1
EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
(the "AGREEMENT")
between
The Shareholders of SYMPHAR S.A., i.e.,
Valorous Trading PTE Ltd hereinafter "SELLER 1"
Xxxxx Xxxxxxx hereinafter "SELLER 2"
Xxxx-Xxxxxxx Roguet hereinafter "SELLER 3"
Mong Xxx Xxxxxx hereinafter "SELLER 4"
Xxxx Niesor hereinafter "SELLER 5"
The Sellers 1 to 5 acting jointly and severally
and
ILEX ONCOLOGY, INC.
0000 Xxxxxxx Xxxx Xxxx.
XXX-Xxx Xxxxxxx, Xxxxx 00000-0000 hereinafter the "PARENT"
and
ILEX ACQUISITIONS, INC.
0000 Xxxxxxx Xxxx Xxxx.
XXX-Xxx Xxxxxxx, Xxxxx 00000-0000 hereinafter the "PURCHASER"
The Parent and the Purchaser acting
jointly and severally
regarding
SYMPHAR S.A.
000, Xxxxx xxx Xxxxxxx
XX-0000 Xxxxxxx hereinafter the "COMPANY"
XXXX & STAEHELIN
ATTORNEYS-AT-LAW
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TABLE OF CONTENTS
Definitions...................................................................................................5
Article I - Purchase and Sale of Shares.......................................................................8
I.1 Purchase and Sale......................................................................................8
I.2 Purchase Price Payment.................................................................................8
Article II - Closing..........................................................................................9
II.1 Place and Date........................................................................................9
II.2 Closing Documents.....................................................................................9
Article III - Representations and Warranties.................................................................10
III.1 Representations and Warranties of Purchaser and Parent..............................................10
(a) Organization of Purchaser.....................................................................10
(b) Authority.....................................................................................10
(a) Organization of Parent........................................................................11
(b) Authority.....................................................................................11
(c) Authorization for Exchange Shares.............................................................11
III.2 Representations and Warranties of Sellers...........................................................11
(a) Ownership of Sale Shares......................................................................11
(b) Organization of Company.......................................................................12
(c) Capitalization................................................................................12
(d) Share capital paid up.........................................................................12
(e) No contractual rights of third party over equity interest.....................................12
(f) Financial Statements..........................................................................12
(g) No Undisclosed Liabilities....................................................................13
(h) Accounts Receivable...........................................................................13
(i) Capital Improvements..........................................................................13
(j) Absence of Change.............................................................................14
(k) Insolvency....................................................................................15
(l) Taxes.........................................................................................15
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(m) Environment...................................................................................16
(n) Leases; Real Property.........................................................................17
(o) Condition of Assets; Sufficiency..............................................................18
(p) Intellectual Property Rights..................................................................18
(q) Contracts.....................................................................................19
(r) Litigation....................................................................................20
(s) Compliance with Laws..........................................................................20
(t) Insurance.....................................................................................21
(u) Products......................................................................................21
(v) Employees.....................................................................................22
(w) Professional and Social Welfare...............................................................22
(x) No collective bargaining......................................................................23
(y) Bank Accounts.................................................................................23
(z) Competing Interests...........................................................................23
(aa) Brokers and Finders...........................................................................23
(ab) Termination of agreements between the Company and the Sellers.................................24
(ac) Absence of Questionable Payments..............................................................24
(ad) Records.......................................................................................24
(ae) Supplier List.................................................................................24
(af) No Royalties..................................................................................24
(ag) Effect of Agreement...........................................................................25
(ah) Accuracy of information.......................................................................25
Article IV - Covenants.......................................................................................26
IV.1 Employment Agreements................................................................................26
IV.2 Covenant not to compete and not to solicit...........................................................26
IV.3 Resignation..........................................................................................26
IV.4 Change of Corporate Name.............................................................................27
IV.5 Operating and capital budgets........................................................................27
IV.6 Indirect Partial Liquidation.........................................................................27
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Article V - Indemnification..................................................................................28
V.1 Principle of the Warranty Indemnification.............................................................28
V.2 Deductions from Payments..............................................................................28
V.3 Limitation in Time....................................................................................28
V.4 Cap; Threshold........................................................................................29
V.5 Indemnification by Purchaser..........................................................................29
V.6 Third Party Claims....................................................................................30
V.7 Adjustment of Indemnity Payment.......................................................................30
V.8 Effect of Knowledge on Representations and Warranties.................................................31
V.9 Exclusive Remedy......................................................................................31
Article VI - Miscellaneous...................................................................................31
VI.1 Notices..............................................................................................31
VI.2 Entire Agreement.....................................................................................33
VI.3 Severability of provisions...........................................................................33
VI.4 Binding Effect, Benefit..............................................................................33
VI.5 Assignability........................................................................................33
VI.6 Amendment and Modification; Waiver...................................................................33
VI.7 Announcements........................................................................................34
(a) Employees.....................................................................................34
(b) Press Release.................................................................................34
VI.8 Confidentiality......................................................................................34
VI.9 Adviser's fees; Expenses.............................................................................34
VI.10 Applicable Law......................................................................................34
VI.11 Arbitration.........................................................................................34
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WHEREAS the Company is a company incorporated in Switzerland, having its
registered office at Xxxxx xxx Xxxxxxx 000, 0000 Xxxxxxx, Xxxxxxxxxxx; and
WHEREAS the Company has a fully paid-up share capital of CHF 500'000.-, divided
into 500 bearer shares with a par value of CHF 1000.- each; and
WHEREAS the Sellers are currently the owners of the entire outstanding share
capital; and
WHEREAS the Sellers desire to sell all of the outstanding shares of the Company
and in reliance upon the representations, warranties and undertakings set out in
this Agreement, the Purchaser desires to purchase all of the outstanding shares
on the terms and conditions set out in this Agreement;
NOW THEREFORE, the parties hereto agree as follows:
DEFINITIONS
"ACCOUNTS" shall mean the audited financial statements, as of and for the years
ended 31 December 1998, 1999 and 2000 (composed of the income statement, the
balance sheet and notes to the financial statements) and the annual report of
each of the Company.
"ACCOUNTS RECEIVABLE" shall mean any and all accounts receivable, trade
receivables, notes receivable and other receivables arising out of the Business.
"ASSETS" shall mean all tangible and intangible property, rights and assets used
in the Business as currently conducted.
"ASSOCIATES" shall mean
(a) with respect to an individual:
(i) the spouse or parents of the individual and all lineal descendants of
the individual and the spouse,
(ii) any trust in which the individual or any person described in (i)
above has a pecuniary interest or any trustee of such a trust, and
(iii) any business entity which is directly or indirectly controlled by any
of the foregoing; and
(b) with respect to a person other than a natural person, any person
controlling, controlled by or under common control with such person, and
any director, officer, partner, trustee, administrator, beneficiary,
executor or manager of such person and any Associate of any person
described in this clause (b).
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"BEST KNOWLEDGE" shall mean both what a person knows as well as what such person
should know had the person exercised reasonable diligence.
"BUSINESS" shall mean the business carried on by the Company as of the date
hereof, that is a research and development organization engaged in the
identification of lead therapeutic compounds in areas of oncology,
cardiovascular and neurology within the framework of phosphonate medicinal
chemistry, to the exclusion of manufacturing and commercialization.
"BUSINESS DAY" shall mean any day other than Saturday or Sunday on which banks
are opened for business in San Antonio, Texas, USA, and Geneva, Switzerland.
"CASH PAYMENT AT CLOSING" shall be the sum of US$ 15'000'000.- less the Escrow
Amount I and the Escrow Amount II.
"CLOSING" shall have the meaning set forth in Article II.1.
"CLOSING DATE" shall have the meaning set forth in Article II.1.
"CORPORATE DOCUMENTS" shall mean the shares or share certificates representing
the Sale Shares, minutes of general shareholders' meetings of the Company for
the last three years, minutes of the board of directors' meetings of the Company
for the last three years, the report of the auditors to the shareholders of the
last three years and certified copies of the current articles of association in
respect of the Company and the internal regulations.
"EMPLOYMENT AGREEMENT" shall mean the employment agreement, attached hereto as
Exhibit 1, among the Company on the one hand and Seller 2 on the other hand,
entered into immediately upon Closing on commercial terms mutually satisfactory
to the Company, Seller 2 and the Purchaser.
"ENVIRONMENT LAW" shall mean any and all applicable laws or regulation regarding
the protection of the environment (land, air, water or any combination thereof)
and of nature or human health and safety.
"ESCROW ACCOUNT I" shall mean an account with a major [Swiss] bank in the name
of the Purchaser, Parent and all of the Sellers with respect to the Escrow
Amount I.
"ESCROW ACCOUNT II" shall mean an account with a major [Swiss] bank in the name
of the Purchaser, Parent and all of the Sellers with respect to the Escrow
Amount II.
