinafter "Xxxxxx Xxxxx")
AND: XXXXXXXXX XXXXX, executive, residing at 00,
xxx Xxxxxx xx Xxxxx, 00000, Xxxxx, married
under the matrimonial regime of COMMUNAUTE
LEGALE to Xxxxxx Xxxxx;
(hereinafter "Xxxxxxxxx Xxxxx")
AND: XXXXXXXX MARTINS, residing at rua do Arco
Carvalhao Xx. 00, 0xx xxx., 0000 Xxxxxx,
Xxxxxxxx, married under the matrimonial
regime of COMMUNAUTE LEGALE to Xxxxxxx
Xxxxxx ;
(hereinafter "Xxxxxxxx Martins")
AND: XXXXX XXXXXXX, executive, residing at 00,
Xxxxxx xx xx Xxxxx Xxxxx, 00000, Xx. Xxxxx,
married under the matrimonial regime of
COMMUNAUTE UNIVERSELLE to Xxxxxx Xxxxxx,
under a contract of marriage entered into
before Maitre Xxxxxxxx ;
(hereinafter "Xxxxx Xxxxxxx")
AND: XX.XX.XX., a Belgian corporation having its
head office at 216 avenue Xxxxxx Xxxxx,
Xxxxxxxxx 0000, Xxxxxxxx, herein acting and
represented by its duly authorized
representative, Xxxxxx Xxxxx;
(hereinafter "Codema")
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AND: BNP DEVELOPPEMENT, a French SOCIETE ANONYME,
with capital of FF500,000,000, registered in
the Paris commercial and companies register
under number B 348 540 592 and having its
head office at 0, xxxxxxxxx Xxxxxxxxx,
00000, Xxxxx, herein acting and represented
by its duly authorized representative,
Xxxxxxx Xxxxxxxxx;
(hereinafter "BNP Developpement")
AND: SIPAREX DEVELOPPEMENT, a French SOCIETE EN
COMMANDITE PAR ACTIONS, with capital of
FF196,489,400, registered in the Lyon
commercial and companies register under
number B 378 213 375 and having its head
office at 000, xxx xx xx Xxxxxx, 00000,
Xxxxx, herein acting and represented by its
duly authorized representative, Christian
d'Argoubet;
(hereinafter "Siparex Developpement")
AND: EPICEA, a French SOCIETE ANONYME, with
capital of FF67,000,000, registered in the
Paris commercial and companies register
under number B 319 308 615 and having its
head office at 00-00, xxx Xxxxxxxxxx, 00000,
Xxxxx, herein acting and represented by its
duly authorized representative, Xxxxxx
Xxxxxxxx;
(hereinafter "Epicea")
AND: NATIO FONDS VENTURE II, a French FONDS
COMMUN DE PLACEMENT A RISQUE, herein acting
and represented by its administrator BNP
Gestions, a French SOCIETE ANONYME, with
capital of FF 64,919,400, registered in the
Paris commercial and companies register
under number B 682 001 904 and having its
head office at 000, xxx xx Xxxxxxxx
Xxxxxxxxxxxx, 00000 Xxxxx Cedex 10, herein
acting and represented by its duly
authorized representative, Xxxxxxxxx
Xxxxxxxxx;
(hereinafter "Natio Fonds Venture")
(Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxxx, Xxxxx Porsolt, Codema, BNP
Developpement, Siparex Developpement, Epicea
and Natio Fonds Venture are hereinafter
collectively referred to as the "Vendors").
WHEREAS, the Vendors hold, directly or indirectly, as more fully set
out in Schedule A, all of the outstanding convertible debentures and all of the
outstanding shares and voting rights of ITEM Holding;
WHEREAS, Institut Technique pour l'Etude du Medicament ("ITEM SA"), a
French SOCIETE ANONYME, with capital of FF2,295,000, registered in the Creteil
commercial and companies register under number B 326 152 195 and having its head
office at 00, xxxxxx xx Xxxxxxxxxxxxx, 00000, Xx Xxxxxxx Xxxxxxx, Xxxxxx, is a
subsidiary of ITEM Holding, held as to 99.99% by ITEM Holding and as to 0.01% by
ITEM Labo. The capital structure of ITEM SA is set forth in Schedule B;
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WHEREAS, Institut Technique pour l'Etude du Medicament - Laboratoire de
Recherche ("ITEM Labo"), a French SOCIETE ANONYME, with capital of FF250,000,
registered in the Laval commercial and companies register under number B 329 968
465 and having its head office at Z.I. des Suhards au Xxxxxx Xxxxx Xxxx, 00000,
Xxxxx-Xxxxxxxxx, Xxxxxx, is a subsidiary of ITEM Holding controlled as to 99.8%
by ITEM Holding and as to 0.2% by ITEM SA. The capital structure of ITEM Labo is
set forth in Schedule C;
WHEREAS, S.C. VERUM I.T.E.M. Clinica SRL ("ITEM Clinica"), a Romanian
societate cu rasponderer limitata, having its head office at 44 bd I.C.
Bratianu, sc B, apt 00, xxxxxx 0, Xxxxxxxx, Xxxxxxx, is a subsidiary of ITEM SA,
controlled as to 100% by ITEM SA. The capital structure of ITEM Clinica is set
forth in Schedule D;
WHEREAS, VERUM I.T.E.M. Italia Srl ("ITEM Italia"), an Italian SOCIETE
A RESPONSABILITE LIMITEE, having its head office at Xxx Xxxxxxxxx 00, Xxxxx,
Xxxxx, is a subsidiary of ITEM SA, controlled as to 98% by ITEM SA and as to 2%
by Xxxxxx Xxxxx. The capital structure of ITEM Italia is set forth in Schedule
E;
WHEREAS, ITEM International ("ITEM International"), a French SOCIETE A
RESPONSABILITE LIMITEE, with capital of FF400,000, registered in the Laval
commercial and companies register under number B 329 439 996 and having its head
office at Z.I. des Suhards au Xxxxxx Xxxxx Xxxx, 00000, Xxxxx-Xxxxxxxxx, Xxxxxx,
is a subsidiary of ITEM SA controlled as to 100% by ITEM SA. The capital
structure of ITEM International is set forth in Schedule F;
WHEREAS, METI - Madrid, S.A. ("ITEM Spain"), a Spanish company, with
capital of Pesetas 12,000,000, having its head office at xxxxx Xxxxxxx Xxxx x.
00, 0xx xxxxx, Xxxxxx, Xxxxx, is a subsidiary of ITEM SA controlled as to 100%
by ITEM SA. The capital structure of ITEM Spain is set forth in Schedule G;
WHEREAS, I.T.E.M. - Pharma, S.A. ("ITEM Pharma"), a Spanish company,
with capital of Pesetas 10,000,000, having its head office at xxxxx Xxxxxxxxx,
00, 0x Xxxxxx, 00000, Xxxxx, is a subsidiary of ITEM International and ITEM
Spain controlled as to 50% by ITEM International and as to 50% by ITEM Spain.
The capital structure of ITEM Pharma is set forth in Schedule H;
WHEREAS, Verum TIL Occam Limited ("Verum TIL Occam"), a private company
limited by shares incorporated in England, registered as no. 2317735 under the
COMPANIES XXX 0000 and having its head office at 00 Xxxxx Xxxx, Xxxxxx Xxxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxx, XX0 0XX, Xxxxxxx, is a subsidiary of ITEM SA controlled
as to 50% by ITEM SA. The capital structure of Verum TIL Occam is set forth in
Schedule I;
WHEREAS, GEIE Verum ("GEIE Verum"), a Groupement Europeen d'Interets
Economiques, having its head office at 00 Xxxxx Xxxx, Xxxxxx Xxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxx, XX0 0XX, Xxxxxxx, controlled as to 25% by ITEM International
and as to 25% by Verum TIL Occam. The capital structure of GEIE Verum is set
forth in Schedule J;
WHEREAS, the principal activity of ITEM Holding, ITEM SA, ITEM
Labo, ITEM Clinica, ITEM Italia, ITEM International, ITEM Spain, ITEM Pharma,
Verum TIL Occam and GEIE Verum is the conduct of contract clinical research for
the pharmaceutical industry and pharmaceutical research, primarily in phases II
to IV;
WHEREAS, Phoenix is a multi-service contract research organization
which provides bioanalytical research, clinical studies, animal metabolism
studies as well as regulatory affairs services to pharmaceutical and
biotechnology companies in the United States and Canada;
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WHEREAS the Vendors have agreed to sell all of the outstanding shares
and all of the outstanding debentures of ITEM Holding to Phoenix in
consideration for the issuance to the Vendors of common shares of Phoenix;
NOW, THEREFORE, the parties hereto agree as follows:
1. INTERPRETATION AND DEFINITIONS
Except as the context otherwise explicitly requires, (a) the
capitalized term "Section" refers to sections of this Agreement; (b) the
capitalized terms "Schedules" and "Exhibit" refer to schedules and exhibits to
this Agreement; (c) references to a particular Section include all subsections
thereof; (d) the word "including" shall be construed as "including without
limitation"; (e) accounting terms not otherwise defined herein have the meaning
provided under GAAP (as defined below); (f) references to a particular law,
statute or regulation include all rules and regulations thereunder and any
successor, law, statute, regulation or rules, in each case as from time to time
in effect; (g) references to a particular Person include such Person's
successors and assigns to the extent not prohibited by this Agreement; (h)
references to dollars or $ in this Agreement are to Canadian dollars. In this
Agreement, unless the context otherwise requires, the following terms shall have
the respective meanings assigned to them:
1.1 "AFFILIATE" means, with respect to any Person, any Person
which, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with such Person.
1.2 "ARTICLES" means the original or restated articles of
incorporation, articles of amendment, articles of
amalgamation, articles of continuance, articles of
reorganization and articles of arrangement, including
amendments thereto, as in effect from time to time, of ITEM
Holding.
1.3 "COMPENSATION" as applied to any Person means the aggregate of
all salaries, compensation, remuneration or bonuses of any
character, retirement or pension benefits of any kind, or
other payments of any kind whatsoever (other than health and
medical benefits made available to employees generally and
advances and reimbursements of business expenses) made
directly or indirectly by ITEM Holding, any of the
Subsidiaries or other specified Persons to such Person and
affiliates of such Person.
1.4 "COMPLETION DATE" means the date of this Agreement, i.e.
August 7, 1997.
1.5 "CONSOLIDATED", when used with reference to any term, means
that term as applied to the accounts of ITEM Holding or other
indicated Person and each of its respective Subsidiaries,
consolidated or combined in accordance with GAAP after
eliminating all inter-company operations and with appropriate
deductions for minority interests in Subsidiaries.
1.6 "CONTRACTUAL OBLIGATION" means, with respect to any Person,
any contracts, agreements, deeds, hypothecs, mortgages,
indentures, leases, licenses, other instruments, commitments,
undertakings, arrangements or understandings, written or oral,
or other documents or instruments , including any provisions
of its articles of incorporation or other constating documents
or by-laws and any document or instrument evidencing
Indebtedness, to which any
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such Person is a party or otherwise subject to or bound by or
to which any property or asset of any such Person is subject.
1.7 "DEBENTURES" means FF 711,800 convertible debentures of ITEM
Holding being all of the issued and outstanding convertible
debentures of ITEM Holding.
1.8 "DISTRIBUTION" means (a) the declaration or payment of any
dividend on or in respect of the shares of any class or series
of shares of ITEM Holding, any of the Subsidiaries or other
specified Person, other than dividends payable solely in
common shares of the share capital of the payor; (b) the
purchase, redemption or other retirement of any shares of any
class of ITEM Holding, any of the Subsidiaries or other
specified Person directly, or indirectly through a Subsidiary
or otherwise; or (c) any other distribution on or in respect
of any shares of any class or series of shares of ITEM
Holding, any of the Subsidiaries or other specified Person.
1.9 "ESCROW AGENT" means Montreal Trust Company.
1.10 "ESCROW AGREEMENT" means the escrow agreement entered between
the parties hereto and the Escrow Agent a copy of which is
attached hereto as Schedule 1.10.
1.11 "ESCROWED SECURITIES" means the Phoenix Shares escrowed
pursuant to Section 2.6 together with all Proceeds (as defined
in the Escrow Agreement).
1.12 "ENVIRONMENTAL LAWS" means all Legal Requirements (including
consent decrees, administrative orders and contractual
obligations) relating to public health and safety, workers
health and safety and pollution or protection of the
environment.
1.13 "GAAP" means generally accepted accounting principles, as in
effect from time to time, consistently applied.
1.14 "GUARANTEE" means (a) any guarantee of the payment or
performance of, or any contingent obligation in respect of,
any indebtedness or other obligation of any other Person, (b)
any other arrangement whereby credit or financial assistance
is extended to one obligor on the basis of any promise or
undertaking of another Person (i) to pay the Indebtedness of
such obligor, (ii) to purchase any obligation owed by such
obligor, or (iii) to maintain the capital, working capital,
solvency or general financial condition of such obligor,
whether or not such arrangement is disclosed in the balance
sheet of such other Person or is referred to in a footnote
thereto or appears in a "keep well" agreement, "comfort
letter" or "take or pay" agreement, and (c) any liability of
ITEM Holding or any of the Subsidiaries or Significant
Investments as general partner of a partnership or as a
venturer in a joint venture in respect of Indebtedness or
other obligations of such partnership or venture; provided,
however, that in no event shall Guarantees include product
warranties given or the endorsement of negotiable instruments
for deposit or collection in the ordinary course of business.