"ESCROW AGREEMENT I" shall mean the agreement, attached hereto as Exhibit 2, of
even date herewith, pursuant to which the Escrow Amount I shall be deposited in
the Escrow Account I.
"ESCROW AGREEMENT II" shall mean the agreement, attached hereto as Exhibit 3, of
even date herewith, pursuant to which the Escrow Amount II shall be deposited in
the Escrow Account II.
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"ESCROW AMOUNT I" shall mean an amount of US$ 4'500'000.- to be deposited at
Closing in the Escrow Account I.
"ESCROW AMOUNT II" shall mean an amount of US$ 5'000'000.- to be deposited at
Closing in the Escrow Account II.
"EXCHANGE SHARES" shall mean 521'122 shares of the Parent common stock, par
value US$.01 per share.
"INTELLECTUAL PROPERTY RIGHTS" shall mean all patents and patent applications,
all trademarks and trademark applications, all copyrights; all registrations and
applications and renewals for any of the foregoing; all trade names, trade
secrets, confidential information, ideas, formulae, compositions, know-how,
technical and computer data, documentation and software, financial, business and
marketing plans, customer and supplier lists and related information, marketing
and promotional materials and all other information and intellectual property
rights and all tangible embodiments thereof.
"INVESTOR RIGHTS AGREEMENT" shall mean the agreement attached hereto as Exhibit
4 of even date herewith regarding the issuance of the Exchange Shares to each of
the Sellers and the filing of the resale registration with the SEC pursuant to
the Securities Act of 1933.
"SALE SHARES" shall mean all issued and outstanding 500 bearer shares of the
Company with a par value of CHF 1'000.- each, representing the total equity
capital of the Company.
"SEC" shall mean the United States Securities and Exchange Commission.
"SELLERS" shall mean Seller 1 to Seller 5.
"SOCIAL SECURITY CONTRIBUTIONS" shall mean the mandatory contributions to the
old-age pension insurance scheme (AVS), pension fund scheme (LPP), invalidity
insurance (AI), loss of salary insurance (Allocation pour pertes de gain) and
unemployment insurance (Assurance chomage), together with any interest or any
penalty imposed by any social security authority with respect thereto.
"TAXES" shall mean all income, profits, capital gains, capital, stamp,
anticipatory, gross receipts, sales, value added, use, real property and other
taxes (whether payable directly or by withholding), assessed by Swiss or foreign
authorities, together with any penalties, additions to tax or additional amounts
imposed by any taxing authority with respect thereto.
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ARTICLE I - PURCHASE AND SALE OF SHARES
I.1 PURCHASE AND SALE
In accordance with the terms of this Agreement, each of the Sellers shall sell
to the Purchaser and the Purchaser shall purchase from each of the Sellers good
and valid title to the Sale Shares as set out below, for the consideration set
out in Article I.2 below.
Name of Seller Number of Sale Shares
-------------- ---------------------
- Seller 1...................................................... 295
- Seller 2...................................................... 120
- Seller 3...................................................... 35
- Seller 4...................................................... 25
- Seller 5...................................................... 25
----
Total of Sale Shares.............................................. 500
I.2 PURCHASE PRICE PAYMENT
I.2.1 Cash Payment at Closing
At Closing, the Purchaser pays by wire transfer of immediately
available funds to an account as previously specified by the Sellers
to the Purchaser an amount equal to the Cash Payment at Closing as
follows:
Name of Seller Amount Payable (US$)
-------------- --------------------
- Seller 1............................................... US$ 3'245'000.-
- Seller 2............................................... US$ 1'320'000.-
- Seller 3............................................... US$ 385'000.-
- Seller 4............................................... US$ 275'000.-
- Seller 5............................................... US$ 275'000.-
-----------------
US$ 5'500'000.-
Payment to the account of the Sellers of the amounts set out herein
shall discharge the Purchaser and Parent of all obligations towards
all Sellers under this Article I.2.1.
I.2.2 Escrow Amounts
At Closing, the Purchaser deposits the Escrow Amount I and the Escrow
Amount II in accordance with the Escrow Agreement I and the Escrow
Agreement II.
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I.2.3 Exchange Shares
At Closing, the Purchaser delivers in the name of each Seller
certificates representing the number of shares of Exchange Shares
which such Seller is entitled to receive hereunder as set forth
below. Delivery of the Exchange Shares to each Seller shall discharge
the Purchaser and Parent of all obligations towards all Sellers under
this Article I.2.3, as follows:
Name of Seller Number of Exchange Shares
-------------- -------------------------
- Seller 1...................................................... 307'462
- Seller 2...................................................... 125'069
- Seller 3...................................................... 36'478
- Seller 4...................................................... 26'056
- Seller 5...................................................... 26'056
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521'121
ARTICLE II - CLOSING
II.1 PLACE AND DATE
The closing of the transaction contemplated herein (hereinafter the "CLOSING")
takes place simultaneously with the execution of this Agreement at the offices
of Xxxx & Staehelin, Geneva, on February 13, 2001, or at such other later date
and place as the parties may agree (the date on which Closing occurs hereinafter
the "CLOSING DATE").
II.2 CLOSING DOCUMENTS
II.2.1 At the Closing, Sellers deliver to Purchaser:
(a) the certificates representing the Sale Shares;
(b) letters of resignation of all members of the board of directors of the
Company (as identified by the Purchaser), each containing a statement
of the resigning director that he has been fully compensated for his
services rendered to the Company and that he has no claim of whatever
nature against the Company;
(c) the Pension Fund Certificate pursuant to Article III.2(w);
(d) the duly executed Escrow Agreement I and the duly executed Escrow
Agreement II; and
(e) the duly executed Investor Rights Agreement.
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II.2.2 At the Closing, Purchaser delivers to Sellers:
(a) evidence of payment of the Cash Payment at Closing;
(b) the duly executed Escrow Agreement I and the duly executed Escrow
Agreement II;
(c) evidence of payment of the Escrow Amount I to the Escrow Account I and
evidence of payment of the Escrow Amount II to the Escrow Account II;
(d) certificates representing the Exchange Shares; and
(e) the duly executed Investor Rights Agreement.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
Each party hereby makes the representations and warranties contained in this
Article III to the other party, each of which is true and correct as of the date
hereof and as of the Closing Date.
III.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT
The Purchaser represents and warrants to the Sellers as follows:
(a) Organization of Purchaser
The Purchaser is duly organized and validly existing under the laws of
Delaware and has the corporate power to own and operate its properties
and to carry on its business as now being conducted.
(b) Authority
This Agreement has been duly authorized and validly executed and
delivered by the Purchaser, and is valid and enforceable against the
Purchaser in accordance with its terms applicable to Purchaser. The
Purchaser has full power and authority to enter into this Agreement and
to carry out the transactions applicable to the Purchaser contemplated
by this Agreement.
The execution and delivery of this Agreement by the Purchaser does not
violate the Purchaser's certificate of incorporation or bylaws, any
agreement to which it is a signatory or any governmental law,
regulation, order or judgement to which it is subject.
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The Parent represents and warrants to the Sellers as follows:
(a) Organization of Parent
The Parent is duly organized and validly existing under the laws of
Delaware and has the corporate power to own and operate its properties
and to carry on its business as now being conducted.
(b) Authority
This Agreement has been duly authorized and validly executed and
delivered by the Parent, and is valid and enforceable against the
Parent in accordance with its terms applicable to the Parent. The
Parent has full power and authority to enter into this Agreement and to
carry out the transactions applicable to the Parent contemplated by
this Agreement.
The execution and delivery of this Agreement by the Parent does not
violate the Parent's certificate of incorporation or bylaws, any
agreement to which it is a signatory or any governmental law,
regulation, order or judgment to which it is subject.
(c) Authorization for Exchange Shares
The Parent has taken all necessary action to permit it to issue the
Exchange Shares required to be issued pursuant to the terms of this
Agreement. The Exchange Shares issued pursuant to the terms of this
Agreement will, when issued, be validly issued, fully paid and
nonassessable and not subject to preemptive rights. The Exchange Shares
issuable pursuant to this Agreement will, when issued, be eligible for
quotation on The Nasdaq National Market.
III.2 REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller jointly and severally makes the following representations and
warranties to the Purchaser and the Parent:
(a) Ownership of Sale Shares
Each Seller holds, and the Purchaser will receive, good and valid title
to, his or its Sale Shares, including those shares held in a fiduciary
capacity by any director of the Company. Each Seller owns his or its
Sale Shares free and clear of all encumbrances, mortgages, charges,
liens, security interests or any other right of any third party.
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The Sale Shares are the only shares of the Company issued and
outstanding and the Sellers are the only shareholders of the Company.
Each Seller owns the number of Sale Shares opposite his or its name in
Article I.1.
(b) Organization of Company
The Company is duly organized and validly existing under the laws of
Switzerland and has the corporate power to own, operate and lease its
properties and assets and to carry on its Business as now being
conducted.
There has not been any claim by any jurisdiction that the Company is
required to be authorized to do business as a foreign corporation in
such jurisdiction.
The Corporate Documents of the Company, which are attached hereto as
Annex III.2.(b), are true, complete, correct and have not been amended.
(c) Capitalization
The Company has the following capital structure: a paid-up share
capital of CHF 500'000.-, divided into 500 bearer shares with a par
value of CHF 1'000.- each.
(d) Share capital paid up
All the issued and outstanding shares of the Company are duly and
validly authorized, issued and fully paid up and non-assessable.
(e) No contractual rights of third party over equity interest
Except for the right of first refusal set out in an agreement between
the Sellers, which is terminated effective as of the consummation of
the transactions contemplated herein, there is no option, warrant,
conversion privilege, right of pre-emption, right to acquire, right of
first refusal over or affecting any of the Sale Shares, nor is there
any commitment by any Seller or the Company to give or create any of
the foregoing, and no person has claimed to be entitled to any of the
foregoing.
(f) Financial Statements
The Sellers have delivered to the Purchaser the Accounts and the budget
for the 2001 fiscal year, all as set forth in Annex III.2.(f).
The Accounts have each been prepared in accordance with the provisions
of Swiss law and generally accepted accounting principles in
Switzerland applied on a consistent basis throughout the last three
financial years. The Accounts are each correct and complete and give,
in accordance with the provisions of Swiss law and generally accepted
accounting principles in Switzerland applied on a consistent
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basis, a true, accurate and fair view of the financial situation and
the results of the Company.
In the Accounts of the Company, the assets and the inventory included
among the assets of the Company are valued in accordance with generally
accepted accounting principles in Switzerland consistently applied.
(g) No Undisclosed Liabilities
The Accounts and notes thereto contain all liabilities, whether actual,
accrued, direct, conditional, contingent or otherwise that, according
to the provisions of Swiss law and generally accepted accounting
principles in Switzerland applied on a consistent basis, need to be
contained therein. As of the date hereof, the Company does not have,
and none of the assets and properties of the Company is subject to, any
liabilities other than those set forth in the Accounts, with the
exception of liabilities which have been incurred in the ordinary
course of business since December 31, 2000.
(h) Accounts Receivable
Annex III.2.(h)(i) sets forth a true, accurate and complete aging
schedule of all Accounts Receivable of the Company outstanding on
January 31, 2001. All Accounts Receivable of the Company have arisen
out of bona fide transactions in the ordinary course of business and as
of the date hereof and the necessary provisions have been made in the
Accounts of the Company in accordance with Swiss law and generally
accepted accounting principles in Switzerland consistently applied. All
Accounts Receivables either have been collected or are collectible on
the respective due dates thereof, or, if no due date is stated with
respect thereto, within 90 days of their creation, in each case in the
aggregate recorded amounts thereof, less the applicable provision with
respect thereto reflected on the Accounts. The Company has not factored
or discounted or agreed to factor or discount any Account Receivable.
The values at which the Accounts Receivable are carried on the Balance
Sheet reflect the accounts receivable valuation policy of the Company
which is consistent with the Company's past practice and in accordance
with generally accepted accounting principles in Switzerland
consistently applied. Annex III.2.(h)(ii) sets forth a true, correct
and complete list of all Accounts Receivable written off by the
Company, in whole or in part, as uncollectible during the three years
preceding the date hereof.
(i) Capital Improvements
Annex III.2.(i) describes all capital improvements or purchases or
other capital expenditures (as determined in accordance with the
provisions of Swiss law of and generally accepted accounting principles
in Switzerland) which the Company has committed to or contracted for
and which have not been completed prior to the date hereof and the
costs and expenses reasonably estimated to complete such work and
purchases.
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(j) Absence of Change
Except as set forth on Annex III.2.(j)(i), since December 31, 2000,
there have not been:
(i) any changes in the financial condition, assets, liabilities,
personnel or operations of the Company or in their
relationships with employees, suppliers, customers, lessors or
others, other than changes in the ordinary course of business;
(ii) any change, event or condition which has had or could
reasonably be expected to have an adverse effect on the
Business of the Company;
(iii) any damage, destruction, loss, or other action which may give
rise to any liability of the Company, whether or not covered
by insurance, adversely affecting the assets of the Company
taken as a whole;
(iv) (a) any indebtedness for borrowed money incurred by the
Company becoming or becoming capable of being declared
repayable earlier than the due date for payment or (b) any
forgiveness or cancellation of indebtedness owing to the
Company or waiver of any claims or rights by the Company with
regard to such indebtedness;
(v) any increase in the compensation or benefits paid or to become
payable by the Company, including severance or termination
benefits, to any of its officers or employees or agreement to
do the same, except for scheduled increases in the ordinary
course of business consistent with past practice to employees
who are not officers of the Company;
(vi) any payment of dividends, distributions or other dispositions
nor any transfer, lease, license of assets of the Company to
Sellers;
(vii) any encumbrances placed on or created or extended over any of
the assets of the Company;
(viii) any breach, default by the Company, or to the Best Knowledge
of the Sellers, any default by a third party, amendment or
termination of any lease, contract, license or other agreement
to which the Company is a party or which its properties or
assets are bound;
(ix) any change in the collection, payment or credit practices of
the Company or in the accounting practices, procedures or
methods of the Company;
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(x) any agreement, arrangement or transaction, other than in the
ordinary course of business consistent with past practice and
of an entirely arm's length nature and as set forth on Annex
III.2.(j)(ii), between (i) the Company and (ii) the Sellers or
any officer or employee of the Company;
(xi) to the Best Knowledge of the Sellers, any legislative or
regulatory change adversely affecting the Company, its assets
or the Business;
(xii) any event or condition which, individually or in the
aggregate, could prevent, hinder or delay in any respect the
ability of the Sellers to consummate the transactions
contemplated herein; or
(xiii) any oral or written agreement by any the Sellers or the
Company or any corporate action by the Company with respect to
any of the above.
(k) Insolvency
(i) No order has been notified and no resolution has been passed
for the winding up of the Company or for a provisional
liquidator to be appointed in respect of the Company and no
petition has been presented and no meeting has been convened
for the purpose of winding up the Company.
(ii) No administration order has been made and no petition for such
an order has been presented in respect of the Company.
(iii) No receiver (which expression shall include an administrative
receiver) has been appointed in respect of the Company or all
or any of its assets.
(iv) The Company is not insolvent, or is not unable to pay its
debts, or has stopped paying its debts as they fall due and
there are no enforcement proceedings initiated against the
Company as set forth in Annex III.2(k).
(v) No unsatisfied judgement is outstanding against the Company.
(l) Taxes
(i) Filing of Returns
The Company has filed when due, correct and accurate returns for Taxes
and has otherwise complied in all respects with requirements relating
to the filing of Tax returns and the supply of all information required
to be supplied to any tax authority. All such Tax returns and the
information and data contained therein have been properly and
accurately compiled and completed in all respects, fairly present the
information purported to be shown therein and reflect all liabilities
for Taxes for the periods covered by such Tax returns.
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(ii) Payment of Taxes
The Company has complied timely with all and any requirements relating
to the payment of Taxes, of whatever nature, including interest and
penalties, if any.
(iii) Tax Provisions
The Company has paid and, if not paid, established adequate provisions
in its respective latest Accounts for all Taxes of whatever nature that
may be assessed or computed on the property, results, operations or
transactions of the Company for all periods prior to December 31, 2000,
regardless of the financial period during which such Taxes may become
due and payable.
For the Company, the amount of the provision for accrued Taxes in its
latest Accounts was adequate and fully in accordance with Swiss law and
generally accepted accounting principles in Switzerland and practices
commonly adopted by companies carrying on businesses similar to the
Business.
The Company has duly submitted all claims and disclaimers which have
been assumed to have been made for the purposes of its latest Accounts.
(iv) No Dispute
The Company is not subject to formal proceedings or investigations or
examinations by any tax authorities and to the Best Knowledge of the
Sellers no such proceedings, investigations or claims are threatened
against the Company.
(v) No Withholding Tax on Dividends
The Company has not distributed nor caused to be distributed any hidden
dividend, nor distributed or granted any other benefit to the Sellers
or any other person which could lead to the imposition of any
withholding taxes on dividends or constructive dividends.
(vi) No Adverse Tax Consequences
The acquisition of the Sale Shares by the Purchaser will not give rise
to any adverse tax consequences for the Company.