1.15 "ITEM AFFILIATE" means any of Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx,
Codema and Xxxxx Xxxxxxx.
1.16 "LEGAL REQUIREMENT" means any national, provincial, regional,
municipal, local or foreign law, statute, standard, ordinance,
code, order, rule, regulation, resolution, promulgation,
by-
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law, policy, guideline, directive, standard and any other
provision having the force or effect of law or any final
order, judgment or decree of any court, arbitrator, tribunal
or governmental authority, or any license, franchise, permit,
certificate, authorization, registration or similar right
granted under any of the foregoing.
1.17 "LIEN" means (a) any hypothec, priority, mortgage, pledge,
lien, charge, security interest or other similar encumbrance
upon any property or assets of any character, or upon the
income or profits therefrom, whether arising by agreement or
under law, or otherwise (b) any conditional sale or other
title retention agreement or arrangement (including a
capitalized lease); (c) any sale, assignment, pledge or other
transfer for security of any accounts, general intangibles, or
chattel paper, with or without recourse, or (d) any
transaction (regardless of form) which is intended to create
any charge or encumbrance on property to secure the payment or
performance of an obligation.
1.18 "MANAGEMENT" means each of Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx,
Xxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxxxx.
1.19 "MATERIAL ADVERSE EFFECT" means any (a) material adverse
effect whatsoever upon the validity, performance or
enforceability of this Agreement, (b) material adverse effect
upon the business, assets, financial condition, income or
prospects of ITEM Holding, the Subsidiaries and the
Significant Investments on a Consolidated basis, or (c)
material adverse effect upon the ability of the Vendors to
perform their obligations under this Agreement.
1.20 "PERMITTED LIEN" means those Liens indicated on Schedule 1.20.
1.21 "PERSON" means an individual, partnership, corporation,
company, association, trust, joint venture, unincorporated
organization, business trust, limited liability company and
any governmental or administrative department or agency or
political subdivision.
1.22 "PHOENIX AFFILIATES" means Xxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxx
Xxxxxx, Xxxx-Xxxx Xxxxx, Xxx Xxxxxxxx, Xxxxx Xxxxx, Xx.
Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxx,
Xxxxxxxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxxxxx, Xxxxxxx X.
Xxxxxxx, Xxx Xxxxxxxxxx, Xxxxxx Xxxxxxx, Ebi Kimanani, Xxxx
Xxxxxxx, Xxxx Xxxxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxx and
Xxxxxx Xxxxxx.
1.23 "SEC" means the United States Securities and Exchange
Commission.
1.24 "SECURITIES ACT" means the United States Securities Act of
1933, as amended, and all rules and regulations promulgated
thereunder.
1.25 "SHARES" means 157,371 ordinary shares of ITEM Holding being
all of the issued and outstanding shares of ITEM Holding.
1.26 "SIGNIFICANT INVESTMENTS" means Verum TIL Occam and GEIE Verum
and "SIGNIFICANT INVESTMENT" means either Verum TIL Occam or
GEIE Verum.
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1.27 "SUBSIDIARIES" means ITEM SA, ITEM Labo, ITEM Clinica, ITEM
Italia, ITEM International, ITEM Spain and ITEM Pharma and
"SUBSIDIARY" means any of the Subsidiaries on an individual
basis.
2. SALE AND PURCHASE OF SHARES AND DEBENTURES
2.1 AGREEMENT TO PURCHASE AND SELL SHARES
Upon the terms and subject to the conditions hereof and in
reliance on the representations and warranties of Phoenix set forth in
Xxxxxxx 0, Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxx
Porsolt, Codema, Siparex Developpement, BNP Developpement and Epicea
hereby sell to Phoenix and, upon the terms and subject to the
conditions hereof and in reliance on the representations and warranties
of the Vendors set forth in Section 3, Phoenix hereby purchases from
Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxx Porsolt, Codema,
Siparex Developpement, BNP Developpement and Epicea, the Shares, as set
forth below:
VENDOR NUMBER OF ITEM HOLDING ORDINARY SHARES
------ --------------------------------------
Xxxxxx Xxxxx 1
Xxxxxxxxx Xxxxx 1
Xxxxxxxx Martins 2,795
Xxxxx Xxxxxxx 13,000
Codema 116,295
Siparex Developpement 10,279
BNP Developpement 7,500
Epicea 7,500
2.2 PRICE OF SHARES
The purchase price of the Shares is payable by the issuance by Phoenix
to Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxx Porsolt, Codema,
Siparex Developpement, BNP Developpement and Epicea of an aggregate of 4,486,555
common shares of Phoenix being 28.509414 common shares of Phoenix for each
Share. The aggregate purchase price for the Shares is to be allocated among
Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxx Porsolt, Codema, Siparex
Developpement, BNP Developpement and Epicea as follows:
VENDOR NUMBER OF PHOENIX SHARES
------ -------------------------
Xxxxxx Xxxxx 29
Xxxxxxxxx Xxxxx 29
Xxxxxxxx Martins 79,683
Xxxxx Xxxxxxx 370,622
Codema 3,315,502
Siparex Developpement 293,048
BNP Developpement 213,821
Epicea 213,821
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2.3 AGREEMENT TO PURCHASE AND SELL THE DEBENTURES
Upon the terms and subject to the conditions hereof and in reliance on
the representations and warranties of Phoenix set forth in Xxxxxxx 0, Xxxxxx
Xxxxx, Xxxxxxx Developpement, BNP Developpement and Natio Fonds Venture hereby
sell to Phoenix and, upon the terms and subject to the conditions hereof and in
reliance on the representations and warranties of the Vendors set forth in
Section 3, Phoenix hereby purchases from Xxxxxx Xxxxx, Siparex Developpement,
BNP Developpement and Natio Fonds Venture, the Debentures, as set forth below:
VENDOR AMOUNT OF ITEM HOLDING
------ ----------------------
CONVERTIBLE DEBENTURES
----------------------
Xxxxxx Xxxxx 72,600 FF
Siparex Developpement 277,900 FF
BNP Developpement 192,500 FF
Natio Fonds Venture 168,800 FF
2.4 PRICE OF THE DEBENTURES
The purchase price of the Debentures is payable by the issuance by
Phoenix to Xxxxxx Xxxxx, Siparex Developpement, BNP Developpement and Natio
Fonds Venture of an aggregate of 203,587 common shares of Phoenix (the common
shares of Phoenix referred to in Sections 2.2 and 2.4 being hereinafter
collectively referred to as the "Phoenix Shares"). The aggregate purchase price
for the Debentures is to be allocated among Xxxxxx Xxxxx, Siparex Developpement,
BNP Developpement and Natio Fonds Venture as follows:
VENDOR NUMBER OF PHOENIX SHARES
------ ------------------------
Xxxxxx Xxxxx 20,765
Siparex Developpement 79,484
BNP Developpement 55,058
Natio Fonds Venture 48,280
2.5 DELIVERY OF SHARES AND DEBENTURES AND PAYMENT OF PURCHASE PRICE
2.5.1 Phoenix hereby acknowledges receipt from
Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxxx, Xxxxx Porsolt, Codema, Siparex
Developpement, BNP Developpement and Epicea
of deeds of transfer of the Shares for
transfer by Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx,
Xxxxxxxx Xxxxxxx, Xxxxx Porsolt, Codema,
Siparex Developpement, BNP Developpement and
Epicea to Phoenix.
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2.5.2 Phoenix hereby acknowledges receipt from
Xxxxxx Xxxxx, Siparex Developpement, BNP
Developpement and Natio Fonds Venture of
deeds of transfer of the Debentures for
transfer by Xxxxxx Xxxxx, Siparex
Developpement, BNP Developpement and Natio
Fonds Venture of the Debentures to Phoenix.
2.5.3 Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxxx, Xxxxx Porsolt, Codema, Siparex
Developpement, BNP Developpement and Epicea
hereby acknowledge receipt from Phoenix of
certificates registered in the names of
Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxxx, Xxxxx Porsolt, Codema, Siparex
Developpement, BNP Developpement and Epicea
representing an aggregate of 4,037,900
common shares of Phoenix in payment 90% of
the purchase price for the Shares.
2.5.4 Xxxxxx Xxxxx, Siparex Developpement, BNP
Developpement and Natio Fonds Venture hereby
acknowledge receipt from Phoenix of
certificates registered in the names of
Xxxxxx Xxxxx, Siparex Developpement, BNP
Developpement and Natio Fonds Venture
representing an aggregate of 183,228 common
shares of Phoenix in payment of 90% of the
purchase price for the Debentures.
2.6 ISSUANCE INTO ESCROW
Notwithstanding any provision of this Agreement, upon delivery of the
Phoenix Shares pursuant to Section 2.5, 10% of the aggregate number of the
common shares of Phoenix issuable in payment of the purchase price of the Shares
and the Debentures shall be delivered immediately to the Escrow Agent, on a pro
rata basis among the Vendors, to be held and released by the Escrow Agent
pursuant to the terms of this Agreement and the Escrow Agreement. All such
Phoenix Shares shall be issued in the name of the Escrow Agent, as escrow agent
under the Escrow Agreement. The Vendors hereby acknowledge receipt of such 10%
of the purchase price of the Shares and the Debentures on their behalf by the
Escrow Agent.
2.7 TRANSFER TAXES
The parties agree that, for purposes of transfer tax filings in France,
a separate document in form and substance similar to Schedule 2.7 shall be
prepared for the purposes of registration of each sale with French taxation
authorities. The parties agree that such document shall not have precedence over
this Agreement and shall not constitute a waiver of any of the terms and
conditions, representations and warranties of this Agreement. The parties
undertake not to disclose such document to any third parties with the exception
of the relevant taxation authorities for purposes of registration.
2.8 UNDERTAKING RE TRANSFER OF ITEM ITALIA SHARES
Xxxxxx Xxxxx hereby undertakes to transfer all of the shares of the
share capital of ITEM Italia held by him to ITEM SA for no additional
consideration, by no later than September 30, 1997. All expenses related to the
transfer of such shares shall be borne by Xxxxxx Xxxxx.
2.8 UNDERTAKING RE RELEASE OF GUARANTEES AND INDEMNIFICATION
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Phoenix hereby undertakes to use its best efforts to obtain the release
by Banque Nationale de Paris of the guarantee given by Xxxxxx Xxxxx of the
obligations of ITEM Holding under a loan of FF 2,200,000 pursuant to a loan
agreement dated July 7, 1993. In the event that Xxxxxx Xxxxx is called upon to
make any payment under the terms of such guarantee, Phoenix hereby agrees to
defend, indemnify and hold harmless Xxxxxx Xxxxx from and against all claims
made against him by Banque Nationale de Paris in connection with such guarantee.
3.1 REPRESENTATIONS AND WARRANTIES OF VENDORS
For the purposes of this Section 3, "Significant Investments" shall not
include Verum Til Occam. In order to induce Phoenix to enter into this Agreement
and to purchase the Shares and the Debentures hereunder, the Vendors hereby make
the following representations and warranties to Phoenix. The Vendors' liability
for the following representations and warranties shall be joint, and not
solidary, except in the event of fraud with respect thereto.
3.1 SHARES AND DEBENTURES
Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxx
Porsolt, Codema, Siparex Developpement, BNP Developpement and Epicea
own the Shares free and clear of all Liens and there are no rights or
other obstacles of any nature whatsoever to the sale of the Shares to
Phoenix and Xxxxxx Xxxxx, Siparex Developpement, BNP Developpement and
Natio Fonds Venture own the Debentures free and clear of all Liens and
there are no rights or other obstacles of any nature whatsoever to the
sale of the Debentures to Phoenix.
3.2 ORGANIZATION
3.2.1 DUE INCORPORATION, ETC. Each of ITEM
Holding, the Subsidiaries and the
Significant Investments is duly incorporated
or organised and validly exists under the
laws of its jurisdiction of incorporation,
and is in good standing under the laws
applicable to it and has all necessary
corporate capacity and power to own and
lease its property and assets and to carry
on the businesses now conducted or presently
proposed to be conducted by it.
3.2.2 SUBSIDIARIES AND SIGNIFICANT INVESTMENTS.
ITEM Holding does not own or control,
directly or indirectly, or have an interest
in, any other corporation, partnership,
association or business entity other than
the Subsidiaries and the Significant
Investments.
3.2.3 MANAGEMENT. The management of ITEM Holding,
the Subsidiaries and the Significant
Investments is exclusively comprised of the
Persons referred to in Section 1.18.
3.2.4 AUTHORIZATIONS AND APPROVALS. All
authorizations, approvals, licences,
permits, certificates, registrations,
consents, exemptions or declarations
required in order for each of ITEM Holding,
the Subsidiaries and the Significant
Investments to own or lease their property
and assets and to carry on their business in
all jurisdictions in which such property and
assets are located or such business is
carried on have been duly obtained or
effected and are in full force and effect
except for authorizations,
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approvals, licences, permits, certificates,
registrations, consents, exemptions or
declarations, the absence of which,
individually or in the aggregate, does not
and shall not result in a Material Adverse
Effect.