(m) Environment
The Company conducts and has always conducted its activities in
conformity with Environment Law. Until and including the date hereof,
the Company has complied with and not violated any Environment Law at
the time when such law was applicable. No action has been undertaken
or, to the Best Knowledge of the Sellers, threatened to be undertaken
by Swiss or foreign authorities with respect to Environment Law which
could have an adverse effect on the Company. No facts,
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events or conditions in existence on or prior to the date hereof which
relate to the past or present operations of the Company give rise to
any investigatory, remedial or corrective obligations pursuant to
Environment Law, or give rise to any other liabilities for onsite or
offsite releases of hazardous materials, substances or wastes, personal
injury, contamination of soil, water, air or groundwater, property
damage or damage to natural resources, pursuant to Environment Law.
(n) Leases; Real Property
Annex III.2.(n) sets forth a complete and correct list of all real
property or premises owned or leased in whole or in part, and the
annual rent amounts payable, by the Company.
Each lease of premises utilized by the Company is legal, valid and
binding, and in full force and effect, as between the Company and the
other party or parties thereto, and the Company is tenant or possessor
in good standing thereunder, free of any default or breach, and quietly
enjoys the premises provided for therein without interference. Each
rental and other payment due from the Company thereunder has been duly
paid; each act required to be performed by the Company which if not
performed would constitute a breach thereof has been duly performed;
and no act forbidden to be performed by the Company has been performed
thereunder.
The Company owns, or holds a valid leasehold interest in such premises,
free and clear (except for rights of landlords with respect to fixtures
and leasehold improvements, if any, with respect to leased premises) of
all encumbrances, including those related to improvement, fixture or
item of equipment located in or on each of the properties and premises
owned, leased or occupied by it; no improvement, fixture, or equipment
on any such premises is in violation of any law, including without
limitation any zoning, building, safety, health, Environment Law or
other law, and each of such premises and properties is zoned for the
purposes for which such premises or properties are currently being
used.
All buildings owned or occupied by the Company have been constantly
maintained in accordance with all laws and regulations and the
provisions of any applicable lease. None of such premises or properties
has been condemned or otherwise taken by public authority and no
condemnation or taking is threatened or contemplated. The Company has
all required legal or governmental approvals for each of the properties
and premises owned, leased, used or occupied by it. There are no
pending or threatened disputes with respect to any lease or other
agreement pursuant to which the real property or premises is leased by
the Company.
There is no (i) change contemplated in any applicable law, statute,
ordinance, rule, regulation, order or determination of any governmental
authority, applicable law, statute, ordinance, rule, regulation, order
or determination of any governmental authority or any restrictive
covenant or deed restriction affecting the real property or premises
described in this Article III.2(n), including without limitation any
zoning ordinances, building codes, flood disaster laws, health laws or
environmental laws,
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judicial or administrative action, action by adjacent landowners,
administrative action, (ii) natural or artificial conditions on or
about the real property or premises described in this Article III.2(n)
or (iii) significant adverse fact or condition relating to such real
property or premises or its use that would, in each case, prevent,
limit, impede or render more costly the ownership, operation or
maintenance of such real property or premises compared to the cost as
of the date hereof.
(o) Condition of Assets; Sufficiency
The equipment and other tangible assets owned by the Company are owned,
free and clear of all liens, encumbrances and other third party rights
and are in good repair and operating condition, normal wear and tear
excepted, have been maintained regularly in accordance with
commercially reasonable practices and may be used for their intended
purpose in the normal course of the Business. The assets of the Company
described in this Section III.2.(o) include all assets which have been
used by the Company to conduct the Business or are required for the
purpose of carrying on the Business. Annex III.2.(o) sets forth the
material equipment and other tangible assets owned by the Company.
(p) Intellectual Property Rights
Annex III.2.(p)(i) sets forth a complete and correct list and brief
description of all Intellectual Property Rights owned (and where
appropriate, registered) by the Company or used by the Company in
connection with the Business, including all licenses and other rights
granted by the Company to any third party with respect to Intellectual
Property Rights and all licenses and other rights granted by any third
party to the Company, in each case together with a description of the
nature of the license and subject matter licensed. Undocumented
know-how, show-how and trade secrets necessary and sufficient to
practice the Intellectual Property Rights listed in Annex III.2.(p)(i)
and the Business, generally, are also included in the Intellectual
Property Rights owned or used by the Company, in connection with the
Business, even though they are not specifically listed in Annex
III.2.(p)(i).
To the Best Knowledge of the Sellers, the Company owns or possesses all
right, title and interest in and to, or has the unencumbered right to a
royalty-bearing exclusive license to use, all of the Intellectual
Property Rights set forth in Annex III.2(p)(ii). To the Best Knowledge
of the Sellers, all Intellectual Property Rights set forth in Annex
III.2(p)(ii) are valid, enforceable and not infringed. No claim by any
third party contesting the validity, enforceability, use or ownership
of any Intellectual Property Rights set forth in Annex III.2(p)(ii) has
been made, is currently outstanding or is, to the Best Knowledge of the
Sellers, threatened, and to the Best Knowledge of the Sellers, there
are no grounds for such claim. To the Best Knowledge of the Sellers,
and except potentially the Toray Industries, Inc., Japan, United States
patent, patent number 5,153,183, dated October 6, 1992, the
Intellectual Property Rights set forth in Annex III.2(p)(ii) do not
infringe any third party rights and were not misappropriated from any
third party and do not conflict with any third party rights. Neither
the Company nor any Seller is aware of any
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infringement, misappropriation or conflict which will occur as a result
of the continued operation of the Business as conducted.
The Company needs no additional Intellectual Property Rights which are
necessary for the operation of the Business as it was operated prior to
Closing. The Company has taken all actions necessary to preserve the
value of and to ensure the continuous protection of the Intellectual
Property Rights and its rights therein.
None of the Company, any Seller or any of their respective agents has
practiced inequitable conduct under any applicable laws with respect to
any of the foregoing. Except for agreements itemized on Annex
III.2(p)(i), the Company is not obligated to indemnify any person for
any liability, cost or expense arising from such person's use, sale,
licensing or disposition of any Intellectual Property Rights or such
person's manufacture, use, sale, license or other exploitation of any
product or technology. Except for agreements itemized on Annex
III.2.(p)(i), no agreements or arrangements are in effect with respect
to the development, nondisclosure, marketing, distribution, licensing
or promotion of the Intellectual Property Rights by any independent
contractor, salesperson, distributor, sublicensee or other remarketer
or sales organization.
(q) Contracts
Annex III.2.(q) hereto sets forth a complete and correct list, of all
written or oral contracts (except employment contracts), agreements,
commitments, instruments or other consensual obligations to which the
Company is a party or by which the Company, or any of its assets or
properties is bound (i) which each involve a yearly aggregate
consideration of US$ 20'000 or more, (ii) which evidence or provide for
any borrowing indebtedness of the Company or any encumbrance on any of
the Assets, (iii) which guarantee the performance, liabilities or
obligations of any other person (whether legal or natural), (iv) which
restrict the ability of the Company to conduct any business activities,
(v) which involve any governmental entity, (vi) which are not in the
ordinary course of the business, (vii) which are terminable by any
third party, or which would be breached, in each case, as a result of
the transactions contemplated by this Agreement, (viii) which relate to
Intellectual Property Rights, (ix) which have a term of more than one
year or cannot be terminated on 90 days notice or less, or (x) any
contract, commitment or agreement of any nature with any Seller, or any
Associate of any Seller, (xi) any agreement, contract or commitment
relating to any expenditure or a series of related expenditures in
excess of US$ 20'000, (xii) any outstanding loan or advance by the
Company to, or investment by the Company in, any person, or any
agreement, contract, commitment or understanding relating to the making
of any such loan, advance or investment (excluding trade receivables),
(xiii) any agreement, contract or commitment limiting the freedom of
the Company or any affiliate of the Company to engage in any line of
business, to own, operate, sell, transfer, pledge or otherwise dispose
of or encumber any asset or to compete with any person or to engage in
any business or activity in any geographical area, (xiv) or any
collective bargaining agreement, union agreement, consulting agreement,
management service
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agreement, agreement providing for the services of an independent
contractor or any other similar type of contract or agreement; (xv) any
profit-sharing, pension, stock option, severance pay, retirement,
bonus, deferred compensation, group life and health insurance or other
employee benefit plan, agreement, arrangement or commitment of a
similar nature or any agreement with any present or former officer,
director or shareholder of the Company; (xvi) any agreement, indenture
or other instrument which contains restrictions with respect to the
payment of dividends or any other distribution in respect of the
Company's capital stock or the purchase, redemption or other
acquisition of capital stock; (xvii) or which are otherwise material to
the Business (these agreements collectively referred to as the
"AGREEMENTS"). All Agreements are in full force and effect. The Company
is not in breach of any of the Agreements, nor is, to the Best
Knowledge of the Sellers, any third party in breach of the Agreements
or has repudiated any provision of the Agreements and no event has
occurred which with notice, lapse of time or both would constitute a
breach or default or permit termination, modification or acceleration
of any such Agreement. None of the Agreements will be breached or will
terminate by its terms as a result of the transactions contemplated
herein. There are no pending or, to the Best Knowledge of the Sellers,
threatened disputes with respect to the Agreements. The Company is not
obligated to pay any liquidated damages under any of the Agreements and
there are no facts or circumstances that could reasonably be expected
to result in an obligation of the Company to pay any such liquidated
damages. Copies of all of the documents (or in the case of oral
commitments, descriptions of the material terms thereof) relevant to
the Agreements have been delivered to the Purchaser, and such copies
and/or descriptions are true, complete and accurate and include all
amendments, supplements or modifications thereto. There is no reason
why any of the Agreements (i) cannot readily be fulfilled or performed
by the Company on time without undue or unusual expenditure of money or
effort. The transactions contemplated herein do not require the
approval or consent of any person pursuant to any of the Agreements.
(r) Litigation
There is no claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Swiss or foreign governmental
commission, court, tribunal or arbitral body by or against the Company
or any of its assets or properties pending, or, to the Best Knowledge
of the Sellers, threatened to be brought against the Company or the
Sellers, or any of their officers or staff relating to the Company, the
Business or the Assets, by any person or before any Swiss or foreign
governmental commission, court, tribunal or arbitral body nor, to the
Best Knowledge of the Sellers, do any circumstances exist which are
likely to give rise to any such claim, action suit, arbitration,
inquiry, proceedings or investigation.
(s) Compliance with Laws
The Company and the Business are, and have been in compliance with all
laws and regulations of local, federal and foreign governmental
authorities applicable to the Company. The Company possesses, and is in
compliance with, all licenses, permits,
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approvals and other governmental authorizations necessary to the
conduct of the Business as currently conducted, which licenses, permits
and approvals are set forth on Annex III.2.(s)(i), and there is no
reason or circumstance which indicates that such licenses, permits,
approvals and authorizations are likely to be revoked or confer a right
of revocation. The Company has not received and no Seller is aware of
any reports of inspections under any applicable federal, state or local
health and safety laws and regulations relating to the Company, its
assets or the operation of the Business. There are no safety, health,
anti-competitive or discrimination claims that have been made or are
pending or, to the Best Knowledge of each Seller, that are threatened
relating to the Business or the employment practices of the Company.
The Company has complied with all governmental requirements applicable
to the Business. Except as listed in Annex III.2.(s)(ii), the Company
(1) has not performed any clinical trials of any drugs or
pharmaceutical compounds and (2) has not applied for marketing approval
for any drug or pharmaceutical compound from any governmental
authority.
(t) Insurance
Annex III.2.(t) hereto sets forth a true and correct list of all
insurance policies of any nature whatsoever maintained by the Company
relating to the Business and sets forth the annual or other premiums
payable thereunder with respect to the Business and the type and extent
of coverage afforded by each such policy. Each such policy is in full
force and effect. The Company carries such insurance contracts and has
obtained such coverage thereby as is customary and reasonable for a
business of the sort as conducted by the Company. The Company has not
received any notice or other communication from any insurance company
within the three (3) years prior to the date hereof canceling or
amending such policies or substantially increasing the annual or other
premiums payable under any of said insurance policies, to the Best
Knowledge of the Sellers, and no such cancellation or amendment is
threatened. There is no dispute with respect to such policies, and all
claims arising from events or circumstances occurring prior to the date
hereof have been paid in full or adequate reserves therefor are
recorded in the Accounts. All retroactive premium adjustments for any
period ended on or before December 31, 2000, under any insurance
policies of the Company have been recorded in accordance with generally
accepted accounting principles in Switzerland consistently applied and
are reflected in the Accounts. None of the policies set forth on Annex
III.2(t) will terminate as a result of the transactions contemplated by
this Agreement.
All premiums pertaining to the insurance policies have been paid when
due, or duly provided for in the Accounts.
(u) Products
The Company has not manufactured or sold any product.
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(v) Employees
Annex III.2.(v)(i) contains a list of all employees of the Company.
This list contains details about salary and compensation (including
benefits in kind), notice periods for termination, right to severance
pay and to bonus.
Except for employment contracts listed in Annex III.2.(v)(ii), each
contract of employment to which the Company are a party can be
terminated by the Company without damages or compensation (other than
that payable by law) by giving at any time only the minimum period of
notice applicable to that contract under the laws of Switzerland.
(w) Professional and Social Welfare
Any and all returns and reports related to Social Security
Contributions that are required to be filed with respect to the Company
prior to the date hereof have been timely and correctly filed. The
Company has paid in full any and all Social Security Contributions as
and when due. No social security authority is now asserting any
deficiency or claim for additional Social Security Contributions (or
interest thereon or penalties in connection therewith) and any and all
Social Security Contributions which (although not due) have accrued on
the basis of the salaries to be paid until the date hereof, have been
fully provisioned.
There are no facts or circumstances existing or having arisen prior to
the date hereof which have led or, to the Best Knowledge of the
Sellers, may lead to a re-assessment by any social security authority
of Social Security Contributions to be made by the Company relating to
any period prior to the date hereof.
The details of the employee pension fund of the Company are described
in Annex III.2.(w)(i) (hereinafter the "PENSION FUND"). The Company is
meeting all its obligations under the Pension Fund and specifically has
paid (or accrued) all contributions required prior to the date hereof
as stipulated by the regulations of the Pension Fund. Except for the
Pension Fund, there are no other benefit plans or arrangements for the
benefit of employees, directors of offices of the Company.
Performance of these obligations is reflected in the pension fund
certificate (hereinafter the "PENSION FUND CERTIFICATE") attached
hereto as Annex III.2.(w)(ii). All payments required to be made to fund
the Pension Fund have been made. The Company is not required to
contribute to any pension fund other than the Pension Fund. There are
no pending or threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against the Pension Fund. No
notice has been received by the Company of an increase or proposed
increase in the cost of any employee welfare benefit or employee
pension benefit plan or other employee benefit agreement or
arrangement. The transactions contemplated by this Agreement will not
accelerate the time of payment or vesting, or increase the amount, of
compensation due any director, officer or employee or former director,
officer or employee (including any beneficiary) from the Company.
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(x) No collective bargaining
There is no collective bargaining or other union agreement or
arrangement (whether binding or not) to which the Company is a party or
by which it is bound or which is currently being negotiated and no
organizing effort by any trade union or dispute between the Company and
any trade union or other organization formed for a similar purpose is
existing, pending or threatened.
(y) Bank Accounts
Annex III.2.(y)(i) contains a list of all bank accounts opened in the
Company's name and of the persons holding powers to access them or
withdraw from them, as well as the credit and debit balances of such
accounts as of the most recent practicable date. Except as set forth in
Annex III.2.(y)(ii), since the date of the balances set forth on such
list, there have been no payments out of or drafts against any of the
accounts included therein other than routine payments and drafts in the
ordinary course of business, and the balances in such accounts as of
the date hereof are not materially different from those reflected in
such list.
(z) Competing Interests
Except as set forth on Annex III.2.(z), none of the Sellers, or any
director or officer of, the Company:
(i) owns, directly or indirectly, any equity interests in, or is a
director, officer or employee of, or consultant to, any entity which is
a direct competitor of the Company (except for ownership, if any, of
less than one percent of the outstanding capital stock of any
corporation the capital stock of which is traded on a nationally
recognized securities exchange), or
(ii) owns, directly or indirectly, in whole or in part, any property,
asset or right which is associated with the Assets or the Business or
which the Company is presently operating or using in connection with or
the use of which is necessary for or material to the operation of the
Business.
(aa) Brokers and Finders
No broker or finder has acted for the Company or any Seller in
connection with this Agreement or the transactions contemplated by this
Agreement and no broker or finder is entitled to any brokerage or
finder's fee or to any commission in respect thereof based in any way
on agreements, arrangements or understandings made by or on behalf of
the Company or each Seller.
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(ab) Termination of agreements between the Company and the Sellers
As of the date hereof, except for the agreements listed in Annex
III.2.(ab), Sellers have terminated all agreements, whether written or
oral, existing between the Company, on the one hand, and any Seller or
any Associates of any Seller, on the other hand, unless the
continuation of such agreement has been previously approved by the
Purchaser in writing. The termination of any such agreement does not
oblige the Company to make any payments in compensation of the
termination, such as for example severance payments or any payment for
a notification period extending beyond the date hereof.
(ac) Absence of Questionable Payments
None of the Company, any Seller, director, officer, agent or employee
of the Company or other person acting on behalf of any Seller or the
Company has used any corporate or other funds for unlawful
contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to any government officials
or others or established or maintained any unlawful or unrecorded funds
in violation of the laws of any national, federal, state, local or
foreign jurisdiction. None of the Company, any Seller, director,
officer, agent or employee of the Company has accepted or received any
unlawful contributions, payments, gifts, or expenditures.