In particular:
(a) except for permits, certificates, licences,
registrations and other authorizations, the
absence of which, individually or in the
aggregate, does not and shall not result in
a Material Adverse Effect, each of ITEM
Holding, the Subsidiaries and the
Significant Investments hold all permits,
certificates, licenses, registrations and
other authorizations required under
applicable Environmental Laws for their
operations (the "Environmental Permits");
each such Environmental Permit is valid and
in force and the operations of ITEM Holding,
the Subsidiaries and the Significant
Investments are in compliance with the
conditions set out in such Environmental
Permits; the Vendors and Management do not
have any knowledge of any grounds for
revocation, expiry or annulment of any such
Environmental Permits;
(b) except for permits, certificates, licences,
registrations and other authorizations, the
absence of which, individually or in the
aggregate, does not and shall not result in
a Material Adverse Effect, each of ITEM
Holding, the Subsidiaries and the
Significant Investments hold all permits,
certificates, licenses, registrations and
other authorizations required under
applicable Legal Requirement for clinical
research for the pharmaceutical industry and
pharmaceutical research (the "Research
Permits"); each such Research Permit is
valid and in force and, to the Vendors'
knowledge and to the knowledge of
Management, the operations of ITEM Holding,
the Subsidiaries and the Significant
Investments are in compliance with the
conditions set out in such Research Permits;
the Vendors and Management do not have any
knowledge of any grounds for revocation,
expiry or annulment of any such Research
Permits;
3.2.5 CORPORATE RECORDS. The Corporate minute
books and records of ITEM Holding and each
of the Subsidiaries and Significant
Investments are complete and up to date.
3.2.6 OFFICERS AND DIRECTORS. The officers and
directors of ITEM Holding and each of the
Subsidiaries and Significant Investments
have been properly elected or appointed in
accordance with applicable laws and the
relevant articles of incorporation or other
constating documents.
3.2.7 CORPORATE ACTION. All necessary corporate
action has been taken by ITEM Holding, to
authorize the execution of this Agreement
and the consummation of the transactions
contemplated hereby.
3.3 CAPITALIZATION
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3.3.1 SHARE CAPITAL OF ITEM HOLDING. The
authorized share capital of ITEM Holding is
exhaustively set forth in Schedule A, all of
which has been validly issued and is fully
paid and non-assessable and, subject to no
Lien, adverse claim or restriction on
transfer, except restrictions on transfer
under this Agreement.
3.3.2 OPTIONS, ETC. Other than as set forth in
Schedule A and Schedule 3.3.5, ITEM Holding
does not have outstanding (a) any rights
(either preemptive or otherwise) or options
to subscribe for or purchase, or any
warrants or other agreements providing for
or requiring the issuance of, any shares or
any securities convertible into or
exchangeable for its shares, (b) any
obligation to redeem, purchase or otherwise
acquire or retire any of its shares, any
securities convertible into or exchangeable
for its shares or any rights, options or
warrants with respect thereto, (c) any
rights to require ITEM Holding to qualify
for distribution for securities laws
purposes, or (d) any restrictions on voting.
3.3.3 CAPITAL STOCK OF THE SUBSIDIARIES. The
authorized issued and outstanding share
capital of each Subsidiary and Significant
Investment is set forth in Schedules B to J.
Other than as set forth in Schedule 3.3.3
and Schedule 3.19, the issued and
outstanding share capital of each Subsidiary
and Significant Investment is validly
issued, and paid and non-assessable and
subject to no Lien, adverse claim or
restriction on transfer.
3.3.4 SUBSIDIARY AND SIGNIFICANT INVESTMENT
OPTIONS, ETC. Other than as set forth in
Schedule 3.3.4, none of the Subsidiaries and
none of the Significant Investments has
outstanding (a) any rights (either
preemptive or otherwise) or options to
subscribe for or purchase, or any warrants
or other agreements providing for or
requiring the issuance of, any shares or any
securities convertible into or exchangeable
for its shares, (b) any obligation to
redeem, purchase or otherwise acquire or
retire any of its shares, any securities
convertible into or exchangeable for its
shares or any rights, options or warrants
with respect thereto, (c) any rights to
require the Subsidiary or the Significant
Investment to qualify for distribution for
securities laws purposes, or (d) any
restrictions on voting.
3.3.5 NO COMMITMENTS AFFECTING SHARE CAPITAL, ETC.
Other than as set forth in Schedule 3.3.5
and Schedule 3.19, neither ITEM Holding nor
any of the Subsidiaries or Significant
Investments is a party to or bound by any
agreement, commitment or understanding,
whether verbal or written, affecting its
share capital or the voting rights attached
thereto.
3.4 REPORTS, FINANCIAL STATEMENTS AND OTHER DOCUMENTS
Phoenix has been provided with complete and correct copies of
consolidated financial statements of ITEM Holding and its Subsidiaries
and the non consolidated financial statements of ITEM Holding and of
each of its Subsidiaries, except ITEM Italia and ITEM Clinica, for
which limited financial information is available and has been provided,
and Significant Investments (balance sheet, statement of earnings and
schedules) for both the year ended December 31, 1996, and for the
period ended May 31, 1997, copies of which are attached hereto as
Schedule 3.4A.
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The consolidated financial statements and the non-consolidated
financial statements of ITEM Holding, ITEM SA, ITEM Labo and ITEM
International referred to above have been prepared in accordance with
French GAAP, the non-consolidated financial statements of ITEM Pharma
referred to above have been prepared in accordance with Spanish GAAP,
the non-consolidated financial statements of Verum TIL Occam referred
to above have been prepared in accordance with English GAAP, the
non-consolidated financial statements ofGEIE Verum referred to above
have been prepared in accordance with French GAAP and all such
financial statements fairly present the financial condition of ITEM
Holding, the Subsidiaries and the Significant Investments, other than
ITEM Italia and ITEM Clinica, at the dates thereof and the results of
their operations for the periods covered thereby. Other than as set
forth in Schedule 3.5, neither ITEM Holding nor any of the Subsidiaries
or Significant Investments has material liabilities, contingent or
otherwise, which are not referred to in the financial statements.
The financial statements for the year ended December 31, 1996,
copies of which are attached hereto as Schedule 3.4A have been properly
approved by the annual general meetings of shareholders of the relevant
entities in due form without reservation, except the financial
statements of Verum TIL Occam, which have been approved by its board of
directors in due form without reservation.
For purposes of financial presentation, ITEM Holding
recognizes net revenue from its contracts on a percentage of completion
basis as work is performed. The percentage of completion, and
consequently the revenue to be recorded, of each individual contracts
is determined through detailed analysis and discussion between all
appropriate operational and financial department management. Although
ITEM Holding does not require collateral for unpaid balances, credit
losses have consistently been within Management's expectations. Certain
contracts contain provisions for price adjustment for cost overruns.
Such adjusted amounts are included in service revenue when realization
is assured and the amounts can be reasonably determined. In the period
in which it is determined that a loss will result from the performance
of a contract, the entire amount of the estimated ultimate loss is
charged against income.
ITEM Holding backlog (calculated based on fee payments
anticipated to be received under letters of intent and legally binding
written agreements for the provision of contract research to third
parties) ("Backlog") as of May 31, 1997 was as described in Schedule
3.4B, as certified by ITEM Holding's principal financial officer.
3.5 OFF BALANCE SHEET OBLIGATIONS
Schedule 3.5 contains a complete list of the off-balance sheet
obligations of ITEM Holding, the Subsidiaries and the Significant
Investments, including all guarantees and obligations to the benefit of
the Vendors, members of their families or third parties.
3.6 CHANGES IN CONDITION
3.6.1 MATERIAL ADVERSE EFFECT. Since May, 1997, no
event having a Material Adverse Effect has
occurred.
3.6.2 EXTRAORDINARY TRANSACTIONS, ETC. Since
December 31, 1996, neither ITEM Holding nor
any of the Subsidiaries or Significant
Investments has (a) made any Distribution,
(b) other than as set forth in Schedule 3.6.
2, made any payment (other
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than Compensation of its directors, officers
and employees in amounts in effect prior to
December 31, 1996 or for bonuses accrued in
accordance with normal practice prior to
December 31, 1996) to any of the Vendors,
(c) other than as set forth in Schedule
3.6.2, increased the Compensation, including
bonuses, payable or to be payable to any of
its directors, officers or employees by more
than 5% (10% with respect to the directors,
officers or employees of Verum TIL Occam),
or (d) entered into any Contractual
Obligation, or entered into or performed any
other transaction, not in the ordinary and
usual course of business and consistent with
past practice.
3.6.3 INVENTORY AND WORK-IN-PROGRESS. The value of
inventory and work-in-progress reflected in
the financial statements of ITEM Holding,
ITEM SA, ITEM Labo and ITEM International
has been established in accordance with
French GAAP and there has been no material
change in the period subsequent to May 31,
1997. The value of inventory and
work-in-progress reflected in the financial
statements of ITEM Pharma and ITEM Spain
have been established in accordance with
Spanish GAAP and there has been no material
change in the period subsequent to May 31,
1997. The value of inventory and
work-in-progress reflected in the financial
statements of Verum TIL Occam has been
established in accordance with English GAAP
and there has been no material change in the
period subsequent to May 31, 1997.
3.7 (INTENTIONALLY OMITTED).
3.8 SOLVENCY
After giving effect to the transactions contemplated hereby,
ITEM Holding shall be able to pay its liabilities as they become due.
3.9 CONTRACTUAL OBLIGATIONS, ETC.
3.9.1 CERTAIN CONTRACTS. Schedule 3.9.1 contains,
together with a reference to the
subparagraph pursuant to which each item is
being disclosed, a correct and complete list
of all Contractual Obligations of ITEM
Holding, the Subsidiaries and the
Significant Investments of the types
described below:
(a) All collective bargaining agreements; all
employment agreements, all profit sharing,
profit participation, deferred compensation,
bonus, stock option, stock purchase,
pension, retainer, consulting, retirement,
welfare or incentive plans or agreements;
and all plans, agreements or practices which
constitute Compensation or "fringe benefits"
to any of the employees of ITEM Holding, the
Subsidiaries or the Significant Investments,
including vacation programs, sick leave
programs, group medical insurance, group
life insurance, disability insurance and
related benefits.
(b) All Contractual Obligations under which ITEM
Holding, the Subsidiaries or the Significant
Investments are restricted from carrying on
any business, venture or other activities
anywhere in the world.
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(c) All Contractual Obligations (including
options) to sell, lease (as lessor),
exchange or otherwise dispose of or transfer
any of the properties or assets of ITEM
Holding, the Subsidiaries or the Significant
Investments except in the ordinary course of
business.
(d) All Contractual Obligations pursuant to
which ITEM Holding, the Subsidiaries or the
Significant Investments guarantees or
otherwise assumes any liability of or gives
financial assistance to any Person, or
pursuant to which any Person guarantees or
otherwise assumes any liability of ITEM
Holding, the Subsidiaries or the Significant
Investments.
(e) All Contractual Obligations constituting
license agreements, service agreements,
consulting agreements or other similar
arrangements, the termination of which,
individually or in the aggregate, would
result in a Material Adverse Effect.
(f) All Contractual Obligations under which ITEM
Holding, any of the Subsidiaries and any of
the Significant Investments leases immovable
property or is obligated to lease or
purchase immovable property or incur capital
expenditures in excess of FF100,000.
(g) All Contractual Obligations of ITEM Holding,
any of the Subsidiaries or the Significant
Investments relating to the borrowing of
money or to the creation of a Lien, other
than a Permitted Lien, on any property or
asset of ITEM Holding, any of the
Subsidiaries or the Significant Investments.
(h) All Contractual Obligations of ITEM Holding,
any of the Subsidiaries and any of the
Significant Investments requiring a notice
exceeding 6 (six) months for termination.
(i) All Contractual Obligations of ITEM Italia
and ITEM Clinica.
3.9.2 NATURE OF CONTRACTS. All of the Contractual
Obligations of ITEM Holding, the
Subsidiaries and the Significant Investments
at the Completion Date are enforceable
against ITEM Holding, the Subsidiaries and
the Significant Investments and, to the
Vendors' knowledge and to the knowledge of
Management, the other parties thereto, in
accordance with their terms; except for
Contractual Obligations the failure of which
to be so enforceable does not and shall not,
individually or in the aggregate, result in
a Material Adverse Effect. Except for
breaches, defaults and liabilities which do
not and shall not individually or in the
aggregate result in a Material Adverse
Effect, neither ITEM Holding nor any of the
Subsidiaries or Significant Investments is
now in default, and no event has occurred
which with notice or lapse of time or both
would constitute a default under, nor are
there any liabilities arising from any
breach or default by any of them or event
which with notice or lapse of time or both
would constitute a default by any of them
prior to the Completion Date of, any
provision of any such Contractual
Obligation.
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3.9.3 ARTICLES. Except as set forth in Schedule
3.19, neither ITEM Holding nor any of the
Subsidiaries or Significant Investments is
in violation of, or in default under, any
provision of its articles or constating
documents and Phoenix has been provided with
complete and correct copies of such articles
or constating documents.
3.9.4 INSURANCE. Each of ITEM Holding, the
Subsidiaries and the Significant Investments
carries insurance policies with independent
third party insurers which, with respect to
their amounts and types of coverage, are
adequate to insure against risks to which
each of ITEM Holding, the Subsidiaries and
the Significant Investments and their
respective property and assets are normally
exposed in the operation of their respective
businesses, including without limitation
professional liability. All policies, the
absence of which, individually or in the
aggregate, would result in a Material
Adverse Effect, are in full force and effect
and are free from any right of termination
on the part of the applicable insurance
carriers. To the knowledge of the Vendors
and Management, there are no outstanding
unpaid premiums except in the ordinary
course of business, and neither ITEM Holding
nor any Subsidiary or Significant Investment
has received any notice of cancellation or
non-renewal of any such policy. Neither ITEM
Holding nor any Subsidiary or Significant
Investment is aware of any risks,
situations, occurrences or other matters
which have been disclosed, or should have
been disclosed, to insurance carriers or
brokers in connection with any application
for such insurance as a result of which an
insurance carrier would have a right to
cancel the corresponding insurance policy or
deny coverage with respect to any rights
under any such policies. There exists no
event of default or event, occurrence,
condition or act (including the transactions
contemplated by this Agreement) which, with
the giving of notice, the lapse of time or
the happening of any further event or
condition, would become a default or
occasion a material premium increase under
any such policy or give rise to, and neither
ITEM Holding, nor any Subsidiary or
Significant Investment has any anticipation
of, any termination or cancellation thereof
or material premium increase therefor.
3.9.5 DISPUTE. Neither ITEM Holding nor any of the
Subsidiaries or the Significant Investments
has received any notice from any supplier,
vendor, contractor, customer or client with
which ITEM Holding or such Subsidiary or
Significant Investment has conducted
business during the one-year period ending
on the date of this Agreement confirming
such Person's intention to reduce the volume
under, terminate or otherwise alter any
Contractual Obligation with ITEM Holding or
any Subsidiary or Significant Investment,
the effect of which, individually or in the
aggregate, would result in a Material
Adverse Effect.
3.10 OPERATIONS IN CONFORMITY WITH LAW, ETC.
The operations of ITEM Holding, the Subsidiaries and the
Significant Investments as now conducted, and their properties, assets,
equipments, buildings, immoveables and leased or occupied properties,
are not, and have not been, in violation of, nor is ITEM Holding or any
of the Subsidiaries or Significant Investments in default and no event
has occurred which with notice or lapse of time or both would
constitute a default under, any Legal Requirements including, in
particular, any Environmental Laws or Legal Requirements regarding
clinical research and experimentation on
- 17 -
animals, except for such violations and defaults as do not and shall
not, in the aggregate, have a Material Adverse Effect. Neither ITEM
Holding nor any of the Subsidiaries or the Significant Investments has
received notice of any such violation or default and neither the
Vendors nor the Management have knowledge of any basis on which the
operations of ITEM Holding or any of the Subsidiaries or Significant
Investments, when conducted as currently proposed to be conducted after
the Completion Date, would be held so as to violate or to give rise to
any such violation or default. ITEM Holding, the Subsidiaries and the
Significant Investments have all franchises, licenses, permits,
certificates, authorizations, registrations or other authority
presently necessary for the conduct of their business as now conducted,
except for franchises, licences, permits, certificates, authorizations,
registrations or other authority, the absence of which, individually or
in the aggregate, does not and shall not result in a Material Adverse
Effect. Based on the facts presently known to the Vendors and
Management, all future expenditures on the part of ITEM Holding, the
Subsidiaries and the Significant Investments required to meet the
provisions of any presently existing Legal Requirements (including
Legal Requirements relating to employment practices or to occupational
or health standards or to environmental considerations) shall not, in
the aggregate, have a Material Adverse Effect. To the knowledge of the
Vendors and Management, ITEM Holding, the Subsidiaries and the
Significant Investments have complied and are in compliance with
applicable competition regulations and have never infringed fair
competition in the markets where they operate, either with or towards
third companies or between themselves. To the knowledge of the Vendors
and Management, ITEM Holding, the Subsidiaries and the Significant
Investments do not hold separately or together a dominant position on
the markets involved and their market share and net aggregate turnover
do not meet the European, French, Italian, Spanish, British and
Romanian thresholds which authorizes European or domestic competition
authorities to control the operation and impede the completion of the
transaction contemplated hereby.
3.11 INTELLECTUAL PROPERTY
Schedule 3.11 contains a list of all the trade-marks, trade
names and patents used by any of ITEM Holding, the Subsidiaries or the
Significant Investments (collectively "Used Intellectual Property").
The entity indicated in said Schedule as owner of Used Intellectual
Property is the registered and beneficial owner of such Used
Intellectual Property or the registration thereof, if applicable,
(except as set forth in Schedule 3.11), with good and marketable title,
unencumbered (except for Permitted Liens), and with full right to sell,
assign or otherwise transfer or license to others and subject to no
pending challenge, refutation, expiry or termination other than as set
forth in Schedule 3.11. To the knowledge of Management and the Vendors,
none of ITEM Holding, the Subsidiaries or the Significant Investments
uses any intellectual property not owned by it, other than software
purchased "off the shelf", except as set forth in Schedule 3.11, all of
which each entity using said property has the right to use
(collectively "Licenced Intellectual Property"). (Used Intellectual
Property and Licensed Intellectual Property are sometimes hereinafter
referred to collectively as "Intellectual Property"). To the knowledge
of Management and the Vendors, none of ITEM Holding, the Subsidiaries
or the Significant Investments is required to pay royalties, fees or
other consideration to any other person with respect to the use of any
of the Intellectual Property or in connection with the conduct of its
business or otherwise. To the knowledge of Management, none of ITEM
Holding, the Subsidiaries or the Significant Investments has infringed
the intellectual or industrial property rights of any other person, nor
has any of them used any intellectual or industrial property
(including, without limitation, trade-marks, trade names, patents,
models, designs and copyrights) which it does not own or have the right
to use other than as set forth in Schedule 3.11. There are no
outstanding claims asserted against any of ITEM Holding, the
Subsidiaries or the Significant Investments alleging
- 18 -
the infringement or the misappropriation by any of them of any
intellectual or industrial property. None of ITEM Holding, the
Subsidiaries or the Significant Investments has granted any licences or
sub-licences to third parties with respect to any of the Intellectual
Property other than as set forth in Schedule 3.11 and neither the
Vendors nor Management has any knowledge of any infringement or
misappropriation by any other Person of any of the Intellectual
Property. Neither the execution nor delivery of this Agreement will
constitute a breach of or a default under any agreement relating to the
Intellectual Property.
3.12 ENVIRONMENTAL MATTERS
3.12.1 ITEM Holding, the Subsidiaries and the
Significant Investments, their employees,
agents, shareholders, directors and officers
have never been declared guilty of
committing an offence for a violation of
Environmental Laws and have never been fined
for such an offence or have otherwise
settled such a prosecution in connection
with the activities of ITEM Holding, the
Subsidiaries and the Significant
Investments;
3.12.2 There are no contaminants, waste or
pollutants of any kind whatsoever in, on or
under the equipment, buildings, immoveables
or properties owned, leased or occupied by
ITEM Holding or any of the Subsidiaries or
Significant Investments, the presence of
which constitutes a violation of applicable
Environmental Laws and the presence of
which, individually or in the aggregate,
constitutes a Material Adverse Effect;
3.12.3 Neither ITEM Holding nor any of the
Subsidiaries or Significant Investments has
received any written notice or request for
information in the context of any national,
supra-national, provincial, regional, local
or municipal environmental investigation or
inspection;
3.12.4 There are no PCBs, asbestos, urea
formaldehyde or radioactive substances in,
on or under the equipment, buildings,
immoveables or properties owned, leased or
occupied by ITEM Holding, the Subsidiaries
or the Significant Investments;
3.12.5 There is no action, suit or proceeding
pending in relation to environmental matters
against ITEM Holding, the Subsidiaries or
the Significant Investments, its employees,
agents, shareholders, directors and
officers, or involving ITEM Holding, the
Subsidiaries or the Significant Investments
or its assets, before any judicial body,
tribunal, commission, agency or other
governmental entity, and to the Vendors'
knowledge and to the knowledge of
Management, there is no threat of, or event
or fact based on which, such action, suit or
proceeding may be instituted.
3.12.6 To the knowledge of Management and the
Vendors, ITEM Holding, the Subsidiairies and
the Significant Investments are in
compliance with all applicable environmental
and health and safety laws and regulations,
with the exception of instances of non-
compliance which, individually or in the
aggregate, do not constitute a Material
Adverse Effect, and the absence of fire
doors at the premises of ITEM SA in Paris
and the non-conformity of the main entrance
to the same premises to the requirements of
the Labour Code concerning the size of such
entrance.
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3.13 LABOUR AND EMPLOYMENT MATTERS
3.13.1 Without limiting the generality of Section
3.10, each of ITEM Holding, the Subsidiaries
and the Significant Investments has complied
with all laws relating to the employment of
labour, including provisions thereof
relating to wages, hours and collective
bargaining rights.
3.13.2 Other than as set forth in Schedule 3.13.2,
there is no collective agreement by which
ITEM Holding or any of the Subsidiaries or
Significant Investments is bound which
relates to the employees of ITEM Holding,
the Subsidiaries or the Significant
Investments. To the knowledge of the Vendors
and to the knowledge of Management, there
are no threatened or pending attempts to
organize or establish any labour union or
employee association in connection with the
business of ITEM Holding, any of the
Subsidiaries or any of the Significant
Investments. To the knowledge of the Vendors
and to the knowledge of Management, there is
no pending or threatened labour dispute,
grievance, strike, or work stoppage
materially affecting the business of any of
ITEM Holding, any of the Subsidiaries or any
of the Significant Investments. Neither ITEM
Holding nor any of the Subsidiaries or
Significant Investments is a party to any
other written employment agreement,
contract, arrangement, management contract
or service contract affecting employees
other than as set forth in Schedule 3.9.1,
nor are any such contracts, agreements,
arrangements, management contracts or
service contracts being currently negotiated
or proposed other than in the ordinary
course of business.
3.13.3 There exist no retirement plans, profit
sharing, option or incentive plans, or
insurance disability, medical, surgical,
dental or other employee benefit plans for
employees of ITEM Holding, any of the
Subsidiaries or any of the Significant
Investments other than as set forth in
Schedule 3.9.1 for which adequate
arrangements have been made since December
31, 1996 to set aside the requisite amounts
in the prescribed fashion, and neither ITEM
Holding nor any of the Subsidiaries or
Significant Investments has promised or
intends to implement other such plans.
3.13.4 Other than as set forth in Schedule 3.13.4,
neither ITEM Holding nor any of the
Subsidiaries or Significant Investments has
any employee who cannot be dismissed without
further liability upon such notice period
not exceeding what it is required by the
Legal Requirement.
3.13.5 Each of ITEM Holding's or any of the
Subsidiary's or Significant Investment's
employees who is practising as a physician,
nurse or pharmacist is identified in
Schedule 3.13.5, and each such employee is
duly licensed and in good standing to
practice as a physician, nurse or
pharmacist, as the case may be, in each
jurisdiction in which such employee renders
services for or on behalf of ITEM Holding or
any Subsidiary or Significant Investment.
None of the employees listed on Schedule
3.13.5 is or has been subject to any claim
in connection with his or her practice as a
physician, nurse or pharmacist while
employed by ITEM Holding, the Subsidiary or
the Significant Investment, as the case may
be, and no fact or occurrence is known to
the Management to exist which is likely to
give rise to the revocation of any such
licence.
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3.13.6 Each of ITEM Holding's or any of the
Subsidiary's or Significant Investment's
employees other than those identified in
Schedule 3.13.6 has signed non-compete
covenants in favour of ITEM Holding, the
Subsidiary or the Significant Investment, as
the case may be.
3.14 TAXES
Other than as set forth in Schedule 3.14 and with respect to
the specific tax related contingencies referred to in Section 8, all
tax returns required to be filed by ITEM Holding, the Subsidiaries and
the Significant Investments in any jurisdiction have been filed and all
taxes, assessments, levies and other governmental charges upon ITEM
Holding, the Subsidiaries and the Significant Investments or upon any
of their properties or income, including any tax in respect of value
added, have been duly paid unless such payment is being contested in
good faith and by appropriate proceedings and adequate reserves with
respect thereto determined in accordance with applicable policies have
been established by ITEM Holding, the Subsidiaries and the Significant
Investments. Other than as set forth in Schedule 3.14, there is no tax
assessment threatened in writing against ITEM Holding and any of the
Subsidiaries or Significant Investments and, to the knowledge of
Management, there is no basis for such assessment.
3.15 WITHHOLDINGS
Each of ITEM Holding, the Subsidiaries and the Significant
Investments has withheld from each payment made to any of its
shareholders, officers, directors, non-resident creditors and employees
the amount of all taxes and other deductions required to be withheld
and has remitted all such amounts to the appropriate authorities within
the prescribed times, and has otherwise fulfilled all requirements of
all Legal Requirements governing such deductions and withholdings. Each
of ITEM Holding, the Subsidiaries and the Significant Investments has
remitted to the proper authorities all employer contributions due and
payable under all social security, occupational health and safety and
pension plans.
3.16 GOOD TITLE
Other than as set forth in Schedule 3.16 each of ITEM Holding,
the Subsidiaries and the Significant Investments has good and
marketable title to all of its property free and clear of Liens and
other adverse claims.