(ad) Records
The books, records and minutes kept by the Company with respect to the
Assets and the Business, including, but not limited to, all customer
files, service agreements, correspondence and historic revenue of the
Company, have been kept properly and contain records of all matters
required to be included therein by any governmental requirement or by
generally accepted accounting principles in Switzerland, and such
books, records and minutes are true, accurate and complete.
(ae) Supplier List
Annex III.2(ae) sets forth a true, correct and complete list of all
suppliers of the Business from which the Company has purchased or
otherwise received more than US$ 50,000 worth of products or services
during the past three years. This list provides an accurate statement
of the gross payments to each such supplier by the Business during the
past three years.
(af) No Royalties
Except as set forth on Annex III.2(af), no royalty or similar item or
amount is being paid or is owing by the Company, nor is any such item
accruing, with respect to the operation, ownership or use of the
Business or the Assets.
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(ag) Effect of Agreement
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not violate any provision of
the corporate documents or other charter documents, regulations or
bylaws of the Company; result in any violation of any governmental
requirement applicable to any Seller, the Company, the Assets or the
Business; conflict with, or result in any breach of, or a default or
loss of any right under (or an event or circumstance that, with notice
or the lapse of time, or both, would result in a default), or the
creation of an encumbrance pursuant to, or cause or permit the
acceleration prior to maturity or "put" right with respect to, any
obligation under, any contract, indenture, mortgage, deed of trust,
lease, loan agreement or other agreement or instrument to which the
Company or any Seller is a party or to which any of the Assets or
Business are subject; relieve any person of any obligation (whether
contractual or otherwise) or enable any person to accelerate or
terminate any such obligation or any right or benefit enjoyed by the
Company or to exercise any right under any agreement in respect of the
Assets or the Business; and require notice to or the consent,
authorization, approval, clearance, waiver or order of any person.
Except as set forth on Annex III.2(ag), the business relationships of
clients, customers and suppliers of the Business will not be adversely
affected by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Company or any Seller
will not result in the loss of any governmental license, franchise or
permit possessed by the Company or applicable to the Assets or the
Business.
Each Seller has full legal right, power and authority to enter into and
deliver this Agreement, to consummate the transactions set forth herein
and to perform all the terms and conditions hereof to be performed by
it. This Agreement has been duly and validly executed and delivered by
each Seller and, as applicable, the execution and delivery of this
Agreement by each Seller and the performance by it of the transactions
contemplated herein have been duly and validly authorised by all
requisite corporate or other actions of each Seller. This Agreement is
the legal, valid and binding obligation of each Seller, enforceable
against each Seller in accordance with the terms of the Agreement,
except as limited by applicable bankruptcy, moratorium, insolvency or
similar laws affecting generally the rights of creditors or by
principles of equity.
(ah) Accuracy of information
None of the representations, warranties or statements contained in this
Agreement, the Investor Rights Agreement, the Escrow Agreement and the
Employment Agreements or in the Annexes hereto and thereto contains any
untrue statement of a fact or omits to state any fact necessary in
order to make any of such representations, warranties, statements or
information true and not misleading as of the Closing Date. All
information required to be provided by any Seller, the Company or their
respective agents pursuant to the terms of this Agreement is true,
complete and
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correct as of the Closing Date. There is no fact or matter that is not
disclosed to the Purchaser or the Parent in this Agreement, the
Investor Rights Agreement, the Escrow Agreement and the Employment
Agreements or the Annexes hereto and thereto that adversely affects or,
so far as the Company or any Seller can now reasonably foresee, could
adversely affect the condition (financial or otherwise) of any of the
Assets or the Business or the ability of the Company or any Seller to
perform their respective obligations under this Agreement.
ARTICLE IV - COVENANTS
IV.1 EMPLOYMENT AGREEMENTS
Immediately upon Closing, Seller 2 shall enter into the Employment Agreement.
IV.2 COVENANT NOT TO COMPETE AND NOT TO SOLICIT
For the purpose of assuring to the Purchaser and the Parent the full benefit of
the businesses and goodwill of the Company, each of the Sellers undertakes by
way of further consideration for the obligations of the Purchaser and the Parent
under this Agreement as separate and independent agreements that he or it will
not:
(i) at any time after Closing disclose to any person, or himself
or itself use for any purpose, and shall use his best
endeavors to prevent the publication or disclosure of, any
non-public information concerning the Business, Assets,
accounts or finances of the Company or any of its clients' or
customers' transactions or affairs of which he has knowledge;
(ii) for three years after Closing either on his own account or for
any other person directly or indirectly solicit, interfere
with or endeavor to entice away from the Company any person
who to his knowledge is, or has during the past three years
preceding the Closing been, a client, customer or employee of,
or in the habit of dealing with the Company;
(iii) for three years after Closing, either alone or jointly with or
as manager, agent for or employee of any person or as a
shareholder of more than a 5% interest, directly or
indirectly, carry on or be engaged, concerned or interested in
any business competing with the Business.
The Sellers' undertakings under this provision (iii) shall
expire upon the Purchaser ceasing to conduct the Business.
IV.3 RESIGNATION
Immediately after Closing, the Purchaser shall take the necessary steps to
register with the Commercial Registry the resignation of the resigning member of
the board of directors of the Company.
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IV.4 CHANGE OF CORPORATE NAME
Immediately upon Closing, the Purchaser shall resolve on a extraordinary general
shareholders meeting of the Company that the corporate name of the Company be
changed to ILEX Research Europe X.X.
XX.5 OPERATING AND CAPITAL BUDGETS
Upon Closing, the Company will be managed by Seller 2 as senior executive and
head of the Geneva research and development (R&D) operations. The Parent agrees
that the approved operating and capital budget of the Company for 2001 will be a
minimum of US$ 5 million to cover the transition period and subject to the
viability of performance, and to final agreement of the Executive Business
Council and the Vice President ILEX Research Europe, a minimum of US$ 4.5
million for 2002 and 2003;
The Company will have the primary responsibility for managing the present
projects (i.e., scientific collaborators, scientific advisors, etc.) and, in
collaboration with ILEX Business Development representatives, to pursue
reasonable business development efforts and partner non-oncology therapeutic
areas such that the benefits of the programs are fully realized.
IV.6 INDIRECT PARTIAL LIQUIDATION
The Purchaser has not made, and will not during the 5 (five) years following the
Closing Date make, any payment of the Purchase Price (or any portion thereof)
out of any funds which either directly or indirectly (by virtue of cash
disbursement, upstream loans, back-to-back arrangements, guarantees, pledge or
in any other manner) are taken from the Company, and the Purchaser will not take
other actions that re-characterizes the Purchase Price as income taxable to the
Sellers. The Purchaser is aware that such payments according to tax practice of
the Swiss Tax Administration, might be construed as "liquidation partielle
indirecte" or "liquidation", which might re-characterize capital gain as taxable
dividend income of the Sellers 2 to 5.
The Purchaser unconditionally and irrevocably undertakes to hold the Sellers 2
to 5 fully harmless and to indemnify the Sellers 2 to 5 for any and all income
and/or withholding taxes which are imposed on the Sellers 2 to 5 by a
non-appealable judgement based on the initial decision of either the cantonal or
federal tax authorities. The Purchaser shall however seek no indemnification
from Seller 1 for any tax liability of the Company relating to the present
transaction, i.e., the purchase of the Sale Shares, arising exclusively on the
basis of the theory of the indirect partial liquidation. The Purchaser shall be
kept informed by the Sellers 2 to 5 and the Purchaser shall, in its entire
discretion, arrange for and control the necessary tax procedure and bear all
costs incurred with such a non-appealable judgement. The Sellers 2 to 5 shall
use their best efforts to contest any claim or case brought by the cantonal or
federal tax authorities and resist any attempted re-characterization of the
Purchase Price or use of Retained Earnings as dividend or other taxable income.
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ARTICLE V - INDEMNIFICATION
V.1 PRINCIPLE OF THE WARRANTY INDEMNIFICATION
All Sellers hereby jointly and severally agree to indemnify and hold harmless
the Purchaser and the Parent from and against any losses, damages, liabilities,
obligations, claims, judgements, costs and expenses including reasonable
attorney's fees incurred by the Purchaser or the Parent by reason of or
resulting from a breach of or inaccuracy in the representations, warranties,
agreements, or covenants contained in this Agreement.
Notwithstanding the provisions of this Article V.1, a breach of any of the
Covenants in Article IV.2 of this Agreement will give the right for
indemnification only from the Seller in breach thereof.
The parties agree that Articles 201 and 210 of the Swiss Code of Obligations are
not applicable to any claim arising out of or in connection with this Agreement.
V.2 DEDUCTIONS FROM PAYMENTS
(i) Any payments of indemnity will be paid by the Sellers and may be
withdrawn by Purchaser or the Parent from the Escrow Account to
satisfy any claim. All sums payable by any Seller to the Purchaser or
the Parent under this Article V shall be paid free and clear of all
deductions or withholdings whatsoever, save only as may be required
by law.
(ii) If any deductions or withholdings are required by law to be made from
any of the sums payable as mentioned in sub-paragraph V.2(i) of this
clause, the Sellers shall be obliged to pay the Purchaser or the
Parent such sum as will, after the deduction or withholding has been
made, leave the Purchaser or Parent with the same amount as it would
have been entitled to receive in the absence of any such requirement
to make a deduction or withholding.
(iii) If any tax shall be payable by the Purchaser or Parent on any sum
paid by the Sellers to the Purchaser or the Parent under this
Agreement, the Sellers shall be obliged to pay to the Purchaser or
the Parent such sum as will, after the payment of such tax has been
made by the Purchaser or the Parent, leave the Purchaser or the
Parent with the same amount as it would have been entitled to receive
in the absence of any such requirement to pay tax.
V.3 LIMITATION IN TIME
The Purchaser or the Parent may request indemnification as provided in Article
V.1 or present a claim for breach of a representation, warranty, covenant or
agreement only: (i) during a period of two years from the Closing or (ii) in
case of a breach of the Sellers' representations and warranties in Article
III.2.(l)(taxes), III.2(m)(environment) and III.2(w)(pension and social
security) during a period of five years from the Closing (hereinafter in both
cases of (i) and (ii) the "INDEMNIFICATION PERIOD"). Upon expiry of the
applicable Indemnification Period, the right to request indemnification shall
lapse.
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Should the Purchaser or the Parent discover or receive notice of any facts or
circumstances that may trigger an indemnification request, the Purchaser or the
Parent, as the case may be, shall inform the Sellers as soon as reasonably
practicable, but in no event later than six months, after discovery or receipt
of notice.
Where reasonable details of any claim are given by the Purchaser or the Parent
to any Seller within the Indemnification Period, and in conformity with Article
V.6 where applicable, the giving of those details shall be considered to be a
call for indemnification, subject to the condition that such details have been
sent to the Sellers in accordance with Article VI.1.
If a claim for indemnity is provided pursuant to this Article V by an
Indemnified Party and any Indemnifying Party does not pay such claim or object
to such claim within 15 Business Days after notice is received by the
Indemnifying Party, such claim shall be deemed agreed to by the Indemnifying
Party. If any Indemnifying Party shall object to such claim, a written notice of
such objection setting forth in reasonable detail the basis for such objection
shall be provided to such Indemnified Party and such dispute shall be resolved
in accordance with the arbitration provisions hereof. In addition, if the claim
shall have been determined to have been a valid claim, damages shall include 5%
interest until fully paid.
V.4 CAP; THRESHOLD
(i) The parties have agreed that the Sellers' aggregate liability pursuant
to Article V.1 for any breach of the provisions of Article III.2. shall
be limited to an aggregate amount equivalent to 50% of the Purchase
Price, plus reasonable attorneys fees and litigation costs.
(ii) No indemnification shall be payable by the Sellers in respect of any
claim for damages, for breach of any of the warranties, covenants,
agreements or other undertakings under this Agreement, except for any
breach of Article III.2(ac) or Article III.2(ad), unless and until the
aggregate cumulative liability of the Sellers in respect for such
claims, reaches a threshold amount of US$ 200,000. Once the threshold
amount has been exceeded, the Sellers shall be liable for the full
amount of any and all claims, and not merely for the excess.
The limitations contained in this Article V.4 shall not apply in case of
intentional misrepresentations or fraud by any Seller which may give rise to a
claim for damages.
V.5 INDEMNIFICATION BY PURCHASER
The Purchaser hereby agrees to indemnify and hold harmless the Sellers from and
against any losses, damages, liabilities, obligations, claims, judgements, costs
and expenses including reasonable attorneys' fees incurred by the Sellers by
reason of or resulting from a breach of or inaccuracy in any of the Purchaser's
representations, warranties, covenants and agreements contained in this
Agreement.
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V.6 THIRD PARTY CLAIMS
Promptly after a party entitled to indemnification under this Article V (an
"INDEMNIFIED PARTY") shall have received notice (an "INDEMNIFICATION NOTICE") of
the commencement of any action by a third party in respect of which the
Indemnified Party will or may seek indemnification under this Article V or shall
have discovered other facts that the Indemnified Party believes give rise to a
right to indemnity in respect of third party rights, the Indemnified Party shall
notify the party providing the indemnification hereunder (the "INDEMNIFYING
PARTY") thereof in writing but no failure to so notify the Indemnifying Party
shall relieve the Indemnifying Party from any liability that it has to the
Indemnified Party except if and to the extent that the Indemnifying Party shall
have been materially prejudiced thereby. In making any claim under this Article
V.6, the Indemnified Party will specify with reasonable particularity the item
or items giving rise to the claim and the basis of the claim.
The Indemnified Party shall be entitled to defend such lawsuit or action
(including, without limitation, all administrative appeals, proceedings, hearing
and conferences with any tax authority and all aspects of any litigation
relating to taxes) and to employ and engage attorneys of its own choice to
adequately handle and defend the same. The reasonable fees of such attorneys
shall be borne by the Indemnifying Party.
The Indemnifying Party shall have the right to employ its own, separate counsel
who may give non-binding advice to the Indemnified Party and shall have the
right to be consulted by the Indemnified Party in the defense of such lawsuit or
action, but the fees and expenses of such counsel shall be at the expense of the
Indemnifying Party.
The Indemnifying Party shall co-operate in all reasonable respects with the
Indemnified Party and its attorneys in the investigation, trial and defense of
such lawsuit or action and any appeal arising therefrom.
The Indemnified Party shall, in conducting the lawsuit or action, take into
account the reasonable interests of the Indemnifying Party.
The Indemnified Party shall not make any admission of liability, agreement or
compromise with any person, body or authority in relation thereto without the
prior written consent of the Indemnifying Party which shall not be unreasonably
withheld or delayed.
V.7 ADJUSTMENT OF INDEMNITY PAYMENT
If any amount is paid by an Indemnifying Party pursuant to this Article V in
respect of any item, then to the extent that the Indemnified Party later
recovers in respect of such item an amount which, when added to the
indemnification payment previously received in respect thereof pursuant to this
Article V, exceeds the amount which the Indemnified Party was entitled to
receive in respect of such item in accordance with the terms thereof, the
Indemnified Party will pay to the Indemnifying Party promptly the amount of such
excess.
Indemnity shall be due for any and all amounts in excess of the items or
reserves provisioned for in the Accounts.
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V.8 EFFECT OF KNOWLEDGE ON REPRESENTATIONS AND WARRANTIES
Notwithstanding anything to the contrary in this Agreement and the Annexes
hereto, no due diligence or other investigation or knowledge on the part of the
Purchaser, the Parent or their agents shall limit the Sellers' or the Company's
obligations with respect to, or liabilities for breach or inaccuracies of,
representations, warranties, covenants, agreements, disclosures or other
obligations hereunder. The Sellers shall in particular not be excused from any
act or omission because of a failure by the Purchaser, the Parent or their
agents to uncover information material to the transaction, or failure to
consider as material such information as is uncovered. Such failure shall in no
circumstances be deemed a contributory negligence allowing a reduction of any
damages due by the Sellers for any cause whatsoever.
V.9 EXCLUSIVE REMEDY
The sole and exclusive remedy of any party for any misrepresentation or any
breach of a representation, warranty or covenant set forth in or made pursuant
to this Agreement shall be a claim for indemnification under and pursuant to
this Article V, including payment from the Escrow Account, provided, however,
that the Purchaser and the Parent shall be entitled to specific performance and
injunctive relief where available by law.
ARTICLE VI - MISCELLANEOUS
VI.1 NOTICES
All notices, requests, demands, waivers and other communications (together
"NOTICES"), required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been duly given if sent by registered mail
or by telefax with a confirmation by registered mail, or by overnight delivery
service confirmed by email or telefax, as follows:
a. if to the Sellers, to:
VALOROUS TRADING PTE LTD, SINGAPOUR
P.a. Xx. Xxxx-Xxxxxxx Xxxxxx
Attorney-at-Law
Place du Molard, 3
CH-1211 Geneve 3
and to:
XX. XXXXX X. XXXXXXX
Xxxxxx xx xx Xxxxxxxxx, 0
XX-0000 Xxxxx-Xxxxxx
and to:
XX. XXXX XXX XXXXXX
Xx Xxxxxxxx, 00
XX-0000 Xxxx
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and to:
MR. XXXX NIESOR
Xxxxxx xx Xxxxxxx, 00 X
XX-0000 Xxxx
and to:
XX. XXXX-XXXXXXX XXXXXX
Xxxxxxxx-xx-Xxx
Xxxxx xx Xxxxxx, 0
XX-0000 Geneve 3
b. if to the Purchaser or the Parent, to:
ILEX ONCOLOGY, INC.