3.17 LITIGATION
Outstanding litigation is disclosed in Schedule 3.17. No
litigation or proceeding before, or investigation by, any foreign,
national, supra-national or municipal, judicial, tax or customs
tribunal or board or other governmental or administrative agency or any
arbitrator, is pending or to the knowledge of the Vendors and the
knowledge of Management, threatened (or does any basis exist therefor),
against ITEM Holding, the Subsidiaries or the Significant Investments
or, to the Vendors' knowledge or to the knowledge of Management, any
director or officer of ITEM Holding or any of the Subsidiaries or
Significant Investments, which individually or in the aggregate could
result in a Material Adverse Effect, or which seeks rescission of,
seeks to enjoin the consummation of, or which
- 21 -
questions the validity of, this Agreement or any of the transactions
contemplated hereby. Neither ITEM Holding nor the Subsidiaries or
Significant Investments has been charged, nor to the Vendors' knowledge
or to the knowledge of Management, is it threatened to be charged, with
infringement of any trademark, trade name, service xxxx, copyright,
patent, patent right or other proprietary right of any Person.
3.18 PRESS COVERAGE
Neither ITEM Holding, nor any of the Subsidiaries or
Significant Investments has been the object of any demonstrations,
press campaigns or other attacks due to the nature of its activities,
since January 1, 1994.
3.19 VIOLATION OF OTHER INSTRUMENTS
Neither the execution and delivery of this Agreement by the
Vendors or ITEM Holding, the consummation of any of the transactions
contemplated hereby or in Schedule 3.19, shall (a) constitute a breach
of or a default or an event which with notice or lapse of time or both
would constitute a default under any Contractual Obligation of ITEM
Holding or any of the Subsidiaries or Significant Investments or any
officer of ITEM Holding, the Subsidiaries or Significant Investments,
(b) result in acceleration in the time for performance of any
obligation of ITEM Holding, the Subsidiaries or the Significant
Investments under any such Contractual Obligation, (c) result in the
creation of any Lien upon any property or asset of ITEM Holding, the
Subsidiaries or the Significant Investments, (d) require any consent,
waiver or amendment to any such Contractual Obligation that has not
been obtained and remains in full force and effect, (e) give rise to
any severance payment, right of termination, securities purchase or
redemption right or other right under any such Contractual Obligation,
or (f) violate or give rise to a default or an event which with notice
or lapse of time or both could constitute a default under any Legal
Requirements, except for events or conditions described in clauses (a)
through (f) above which shall not, individually or in the aggregate,
have any Material Adverse Effect or (g) result in any state of facts
which could have a Material Adverse Effect.
3.20 APPROVALS, CONSENTS, ETC.
Other than as set forth in Schedule 3.20, no approval,
consent, authorization or other order of, and no declaration, filing,
registration, qualification or recording with, any governmental
authority or any other Person is required to be made by or on behalf of
the Vendors, ITEM Holding or any of the Subsidiaries or Significant
Investments in connection with the execution, delivery or performance
of this Agreement or any of the transactions contemplated hereby.
3.21 INVESTMENT OR DIVESTITURE
Schedule 3.21 contains a complete list of all investments and
divestitures in process which are not mentioned in the financial
statements of ITEM Holding, the Subsidiaries and the Significant
Investments (balance sheet, statement of earnings and schedules) for
the period ended May 31, 1997.
3.22 FULL DISCLOSURE
To the knowledge of Management and the Vendors, there is no
fact that the Vendors have not disclosed to Phoenix which could have a
Material Adverse Effect on the properties, business,
- 22 -
prospects or condition (financial or otherwise) of ITEM Holding or any
of the Subsidiaries or Significant Investments. Neither the reports,
financial statements and other documents referred to in Section 3.4,
nor any certificate, statement or document delivered by the Vendors to
Phoenix in connection with this Agreement contains any untrue statement
of a fact or omits to state any fact necessary to keep the statements
contained herein or therein from being misleading in a manner that
would constitute a Material Adverse Effect.
4. REPRESENTATIONS AND WARRANTIES OF PHOENIX
Phoenix represents and warrants to the Vendors that:
4.1 DUE INCORPORATION, ETC.
Phoenix is duly incorporated, validly exists and is in good
standing under the Canada Business Corporations Act and has all
necessary corporate capacity and power to own and lease its property
and assets and to carry on the business now conducted by it.
4.2 SHARE CAPITAL OF PHOENIX
The authorized share capital of Phoenix is composed of an
unlimited number of common shares and an unlimited number of preferred
shares issuable in series of which, as at August 4, 1997, there were
19,601,226 common shares issued and outstanding.
4.3 OPTIONS
Other than the options to acquire common shares of Phoenix
granted pursuant to Phoenix' Key Employee Share Option Plan and shares
to be issued to Xxxx Xxxx under an earn-out formula which has been
disclosed to the Vendors, Phoenix does not have any rights or options
to subscribe for, or any warrants or other agreements providing for or
requiring the issuance of common shares or preferred shares.
4.4 DUE AUTHORIZATION
All necessary corporate action has been taken by Phoenix to
authorize the execution of this Agreement and the consummation of the
transactions contemplated hereby, including the issuance of the Phoenix
Shares as fully paid and non-assessable in consideration for the
purchase of the Shares and Debentures.
4.5 CONFORMITY WITH APPLICABLE SECURITIES LAWS
All documents have been filed, all requisite proceedings have
been taken and all approvals, exemptions, consents, orders and
authorizations required under applicable securities laws have been
obtained in order to issue the Phoenix Shares issued hereunder and
Phoenix is in full compliance with its continuous disclosure
obligations under applicable securities laws.
- 23 -
4.6 STOCK EXCHANGE APPROVALS
The listing of the Phoenix Shares on The Montreal Exchange and
the Toronto Stock Exchange has been approved by such exchanges, subject
to Phoenix fulfilling all of the standard requirements of such
exchanges before September 4, 1997.
5. POOLING OF INTERESTS
5.1 ACCOUNTING TREATMENT
Phoenix, ITEM Holding and the Vendors intend and desire for
the transactions contemplated by this Agreement to qualify for "pooling
of interests" treatment for US GAAP purposes in accordance with
Accounting Principles Board Opinion No. 16.
5.2 POOLING LETTERS
On or prior to the Completion Date, ITEM Holding shall cause
to be executed and delivered to Ernst & Young, auditors to Phoenix, and
to Phoenix a letter or letters, dated the Completion Date, from ITEM
Holding's management in form and substance reasonably satisfactory to
Phoenix and its auditors relating to "pooling of interests" accounting.
On or prior to the Completion Date, Phoenix shall deliver to Ernst &
Young, auditors to Phoenix, a letter or letters, dated the Completion
Date, from Phoenix's management in form and substance reasonably
satisfactory to its auditors relating to "pooling of interests"
accounting.
5.3 OPINIONS OF ACCOUNTANTS AND AUDITORS OF PHOENIX
On or prior to the Completion Date, Phoenix shall have
received a letter, dated the Completion Date, from Ernst & Young,
accountants and auditors to Phoenix, in form and substance satisfactory
to Phoenix, regarding the appropriateness of pooling of interests
treatment for the transactions contemplated herein.
5.4 OPINIONS OF ACCOUNTANTS AND AUDITORS OF ITEM HOLDING
On or prior to the Completion Date, ITEM Holding and Phoenix
shall have received a letter, dated the Completion Date, from Xxxxxx
Xxxxx et Associes, commissaire aux comptes accountants and auditors of
ITEM Holding, attesting to the validity of the letter referred to in
Section 5.2, in form and substance satisfactory to ITEM Holding and
Phoenix.
5.5 PLACEMENT AND STOCK TRANSFER RESTRICTIONS AND RELATED MATTERS
Each party to this Agreement agrees that from and after the
date of this Agreement, such party shall not knowingly take any action,
or knowingly fail to take any action, which action or failure is
reasonably likely to disqualify the transactions contemplated by this
Agreement from pooling of interests accounting treatment by Phoenix,
and that such party shall take all reasonable actions necessary to
cause the transactions contemplated by this Agreement to qualify as a
pooling of interest, if such characterization shall be jeopardized by
action taken by such party. Without limiting the foregoing, each Vendor
who is a Pooling Affiliate of ITEM Holding agrees that such Vendor
shall not
- 24 -
sell, transfer, pledge, or otherwise dispose of such Vendor's interests
in or reduce such Vendor's risk relative to any of the Phoenix Shares
until Phoenix shall have published financial results (including
combined sales and net income) covering at least thirty (30) days of
combined operations of Phoenix and ITEM Holding after the Completion
Date. As soon as reasonably practicable following the first full month
of combined operations of Phoenix and ITEM Holding after the Completion
Date, Phoenix shall prepare and publish such financial results for the
first full month of operations following the Completion Date. Each of
the Vendors and ITEM Holding acknowledge and agree with Phoenix that
none of the Vendors or ITEM Holding is a party to any agreement or
arrangement among themselves or with third parties regarding the
transactions contemplated by this Agreement or the subject matter
hereof.
Prior to the Completion Date, Phoenix shall deliver to ITEM
Holding a list of names and addresses of those persons who are or may
be, in Phoenix's reasonable judgement, Affiliates of Phoenix within the
meaning of Rule 145 of the rules and regulations promulgated under the
Securities Act or applicable SEC accounting releases with respect to
pooling of interests accounting treatment (each such persons, a
"Pooling Affiliate"). Phoenix also shall provide ITEM Holding with such
information and documents as ITEM Holding shall reasonably request for
purposes of reviewing such list. Prior to the Completion Date, Phoenix
shall deliver to ITEM Holding an affiliate letter, in form and
substance reasonably satisfactory to ITEM Holding, executed by each of
the Pooling Affiliates identified in the foregoing list.
Prior to the Completion Date, ITEM Holding shall deliver to
Phoenix a list of names and addresses of those persons who are or may
be, in ITEM Holding's reasonable judgment, Pooling Affiliates of ITEM
Holding. ITEM Holding also shall provide Phoenix with such information
and documents as Phoenix shall reasonably request for purposes of
reviewing such list. Prior to the Completion Date, ITEM Holding shall
deliver to Phoenix an affiliate letter, in form and substance
reasonably satisfactory to Phoenix, executed by each of the Pooling
Affiliate of ITEM Holding identified in the foregoing list.
6. EMPLOYMENT AGREEMENT
6.1 EMPLOYMENT AGREEMENT WITH XXXXXX XXXXX
Xxxxxx Xxxxx and Phoenix shall execute an employment
agreement, providing for Xxxxxx Steru's employment as President of
Phoenix Europe and ITEM SA (the name of which will be changed to
Phoenix International (France)), which shall, among other things,
include a non-competition provision for a period ending two years after
the termination of his employment.
7. SURVIVAL OF REPRESENTATIONS; INDEMNITY
7.1 SURVIVAL OF REPRESENTATIONS
The respective representations and warranties of the Vendors
contained in this Agreement or in any schedule attached hereto shall
survive the consummation of the transactions contemplated hereby and
shall remain in full force and effect notwithstanding any investigation
or examination of, or knowledge with respect to, the subject matter
thereof by or on behalf of Phoenix until the earlier of November 30,
1997 or the date of completion of the audit of the combined financial
statements of
- 25 -
Phoenix and ITEM Holding as at August 31,1997 (the period ending on
such date being referred to herein as the "Representations Period"),
except that such representations and warranties shall survive
indefinitely in the event of fraud with respect thereto. No claim for
indemnification pursuant to Section 7.2.1 below may be brought after
the expiration of the Representations Period, except for claims made in
good faith in writing prior to such expiration and setting forth in
reasonable detail the claim, regardless of whether any action or demand
has been commenced against Phoenix (it being understood without
limitation, that any and all Losses (as defined below) arising after
the expiration of the Representations Period shall be recoverable upon
notice properly given prior to the expiration of the Representations
Period in accordance with this Section 7.1). The representations and
warranties of Phoenix contained in this Agreement or in any schedule
attached hereto shall terminate upon and not survive the Completion
Date, except in the event of fraud by Phoenix with respect thereto, in
which case they shall survive indefinitely.
7.2 INDEMNIFICATION
7.2.1 From and after the Completion Date, Phoenix
and its Affiliates (including ITEM Holding,
the Subsidiaries and the Significant
Investments) and all of their respective
officers, directors, employees, agents and
shareholders (each, an "Indemnitee") shall
be defended, indemnified and held harmless
by the Vendors pursuant to this Agreement
and the Escrow Agreement to the full extent
permitted by law, from and against any and
all losses, claims, actions, damages,
liabilities, costs and expenses (including
attorneys' fees and expenses) (collectively,
"Losses") relating to or arising from or in
connection with (i) any misrepresentation or
any non-fulfilment of any representation,
warranty, covenant, obligation or agreement
by any Vendor contained in or made pursuant
to this Agreement or any other document,
agreement, officer's certificate or other
certificate delivered to Phoenix in
connection with this Agreement, (ii) any
statement contained in Section 3 which
pertains to Significant Investments which
would be untrue if such statement were to be
made in respect of Verum TIL Occam, without
regard to any knowledge qualifications
contained in such statement, and (iii) the
enforcement by Phoenix of its rights
pursuant to this Section 7.2, or any
litigation, proceeding or investigation
relating to any of the foregoing. The
indemnification obligations of the Vendors
pursuant hereto shall be joint and not
solidary.
7.2.2 Notwithstanding the foregoing provisions of
this Section 7.2, but except with respect to
any Losses resulting from or arising out of
fraud or other intentional or knowing
misconduct or misrepresentation, (i) the
maximum aggregate recourse by the
Indemnitees pursuant to subsection 7.2.1
above shall not exceed the aggregate value
(calculated by adding together the opening
and closing prices of the common shares of
Phoenix on each of the Toronto Stock
Exchange and The Montreal Exchange for each
of the ten trading days preceding the
Completion Date, and dividing this sum by
40) of the Escrowed Securities (the
"Indemnity Cap"), (ii) the Indemnitees shall
not be entitled to indemnification under
subsection 7.2.1 above for any amount unless
and until the aggregate of all amounts for
which the Indemnitees otherwise would be
entitled to be indemnified exceeds FF
300,000 or its equivalent (in the
aggregate), after which the Indemnitees
shall be indemnified in full for the full
amount, up to the Indemnity Cap, and (iii)
the sole recourse of any Indemnitee in
respect of Losses (but not in respect of
fraud or other intentional or knowing
- 26 -
misconduct or misrepresentation) shall be
from, out of, and to the extent of the
Escrowed Securities. Any indemnification
shall be payable by the return of Escrowed
Securities to Phoenix in accordance with the
provisions of the Escrow Agreement. In
particular, the number of Escrowed Shares to
be remitted to Phoenix in payment of any
indemnification obligation shall be
calculated on the basis of the average price
of the Escrowed Shares obtained by adding
together the opening and closing prices of
the common shares of Phoenix on each of the
Toronto Stock Exchange and The Montreal
Exchange for each of the ten trading days
preceding the Completion Date, and dividing
this sum by 40. All dividends or other
distributions received by a Vendor in
respect of common shares of Phoenix which
are remitted to Phoenix in satisfaction of
an indemnification obligation under this
Section 7, shall also be repaid to Phoenix
at the time of payment of indemnification.
For purposes of determining whether the
aggregate of all amounts for which the
Indemnitees would otherwise be entitled to
be indemnified exceed FF 300,000 or its
equivalent, the amount of each indemnifiable
claim and the aggregate amount of all
indemnifiable claims shall not be limited by
use of the term "material" or of the defined
term Material Adverse Effect or its related
forms in any representations or warranties,
or by the establishment of any dollar
threshold in any representation or warranty
for inclusion of any event or matter herein.
7.2.3 Notwithstanding any other provision of this
Agreement, as of and after the Completion
Date, ITEM Holding shall not have any
liability under this Agreement, and no
Vendor shall threaten or bring any claim or
action whatsoever against for contribution
to any amounts payable under this Section
7.2 by such Vendor.
8. SPECIFIC CONTINGENCIES
The Vendors hereby undertake to indemnify Phoenix in respect
of the occurrence, in whole or in part, of any of the specific
contingencies described below, each of which exists at the Completion
Date and will only be finally resolved or determined at some time in
the future. The provision for these contingencies is not made as an
attempt to anticipate future events, but merely to provide for a
reasonable period of time within which such contingencies may be
resolved. Any indemnification pursuant to this Section shall be payable
by all of the Vendors, pro rata to the number of common shares of
Phoenix issuable to each of them pursuant to this Agreement.
In the event of the realization of any of the specific
contingencies contemplated in this Section 8, the Vendors shall
indemnify Phoenix by remitting to Phoenix for cancellation such number
of common shares of Phoenix as corresponds to the amount of
indemnification owed (calculated on the basis of the average price of
Phoenix common shares obtained by adding together the opening and
closing prices of the common shares of Phoenix on each of the Toronto
Stock Exchange and The Montreal Exchange for each of the ten trading
days preceding the Completion Date, and dividing this sum by 40). Any
obligation to remit common shares of Phoenix upon the occurrence of a
specific contingency shall be satisfied by return of Escrowed Shares in
accordance with the Escrow Agreement. In the event that there does not
remain a sufficient number of Escrowed Shares or Proceeds to satisfy an
an obligation under this Section, the balance of such indemnification
obligation shall be paid in cash. All dividends or other distributions
received by a Vendor in respect of common
- 27 -
shares of Phoenix which are remitted to Phoenix in satisfaction of an
indemnification obligation under this Section 8, shall also be repaid
to Phoenix at the time of payment of indemnification.
8.1 Any tax liability in France related to the dissolution of ITEM
Phase I and its withdrawal from the relevant tax consolidation
regime. The maximum amount payable in respect of this
contingency is $55,000 plus any interest due to the relevant
taxation authorities from the date of this Agreement to the
final settlement of this specific contingency. Notwithstanding
any other provision of this Agreement, the Vendors'
indemnification obligation with respect to this contingency
shall survive until any possible related claims by the
relevant taxation authorities have been prescribed under
applicable law.
8.2 Any tax liability in France in respect of the granting of
certain indirect subsidies to nonmembers of the consolidation
tax regime and the failure to properly report certain indirect
subsidies to members of the consolidation tax regime. The
maximum amount payable in respect of this contingency is
$55,000 plus any interest due to the relevant taxation
authorities from the date of this Agreement to the final
settlement of this specific contingency. Notwithstanding any
other provision of this Agreement, the Vendors'
indemnification obligation with respect to this contingency
shall survive until any possible related claims by the
relevant taxation authorities have been prescribed under
applicable law.
8.3 Any tax liability in Spain with respect to certain commissions
paid by ITEM Pharma to Pharma Consult SA during 1995 and 1996.
The maximum amount payable in respect of this contingency is
$70,000 plus any interest due to the relevant taxation
authorities from the date of this Agreement to the final
settlement of this specific contingency. Notwithstanding any
other provision of this Agreement, the Vendors'
indemnification obligation with respect to this contingency
shall survive until any possible related claims by the
relevant taxation authorities have been prescribed under
applicable law.
8.4 Any tax liability in France or the United Kingdom with respect
to the non-deductibility of certain expenses incurred by GEIE
Verum and rebilled to ITEM Holding or any of its Subsidiaries
or Significant Investments. The maximum amount payable in
respect of this contingency is $355,000 plus any interest due
to the relevant taxation authorities from the date of this
Agreement to the final settlement of this specific
contingency. Notwithstanding any other provision of this
Agreement, the Vendors' indemnification obligation with
respect to this contingency shall survive until any possible
related claims by the relevant taxation authorities have been
prescribed under applicable law.
- 28 -
9. NOTICES
Any demand, notice or other communication to be given in connection
with this Agreement shall be given in writing and shall be given by personal
delivery, by registered mail or by electronic means of communication addressed
to the recipient as follows:
9.1 To Phoenix:
Phoenix International Life Sciences Inc.
0000, Xxxxx Xxxxxx
Xxxxx-Xxxxxxx, Xxxxxx
X0X 0X0 Xxxxxx
Telecopier No.: (000) 000-0000
ATTENTION: XXXX-XXXX XXXXX
9.2 To ITEM Holding :
ITEM Holding S.A.
00, xxxxxx xx Xxxxxxxxxxxxx
00000 Xx Xxxxxxx-Xxxxxxx Xxxxx
Xxxxxx
Telecopier No.: 00.00.00.00.00
ATTENTION: XXXXXX XXXXX
9.3 To Xxxxxx Xxxxx or Xxxxxxxxx Xxxxx:
Xxxxxx Xxxxx or Xxxxxxxxx Xxxxx
00, xxx Xxxxxx xx Xxxxx
00000 Xxxxx
Xxxxxx
Telecopier No.: 00.00.00.00.00
- 29 -
9.4 To Xxxxxxxx Xxxxxxx:
Xxxxxxxx Xxxxxxx
xxx do Arco Carvalhao Xx. 00
0xx xxx.
0000 Xxxxxx
Xxxxxxxx
9.5 To Xxxxx Xxxxxxx:
Xxxxx Xxxxxxx
34, avenue de la Xxxxx Xxxxx
00000, Xx. Xxxxx
Xxxxxx
Telecopier No.: 00.00.00.00.00
9.6 To Siparex Developpement:
Siparex Developpement
000, xxx xx xx Xxxxxx
00000 Xxxxx
Xxxxxx
Attention: Christian d'Argoubet
Telecopier No.: 00.00.00.00.00
9.7 To BNP Developpement:
BNP Developpement
0, xxxxxxxxx Xxxxxxxxx
00000 Xxxxx
Xxxxxx
Attention: Xxxxxxx Xxxxxxxxx
Telecopier No.: 00.00.00.00.00
- 30 -
9.8 To Epicea:
EPICEA
00-00, xxx xx xx Xxxxxxxxxx
00000 Xxxxx
Xxxxxx
Attention: Xxxxxx Xxxxxxxx
Telecopier No.: 00.00.00.00.00
9.9 To XX.XX.XX.:
Xxxxxx Xxxxxx Xxxxx 000
0000 Xxxxxxxxx
Belgique
Attention: Xxxxxx Xxxxx
Telecopier No.: (00) 0.000.00.00
9.10 To Natio Fonds Venture:
Natio Fonds Venture II
00, xxx Xxxxxxxx
00000 Xxxxx
Xxxxxx
Attention: Xxxxxxxxx Xxxxxxxxx
Telecopier No.: 00.00.00.00.00
10. MODIFICATION
All modifications or amendments of any provision of this Agreement
shall be effective only if the same shall be in writing and then shall be
effective only in the specific instance and for the purpose for which given.
11. WAIVER
No failure to exercise, and no delay in exercising, on the part of a
party hereto, any right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right. No waiver of any provision of this
Agreement shall be effective unless in writing. No notice or demand given in any
case shall constitute a waiver of the right to take other action in the same,
similar or other instances without such notice or demand.
- 31 -
12. CONFIDENTIALITY
The parties agree to treat this Agreement as confidential and not to
disclose its contents to third parties other than their advisers, except to the
extent necessary to enforce performance of obligations hereunder, or as is
required to comply with applicable laws or regulations, including regulations of
any stock exchange on which the securities of Phoenix are listed following
consultations with Xxxxxx Xxxxx.
13. FURTHER ASSURANCES
The parties shall, with all reasonable diligence, do all such things
and provide all such reasonable assurances as may be required to consummate the
transactions contemplated hereby, and each party shall provide such further
documents or instruments required by another party as may be reasonably
necessary or desirable to give effect to the purpose of this Agreement and to
carry out its provisions.
14. GOVERNING LAWS
This Agreement shall be governed by the laws of the Province of Quebec
and the laws of Canada applicable therein.
15. ARBITRATION
Any dispute which arises in the course of or following the performance
of this Agreement or any of the transactions contemplated herein will be
definitively settled under the auspices of The Quebec National and International
Commercial Arbitration Centre, by means of arbitration and to the exclusion of
courts of law, in accordance with its General Commercial Arbitration Rules in
force at the time this Agreement is signed and to which the parties declare they
have adhered.
16. GENERAL
The invalidity or unenforceability of any term or provision hereof
shall not affect the validity or enforceability of any other term or provision
hereof. The headings in this Agreement are for convenience of reference only and
shall not alter or otherwise affect the meaning hereof. This Agreement and the
other documents and instruments referred to herein constitute the entire
understanding of the parties hereto with respect to the subject matter hereof
and thereof and supersede all present and prior agreements, whether written or
oral. No investigation made by or on behalf of a party hereto shall mitigate,
diminish or affect the representations and warranties made herein by the
Vendors. This Agreement may be executed in any number of counterparts which
together shall constitute one instrument and shall be governed by and construed
in accordance with the laws of the Province of Quebec and the laws of Canada
applicable therein, and shall bind and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, personal
representatives, successors and assigns. The parties hereto have expressly
required that this Agreement and all documents and notices related hereto be
drafted in English. LES PARTIES AUX PRESENTES ONT EXPRESSEMENT EXIGE QUE LE
PRESENT CONTRAT ET TOUS LES DOCUMENTS ET AVIS Y AFFERENTS SOIENT REDIGES EN
ANGLAIS.
- 32 -
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be duly
executed as of the Completion Date.
PHOENIX INTERNATIONAL LIFE SCIENCES INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx
Title:
--------------------------------------------
Chairman and Chief Executive Officer
By: /s/ Xxxx-Xxxx Xxxxx
---------------------------------------------
Xxxx-Xxxx Xxxxx
Title:
--------------------------------------------
Senior Vice-President
and Chief Financial Officer
ITEM HOLDING S.A.
By: /s/ Xxxxxx Xxxxx
---------------------------------------------
Xxxxxx Xxxxx
Title:
--------------------------------------------
/s/ Xxxxxx Xxxxx
--------------------------------------------------
XXXXXX XXXXX
/s/ Xxxxxxxxx Xxxxx
--------------------------------------------------
XXXXXXXXX XXXXX
/s/ Xxxxxxxx Xxxxxxx
--------------------------------------------------
XXXXXXXX MARTINS
- 33 -
/s/ Xxxxx Xxxxxxx
--------------------------------------------------
XXXXX XXXXXXX
XX.XX.XX.