Attn: Mr. Xxxxxxx Xxxx
President and CEO
0000 Xxxxxxx Xxxx Xxxx.
XXX-Xxx Xxxxxxx, Xxxxx 00000-0000
Fax: x0 000 000 00 00
with a copy to:
ILEX ONCOLOGY, INC.
Attn: Xxxxxx X. Xxxxxxxxx
Vice President and General Counsel
0000 Xxxxxxx Xxxx Xxxx.
XXX-Xxx Xxxxxxx, Xxxxx 00000-0000
Fax: x0 000 000 00 00
and to:
FULBRIGHT & XXXXXXXX L.L.P.
Attn: Xxxxxxx X. Xxxxxx, Esq.
Attorney at Law
000 Xxxxxxx Xxxxxx, Xxxxx 0000
XXX-Xxx Xxxxxxx, Xxxxx 00000
Fax: x0 000 000 00 00
or to such other substitute person or address as any party shall from time to
time specify by notice in writing to the other parties.
Notices and communications made by fax shall be deemed to be received on the
date of dispatch provided that an answer-back confirmation is available,
irrespective of the date of receipt of the confirmation by registered mail.
Notices given by registered mail only are deemed to be received upon delivery to
the addressee.
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VI.2 ENTIRE AGREEMENT
This Agreement (including the Schedules, Exhibits and Annexes) constitutes the
entire agreement between the parties hereto and supersedes all prior agreements
and undertakings, oral or written, between the parties hereto with respect to
the subject matter hereof, except as stated and provided in the Investor Rights
Agreement.
VI.3 SEVERABILITY OF PROVISIONS
If any term or provision of this Agreement or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement and the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and be enforceable to the fullest extent permitted
by law.
VI.4 BINDING EFFECT, BENEFIT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. Nothing in this Agreement,
express or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
VI.5 ASSIGNABILITY
This Agreement shall not be assigned by any party hereto without the prior
written consent of the other parties hereto. The Purchaser may however assign
without the Sellers' prior consent all its rights under the Agreement to any
Associate controlled by the Parent.
VI.6 AMENDMENT AND MODIFICATION; WAIVER
This Agreement may be amended or modified by a written instrument duly executed
by the Purchaser, the Parent and the Sellers at any time with respect to any of
the terms contained herein. No waiver by any party of any provision hereof shall
be effective unless explicitly set forth in writing and executed by the party so
waiving. Except as provided in the preceding sentence, no action taken pursuant
to this Agreement, including, without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representations, warranties, covenants, or
agreements contained herein, and in any documents delivered or to be delivered
pursuant to this Agreement and in connection with the Closing hereunder. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent breach or a
waiver of any other provision of this Agreement.
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VI.7 ANNOUNCEMENTS
(a) Employees
The transactions contemplated by this Agreement shall be announced to
the employees of the Company prior to or simultaneous with any press
release or public announcement in a form to be agreed upon by the
parties and in accordance with applicable laws.
(b) Press Release
No announcement concerning this sale and purchase will be made
before, on or after Closing by any party to this Agreement except as
required by law or any competent regulatory authority (provided that
in any such case a party required to make such an announcement has,
where reasonably practicable, first consulted the other party and
taken into account the reasonable comments, objections and
requirements of the other party) or with the written approval of the
other party hereto (such approval not to be unreasonably withheld or
delayed).
VI.8 CONFIDENTIALITY
The parties agree to keep the terms of this Agreement and any non-public
information acquired during the course of the negotiations having led to this
Agreement strictly confidential subject to applicable securities laws.
VI.9 ADVISER'S FEES; EXPENSES
Except as otherwise specifically provided in this Agreement, each of the parties
shall bear its own fees and costs incident to this Agreement and the
transactions contemplated hereby, including those of its financial, technical,
legal and other advisers.
VI.10 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the laws of
Switzerland.
VI.11 ARBITRATION
(a) All disputes arising out of or in connection with the present
Agreement that cannot be settled by mutual agreement shall be finally
settled by arbitration to the exclusion of the ordinary courts, by a
three-person arbitral tribunal (the "ARBITRAL TRIBUNAL") in
accordance with the rules of the London Court of International
Arbitration, as currently in force, except as modified by this
Agreement.
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(b) In the event of such dispute, the Sellers shall jointly appoint one
arbitrator, the Purchaser and Parent jointly shall appoint one
arbitrator, and the so-appointed arbitrators shall jointly appoint a
third arbitrator who shall act as the president of the Arbitral
Tribunal (the "PRESIDENT"). Should either party fail to appoint its
arbitrator within thirty days from the date of appointment of the other
party's arbitrator, or, if the two appointed arbitrators cannot agree
on the President within fifteen days from the date of appointment of
the second arbitrator, the necessary appointment shall be made by
Chairman of the London Court of International Arbitration, at the
request the more diligent party. Such appointment shall be final and
binding on the parties hereto. The Arbitral Tribunal shall have its
seat in London and the arbitration proceedings, including arguments and
briefs, shall be conducted in English.
(c) The parties hereby agree that judgment on the arbitration award may be,
but is not required to be, entered by any court of competent
jurisdiction The award shall be delivered to the parties by the
Arbitral Tribunal.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date written below.
-------------------------
Valorous Trading PTE Ltd.
-------------------------
Xxxxx Xxxxxxx
-------------------------
Xxxx-Xxxxxxx Roguet
-------------------------
Mong Xxx Xxxxxx
-------------------------
Xxxx Niesor
ILEX ACQUISITIONS, INC.
By:
----------------------------
Date:
Name:
Title:
ILEX ONCOLOGY, INC.
By:
----------------------------
Date:
Name:
Title:
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LIST OF ANNEXES AND EXHIBITS
ANNEX III.2.(b) The Corporate Documents of the Company
ANNEX III.2.(f) The Accounts and the budget for the 2001 fiscal year
ANNEX III.2.(h)(i) Aging schedule of all Accounts Receivable of the
Company outstanding on 31 January, 2001
ANNEX III.2.(h)(ii) List of all Accounts Receivable written off by the
Company as uncollectible during the three years
before the date of the Agreement
ANNEX III.2.(j)(i) List of changes which occurred in the Company since
31 December, 2000
ANNEX III.2.(i) Capital Improvements
ANNEX III.2.(j)(ii) List of agreements, arrangements or transactions
which the Company has entered into in the ordinary
course since 31 December, 2000
ANNEX III.2(j) Confirmation from the Debt Collection Office
ANNEX III.2.(n) List of all real property or premises owned or
leased in whole or in part and the annual rent
amounts payable by the Company
ANNEX III.2.(o) List of equipment and other tangible assets owned by
the Company
ANNEX III.2.(p)(i) List and brief description of all Intellectual
Property Rights registered by the Company or used by
the Company
ANNEX III.2.(p)(ii) List of Intellectual Property Rights warranted by
Sellers
ANNEX III.2.(q) List of all written or oral contracts
ANNEX III.2.(s)(i) List of licenses, permits and approvals necessary to
the conduct of the Business
ANNEX III.2.(s)(ii) List of clinical trials performed by the Company and
list of applications made by the Company for
marketing approval
ANNEX III.2.(t) List of insurance policies maintained by the Company
ANNEX III.2.(v)(i) List of all employees of the Company, including
details about salary, notice periods, etc.
ANNEX III.2.(v)(ii) List of contracts of employment giving rise to
damages or compensation upon termination
ANNEX III.2.(w)(i) Details of Pension Fund
ANNEX III.2.(w)(ii) Pension Fund Certificate
ANNEX III.2.(y)(i) List of all bank accounts of the Company with recent
credit and debit balances
ANNEX III.2.(y)(ii) List of payments made on bank accounts after the
date of credit and debit balances
ANNEX III.2.(z) List of the Sellers, directors and officers of the
Company with competing interests
ANNEX III.2.(ab) List of agreements between the Sellers and the
Company which are not terminated on the date of the
Agreement
ANNEX III.2.(ae) List of important suppliers of the Business
ANNEX III.2.(af) List of royalties or similar items or amounts paid
by the Company
ANNEX III.2.(ag) List of business relationship of clients, customers
and suppliers of the Business adversely affected by
the Agreement
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EXHIBIT 1 Employment Agreement among the Company and Seller 2
EXHIBIT 2 Escrow Agreement I
EXHIBIT 3 Escrow Agreement II
EXHIBIT 4 Investor Rights Agreement