By: /s/ Xxxxxx Xxxxx
-----------------------------------------------
Xxxxxx Xxxxx
Title:
--------------------------------------------
BNP DEVELOPPEMENT
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------------
Xxxxxxx Xxxxxxxxx
Title:
--------------------------------------------
SIPAREX DEVELOPPEMENT
By: /s/ Christian d'Argoubet
-----------------------------------------------
Christian d'Argoubet
Title:
--------------------------------------------
EPICEA
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------------
Xxxxxx Xxxxxxxx
Title:
--------------------------------------------
NATIO FONDS VENTURE II
By: /s/ Xxxxxxxxx Xxxxxxxxx
-----------------------------------------------
Xxxxxxxxx Xxxxxxxxx
Title:
--------------------------------------------
ESCROW AGREEMENT dated as of August 7, 1997
AMONG: PHOENIX INTERNATIONAL LIFE SCIENCES INC., a corporation incorporated
under the CANADA BUSINESS CORPORATIONS ACT. having its head office at
0000 Xxxxx Xxxxxx, Xxxxx-Xxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0, herein
acting and represented by Xxxx X. Xxxxxx and Xxxx-Xxxx Xxxxx, its duly
authorized representatives;
(hereinafter "Phoenix")
AND: XXXXXX XXXXX, executive, residing at 00, xxx Xxxxxx xx Xxxxx, 00000
Xxxxx, married under the matrimonial regime of COMMUNAUTE LEGALE to
Xxxxxxxxx Xxxxx;
(hereinafter "Xxxxxx Xxxxx")
AND: XXXXXXXXX XXXXX, executive, residing at 00, xxx Xxxxxx xx Xxxxx, 00000
Xxxxx, married under the matrimonial regime of COMMUNAUTE LEGALE to
Xxxxxx Xxxxx;
(hereinafter "Xxxxxxxxx Xxxxx")
AND: XX.XX.XX., a Belgian corporation having its head office at Xxxxxx
Xxxxxx Xxxxx 000, 0000 Xxxxxxxxx, Xxxxxxxx, herein acting and
represented by its duly authorized representative, Xxxxxx Xxxxx;
(hereinafter "Codema")
AND: XXXXXXXX MARTINS, executive, residing at rua do Arco Carvalhao N1 14,
3rd esq., 000X Xxxxxx, Xxxxxxxx, married under the matrimonial regime
of COMMUNAUTE LEGALE TO Xxxxxxx Xxxxxx;
(hereinafter "Xxxxxxxx Martins')
AND: XXXXX XXXXXXX, executive, residing at 00, xxxxxx xx xx Xxxxx Xxxxx,
00000 Saint Cloud, married under the matrimonial regime of COMMUNAUTE
UNIVERSELLE to Xxxxxx Xxxxxx;
(hereinafter "Xxxxx Xxxxxxx")
AND: BNP DEVELOPPEMENT, a French SOCIETE ANONYME, with issued capital of FF
500,000,000, registered in the Paris commercial and companies register
under number B348 540 592 and having its head
office at 0, xxxxxxxxx Xxxxxxxxx, 00000 Xxxxx, herein acting and
represented by its duly authorized representative, Xxxxxxx Xxxxxxxxx;
(hereinafter "BNP Developpement")
AND: SEPAREX DEVELOPPEMENT, a French SOIETE EN COMMANDITE PAR ACTIONS, with
issued capital of FF 196,489,400, registered in the Lyon commercial
and companies register under number B378 213 375 and having its head
office at 000, xxx xx xx Xxxxxx, 00000 Xxxxx, herein acting and
represented by its duly authorized representative, Christian
D'Argoubert;
(hereinafter "Siparex Developpement")
AND: EPICEA, a French SOCIETE ANONYME, with issued capital of FF
67,000,000, registered in the Paris commercial and companies register
under number B319 308 615 and having its head office at 00-00, xxx xx
xx Xxxxxxxxxx, 00000 Xxxxx, herein acting and represented by its duly
authorized representative, Xxxxxx Xxxxxxxx;
(hereinafter "Epicea")
AND: NATIO FONDS VENTURE II, a French fonds commun de placements a risques,
herein acting and represented by its manager, BNP Gestion , a French
SOCIETE ANONYME, with capital of FF 64,919,400, registered in the
Paris commercial and companies register under number B682001904 and
having its head office at 000, xxx xx Xxxxxxxx Xxxxxxxxxxxx, 00000,
Xxxxx, Cedex 10, herein acting and represented by its duly authorized
representatives and Xxxxxxxxx Xxxxxxxxx;
(hereinafter "Natio Fonds Venture")
AND: MONTREAL TRUST COMPANY, 0000 XxXxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx,
X0X 0X0, as escrow agent, herein represented by its duly authorized
representative, Xxxxx Xxxxxxx Xx.
(hereinafter the "Escrow Agent").
WHEREAS Phoenix and the Vendors are parties to a share and
debenture purchase agreement dated August 7, 1997 (the "Purchase Agreement").
WHEREAS the Purchase Agreement provides that certain shares of Phoenix
issued to the Vendors pursuant thereto are to be held in escrow for the purposes
described therein.
NOW THEREFORE the parties hereby agree as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 Whenever used in this Agreement:
1.1.1 "Affiliate" means any of Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Codema and
Xxxxx Xxxxxxx, and "Affiliates" means more than one of them.
1.1.2 1.1.2 "Claim" means any claim by Phoenix against the Vendors under
Section 7.2 or a claim for a Specific Contingency under Section 8 of
the Purchase Agreement;
1.1.3 "Distributions" has the meaning ascribed thereto in Section 3.1
hereof,
1.1.4 "Escrowed Shares" has the meaning ascribed thereto in Section 2.1
hereof;
1.1.5 "Escrowed Share Price" means, in respect of any Claim set forth in a
Notice of Claim, the amount obtained by adding the opening and closing
prices of the common shares of Phoenix on each of the Montreal
Exchange and The Toronto Stock Exchange for the ten trading days
preceding the date of execution of the Purchase Agreement, divided by
40;
1.1.6 "Notice of Claim" means a written notice of any Claim given by
Phoenix setting forth the details of each Claim referred to therein
including the amount thereof, if known to Phoenix, or Phoenix's
reasonable estimate thereof, as well as the provisions of the Purchase
Agreement upon which such Claim is based;
1.1.7 "Non-Affiliate" means Xxxxxxxx Xxxxxxx, BNP Developpement, Siparex
Developpement, Epicea and Natio Fonds Venture II, and "Non-Affiliates"
means more than one of them.
3
1.1.8 "Objection" means, in respect of any Claim, any objection raised in
the Response by any of the Vendors to such Claim;
1.1.9 "Proceeds" has the meaning ascribed thereto in Section 3.2 hereof;
1.1.10 "Purchase Agreement" has the meaning ascribed thereto in the
preamble to this Agreement;
1.1.11 "Released Shares" has the meaning ascribed thereto in Section
3.5.1.1 hereof;
1.1.12 "Response" means, in respect of any Claim, the written response of
any of the Vendors indicating whether it accepts or disputes such
Claim; and
1.1.13 "Specific Contingency" means any of the specific contingencies
referred to in Section 8 of the Purchase Agreement;
1.1.14 "Vendors" means Xxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Codema, Xxxxxxxx
Xxxxxxx, Xxxxx Porsolt, BNP Developpement, Siparex Developpement,
Epicea and Natio Fonds Venture.
1.2 Each capitalized term used in this Agreement but not defined herein has the
meaning ascribed thereto in the Purchase Agreement.
1.3 In the event of (i) any subdivision, consolidation or reclassification of
the class of shares comprising the Escrowed Shares or (ii) any
REORGANIZATION of the share capital of Phoenix affecting the Escrowed
Shares or (iii) the amalgamation of Phoenix with any other company, the
number of Escrowed Shares and Escrowed Share Price shall be adjusted, if
required, so that none of the parties hereto shall be in a position less
favourable to it than as provided in this Agreement as a result of any of
the foregoing actions.
1.4 For all purposes of this Agreement, the amount of any Claim in a currency
other than Canadian dollars shall be converted to Canadian dollars at the
exchange rate between Canadian and such currency shall be the "Spot Rate"
of the alternate currency on the business day preceding the day as of which
the conversion from one currency to the other is to be effected, as
reported in the Financial Post on that day.
1.5 If any calculation hereunder of the applicable number of Escrowed Shares
results in fractional shares, the result shall be rounded up or
4
down, as the case may be, to the nearest whole number and, if such result
represents exactly one-half of a whole number, then such fraction shall be
rounded up to the next whole number.
2 ESTABLISHMENT OF ESCROW
2.1 Phoenix hereby delivers in escrow to the Escrow Agent certificates
representing an aggregate of 469,014 common shares of Phoenix registered in
the name of the Escrow Agent, as escrow agent (the "Escrowed Shares"). The
Vendors' interests in the Escrowed Shares are as set forth below:
VENDOR ESCROWED SHARES
Xxxxxx Xxxxx 2,079
Xxxxxxxxx Xxxxx 3
Codema 331,550
Xxxxxxxx Martins 7,968
Xxxxx Xxxxxxx 37,062
Siparex Developpement 37,253
BNP Developpement 26,889
Epicea 21,382
Natio Fonds Venture 4,828
2.2 The Escrow Agent hereby accepts delivery of the Escrowed Shares and agrees
to act as escrow agent and to hold, safeguard and release the Escrowed
Shares in accordance with the provisions of this Agreement. The Escrowed
Shares shall not be sold, assigned, hypothecated, alienated, released from
escrow, transferred within escrow or dealt with in any manner whatsoever
except as provided in this Agreement.
2.3 Notwithstanding the registration of the Escrowed Shares in the name of the
Escrow Agent, the Vendors shall, subject to the provisions hereof, remain
the owners thereof in the proportion contemplated by Section 2.1 hereof and
be entitled to the exercise of all voting rights related thereto and to
receive all dividends, income and other distributions in respect thereof
(collectively, "Distributions"). In the event that any Escrowed
5
Shares are remitted to Phoenix for cancellation pursuant to the provisions
of Section 3 hereof, the Vendors shall repay to Phoenix any Distributions
received in respect of such Escrowed Shares.
3 INSTRUCTIONS TO ESCROW AGENT
3.1 At any time while the Escrowed Shares are held by the Escrow Agent, and
provided that the Escrowed Shares are not then subject to any restrictions
on transfer imposed by any Regulatory Authority, a Non-Affiliate my
instruct the Escrow Agent in writing to sell all or part of such
Non-Affiliate's portion of the Escrowed Shares. Upon receipt of such
written instruction, the Escrow Agent shall sell such Escrowed Shares on
the open market and shall retain the proceeds of sale, less any expenses
incurred in realizing such sale (the "Proceeds") as escrowed property for
such Non-Affiliate. The Escrow Agent shall invest such Proceeds in an
interest-bearing account for the duration of the escrow. The Escrow Agent
shall keep complete records of any such sales of Escrowed Shares.
3.2 At any time after receipt by the Escrow Agent of written notice by Phoenix
of the release, in the format prescribed by the SEC, of at least 30 days of
post-combination financial results of Phoenix and ITEM Holding, and
provided that the Escrowed Shares are not then subject to any restrictions
on transfer imposed by any Regulatory Authority, an Affiliate may also
instruct the Escrow Agent to sell all or part of their portion of the
Escrowed Shares in the manner set forth in section 3.2. In such event, the
Escrow Agent shall proceed as set forth in section 3.2.
3.3 Whenever Phoenix has a Claim it shall give a Notice of Claim in respect
thereof to Vendors and the Escrow Agent. Upon receipt of a Notice of Claim,
the Escrow Agent shall immediately reserve for distribution in accordance
with the provisions of paragraph 3.4 hereof (but shall not release from
escrow except in accordance with the provisions hereof) that number of the
Escrowed Shares which is equal in value to the amount provided for in the
Notice of Claim, calculated on the basis of the Escrowed Share Price for
such Notice of Claim; provided that, notwithstanding anything contained
herein, the Escrow Agent shall not reserve any shares from the Escrowed
Shares in respect of any Claim until the aggregate amount claimed by
Phoenix under all Notices of Claim exceeds the amount of the Indemnity Cap
set forth in paragraph 7.2.2 of the Purchase Agreement.
3.4 Within ten (10) days of receipt of a Notice of Claim, the Vendors (or any
of them) shall give to Phoenix and the Escrow Agent a Response with
6
respect to each Claim set forth therein: If:
3.4.1 the Response indicates that the Vendors accept a Claim set forth in the
Notice of Claim, or if the Escrow Agent does not receive a Response with
respect to a Claim within said ten (10) day period, the Vendors shall be
deemed to have irrevocably consented to each Claim so accepted or in
respect of which no Response is so received, as made, and the Escrow Agent
shall forthwith give written notice thereof to Phoenix:
3.4.1.1 setting forth the total amount of all Claims which have been
consented. to and the number of shares from the Escrowed Shares to be
released from escrow for the benefit of Phoenix (the "Released
Shares"), being that number of the Escrowed Shares which is equal in
value to the amount of the admitted Claims set forth in such Notice of
Claim. calculated on the basis of the Escrowed Share Price for such
Notice of Claim; and
3.4.1.2 surrender for cancellation to Phoenix the share certificate(s) in
its possession representing the Released Shares, duly endorsed for
transfer, and the Escrow Agent shall retain in its possession the
other share certificate(s) representing the balance of the Escrowed
Shares, if any, to be held by it in escrow and dealt with in
accordance with the terms hereof, or
7
3.4.2 the Response indicates that the Vendors (or any of them) dispute a Claim
set forth in the Notice of Claim (whether or not arbitration proceedings
have been instituted), the Escrow Agent shall retain in its possession and
continue to hold in escrow that number of the Escrowed Shares which is
equal in value to the amount provided for in the disputed Claims,
calculated on the basis of the Escrowed Share Price for such Notice of
Claim:
3.4.2.1 until the Escrow Agent receives a joint written notice from Phoenix
and the Vendors directing the Escrow Agent as to the manner in which
such Escrowed Shares and the share certificate(s) representing same
are to be dealt with, in which case the Escrow Agent shall deal with
same in accordance with such joint written instructions; or
3.4.2.2 in the absence of such a joint written notice within ten (IO)
business days of the Escrow Agent's receipt of the Response, the
Escrow Agent shall deal with such Escrowed Shares and the share
certificates) representing same in accordance with a final arbitration
order in respect of such disputed Claim(s) pursuant to the arbitration
contemplated by Section 12 hereof. Any arbitration order shall be
accompanied by a legal opinion by counsel for the presenting party
satisfactory to the Escrow Agent to the effect that the said order is
final and non-appealable.
3.5 If, at the time of receipt by the Escrow Agent of any Notice of Claims as
provided for in section 3.4 hereof, the number of Escrowed Shares remaining
in escrow for the account of any Vendor is insufficient to meet such
Vendor's pro rata portion of the number of Released Shares to be remitted
to Phoenix, the balance of such Vendor's pro rata portion of the admitted
Claims shall be satisfied by payment in cash from the Proceeds of those
Escrowed Shares sold by the Escrow Agent at the direction of such Vendor
pursuant to Section 3.1 or 3.2 hereof.
3.6 On the earlier of (i) November 30, 1997, or (ii) the date at which the
Escrow receives a notice from Phoenix confirming that the audit of the
combined financial statements of Phoenix and ITEM Holding as at August 31,
1997 has been completed, the Escrow Agent will deliver the Escrowed Shares
and all Distributions and Proceeds with the exception of such number of
Escrowed Shares as may be necessary to satisfy any obligation to indemnify
for a Specific Contingency which has not yet occurred. The notice from
Phoenix referred to above shall indicate the
8
maximum amount of Specific Contingencies which have not been prescribed or
definitively settled and the number of Escrowed Shares, calculated on the
basis of the Escrowed Share Price, which may not be released from the
escrow for such Specific Contingencies.
3.7 Upon receipt by the Escrow Agent of a written notice instructing it to
release, pro rata to the Vendors, such further number of Escrowed Shares as
is no longer necessary to satisfy remaining indemnification obligations in
respect of remaining Specific Contingencies which have been prescribed or
definitively settled, the Escrow Agent shall release such number of
Escrowed Shares to the Vendors, pro rata to their respective interests the
Escrowed Shares, Distributions and Proceeds, if any.
4 VOTING RIGHTS
4.1 The Escrow Agent shall provide to each of the Vendors a proxy entitling
such Vendor to vote those of the Escrowed Shares which are owned by it,
forthwith upon the Escrow Agent's receipt thereof in its capacity as
registered shareholder of Phoenix, in order to allow each Vendor to vote
its Escrowed Shares in the same manner as if it were the registered owner
thereof.
5 RIGHTS AND OBLIGATIONS OF THE ESCROW AGENT
5.1 The Escrow Agent is not a party to, and is not bound by, any provisions
which may be evidenced by, or arise out of, any agreement other than as
therein set forth under the express provisions of this Agreement.
5.2 The Escrow Agent acts hereunder as a depositary only and is not responsible
or liable in any manner whatever for the sufficiency, correctness,
genuineness or validity of any instrument deposited with it, or for the
form of execution of such instrument or for the identity or authority or
right of any person or party executing or depositing it. 1.1
5.3 The Escrow Agent shall not be under any duty to give the Escrowed Shares,
Distributions and Proceeds, if any, held by it hereunder any greater degree
of care than it gives its own similar property and shall not be required to
invest any funds held hereunder except as directed in this Agreement.
Uninvested funds held hereunder shall not earn or accrue interest.
5.4 The Escrow Agent shall not be liable, except for its own gross negligence
9
or willful misconduct and, except with respect to claims based upon such
gross negligence or willful misconduct that are successfully asserted
against the Escrow Agent, the other parties hereto shall solidarity
indemnify and hold harmless the Escrow Agent (and any successor Escrow
Agent) from and against any and all losses, liabilities, claims, actions,
damages and expenses, including reasonable attorneys' fees and
disbursements, arising out of and in connection with this Agreement.
Without limiting the foregoing, the Escrow Agent shall in no event be
liable in connection with its investment or reinvestment of any cash held
by it hereunder in good faith, in accordance with the terms hereof.
5.5 The Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The Escrow Agent may act in reliance upon any instrument
or signature believed by it to be genuine and may assume that the person
purporting to give receipt or advice or make any statement or execute any
document in connection with the provisions hereof has been duly authorized
to do so. The Escrow Agent may conclusively presume that the undersigned
representative of any party hereto which is an entity other than a natural
person has full power and authority to instruct the Escrow Agent on behalf
of that party unless written notice to the contrary is delivered to the
Escrow Agent.
5.6 The Escrow Agent may act pursuant to the advice of counsel with respect to
any matter relating to this Agreement and shall not be liable for any
action taken or omitted by it in good faith in accordance with such advice.
5.7 The Escrow Agent makes no representation as to the validity, value,
genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
5.8 The Escrow Agent shall not be called upon to advise any party as to the
wisdom in selling or retaining or taking or refraining from any action with
respect to any securities or other property deposited hereunder.
5.9 The Escrow Agent (and any successor Escrow Agent) may at any time resign as
such by delivering the Escrowed Shares, Distributions and Proceeds, if any,
to any successor Escrow Agent jointly designated by the other parties
hereto in writing, or to any court of competent jurisdiction, whereupon
Escrow Agent shall be discharged of and from any and all
10
further obligations arising in connection with this Agreement. The
resignation of Escrow Agent will take effect on the earlier of (a) the
appointment of a successor (including a court of competent jurisdiction)
or (b) the day which is 30 days after the date of delivery of its written
notice of resignation to the other parties hereto. If at that time Escrow
Agent has not received a designation of a successor Escrow Agent, Escrow
Agent's sole responsibility after that time shall be to retain and
safeguard the Escrowed Shares and Proceeds, if any, until receipt of a
designation of successor Escrow Agent or a joint written disposition
instruction by the other parties hereto or a final non-appealable order of
a court of competent jurisdiction.
5.10 Phoenix and the Vendors shall pay Escrow Agent compensation (as payment in
full) for the services to be rendered by Escrow Agent hereunder in the
amount of $500 at the time of execution of this Agreement and agree to
reimburse Escrow Agent for all reasonable expenses, disbursements and
advances incurred or made by Escrow Agent in performance of its duties
hereunder (including reasonable fees, expenses and disbursements of its
counsel).
6 LIMITED RESPONSIBILITY
This Agreement expressly sets forth all the duties of Escrow Agent with
respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this Agreement against the Escrow Agent. The
Escrow Agent shall not be bound by the provisions of any agreement among the
other parties hereto except this Agreement. No trust is created by this
Agreement and the Escrow Agent does not act in any capacity as a trustee.
7 NOTICES
All notices, consents, waivers and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt) provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
11
7.1 To Phoenix:
Phoenix International Life Sciences Inc.
0000, Xxxxx Xxxxxx
Xxxxx-Xxxxxxx, Xxxxxx
X0X 0X0 Xxxxxx
Telecopier No.: (000) 000-0000
Attention: Xxxx-Xxxx Xxxxx
7.2 To ITEM Holding:
ITEM Holding S.A.
00, xxxxxx xx Xxxxxxxxxxxxx
00000 Xx Xxxxxxx-Xxxxxxx Xxxxx
Xxxxxx
Telecopier No.: 00.00.00.00.00
Attention: Xxxxxx Xxxxx
7.3 To Xxxxxx Xxxxx or Xxxxxxxxx Xxxxx:
Xxxxxx Xxxxx or Dorninique Steru
00, xxx Xxxxxx xx Xxxxx
00000 Xxxxx
Xxxxxx
Telecopier No.: 00.00.00.00.00
7.4 To XX.XX.XX.:
Xxxxxx Xxxxxx Xxxxx 000
0000 Xxxxxxxxx
Xxxxxxxx
Telecopier No.: (00) 0.000.00.00
Attention: Xxxxxx Xxxxx
7.5 To Xxxxxxxx Martins:
12
Xxxxxxxx Xxxxxxx
xxx do Arco Carvalhao
N1 14, 3rd esq.
000X Xxxxxx
Xxxxxxxx
7.6 To Xxxxx Xxxxxxx:
Xxxxx Xxxxxxx
00, xxxxxx xx xx Xxxxx Xxxxx
00000 Xxxxx-Xxxxx
Xxxxxx
Telecopier No.: 00.00.00.00.00
7.7 To Siparex Developpement:
Siparex Developpement
000, xxx xx xx Xxxxxx
00000 Xxxxx
Xxxxxx
Telecopier No.: (33) 1.53-93.02.30
Attention: Christian d'Argoubet
7.8 To BNP Developpement:
BNP Developpement
0, xxxxxxxxx Xxxxxxxxx
00000 Xxxxx
Xxxxxx
Telecopier No.: 00.00.00.00.00
Attention: Xxxxxxx Xxxxxxxxx
7.9 To Epicea:
EPICEA
00-00,
xxx xx xx Xxxxxxxxxx
00000 Xxxxx
13
France
Telecopier No.: 00.00.00.00.00
Attention: Xxxxxx Xxxxxxxx
7.10 To Natio Fonds Venture II:
Natio Fonds Venture II
00, xxx Xxxxxxxx
00000 Xxxxx
Xxxxxx
Telecopier No.: 00.00.00.00.00
Attention: Xxxxxxxxx Xxxxxxxxx
8 GOVERNING LAW
This Agreement shall be governed by the laws of the Province of Quebec and
the laws of Canada applicable therein.
9 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original and all of which, when taken together, will be
deemed to constitute one and the same.
10 SECTION HEADINGS
The headings of sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation.
11 WAIVER
The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither the failure nor any delay by any party in exercising
any right, power, or privilege under this Agreement or the documents referred to
in this Agreement will operate as a waiver of such right, power, or privilege,
and no single or partial exercise of any such right, power,
14
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other parties, (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
12 ARBITRATION
Any dispute which arises in the course of or following the performance of
this Agreement or any of the transactions contemplated herein will be
definitively settled under the auspices of The Quebec National and International
Commercial Arbitration Centre, by means of arbitration and to the exclusion of
courts of law, in accordance with its General Commercial Arbitration Rules in
force at the time this Agreement is signed and to which the parties declare they
have adhered.
13 CONFIDENTIALITY
The parties agree to treat this Agreement as confidential and not to
disclose its contents to third parties other than their advisers, except to the
extent necessary to enforce performance of obligations hereunder, or as is
required to comply with applicable laws or regulations, including regulations of
any stock exchange on which the securities of Phoenix are listed, following
consultations with Xxxxxx Xxxxx.
14 FURTHER ASSURANCES
The parties shall, with all reasonable diligence, do all such things and
provide all such reasonable assurances as may be required to consummate the
transactions contemplated hereby, and each party shall provide such further
documents or instruments required by another party as may be reasonably
necessary or desirable to give effect to the purpose of this Agreement and to
carry out its provisions.
15 GENERAL
15
The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
This Agreement and the other documents and instruments referred to herein
constitute the entire understanding of the parties hereto with respect to the
subject matter hereof and thereof and supersede all present and prior
agreements, whether written or oral. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective heirs. executors,
administrators, personal representatives, successors and assigns. The parties
hereto have expressly required that this Agreement and all documents and notices
related hereto be drafted in English. LES PARTIES AUX PRESENTES ONT EXPRESSEMENT
EXIGE QUE LE PRESENT CONTRAT ET TOUS LES DOCUMENTS ET AVIS Y AFFERENTS SOIENT
REDIGES EN ANGLAIS.
16
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.
PHOENIX INTERNATIONAL LIFE
SCIENCES INC
By:/S/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Title:
------------------------------
Chairman and Chief Executive
Officer
By:/S/ Xxxx-Xxxx Xxxxx
---------------------------------
Xxxx-Xxxx Xxxxx
Title:
-----------------------------
Senior Vice President and Chief
Financial Officer
/S/ Xxxxxx Xxxxx
-----------------------------------
XXXXXX XXXXX
/S/ Xxxxxxxx Xxxxx
-----------------------------------
XXXXXXXXX XXXXX
XX.XX.XX.
By: /S/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
17
Title:
-----------------------------
/S/ Xxxxxxxx Xxxxxxx
-----------------------------------
XXXXXXXX MARTINS
/S/ Xxxxx Xxxxxxx
-----------------------------------
XXXXX XXXXXXX
BNP DEVELOPPEMENT
By: /S/ Xxxxxxx Xxxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxxx
Title:
-----------------------------
SIPAREX DEVELOPPEMENT
By: /S/ Christian D'Argoubert
--------------------------------
Christian d'Argoubert
Title:
-----------------------------
EPICEA
By: /S/ Xxxxxx Xxxxxxxx
--------------------------------
Xxxxxx Xxxxxxxx
Title:
-----------------------------
NATIO FONDS VENTURE II
By: /S/ Xxxxxxxx Xxxxxxxx
--------------------------------
Xxxxxxxxx Xxxxxxxxx
18
Title:
-----------------------------
MONTREAL TRUST COMPANY
By: /S/ Xxxxxx Xxxxxxx
--------------------------------
Xxxxxx Xxxxxxx
Title:
-----------------------------
19
