MASTER COMBINATION AGREEMENT
by and among
NDA CLINICAL TRIAL SERVICES, INC.,
VARIOUS STOCKHOLDERS OF NDA,
and
GLOBAL UNILABS CLINICAL TRIALS, LTD.
Dated as of January 31, 1997
MASTER COMBINATION AGREEMENT
This Master Combination Agreement dated as of January 31, 1997, by and
among:
NDA CLINICAL TRIAL SERVICES, INC. ("NDA"), a corporation organized
under the laws of the State of Delaware, with its principal place
of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇;
VARIOUS STOCKHOLDERS OF NDA ("NDA Stockholders"), as set forth on Schedule
PRE-2, not including GUCT (as defined below); and
GLOBAL UNILABS CLINICAL TRIALS, LTD. ("GUCT"), a British Virgin
Islands corporation, with its principal place of business at 207-
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇.
W I T N E S S E T H :
WHEREAS, NDA, GUCT and the NDA Stockholders wish to enter into various
transactions pursuant to which:
(i) Prior to the events set forth in (ii), (iii) and (iv)
below, certain NDA Stockholders and GUCT will convert $2,755,650 of outstanding
loans to NDA into an aggregate of 18,371 shares of NDA Class A Voting Common
Stock ("NDA Class A Stock") as set forth in Section 1.2 below, and GUCT will
convert (pound)326,419, or its US Dollar equivalent, of outstanding loans to UCT
(as hereinafter defined) in exchange for 326,419 shares of UCT as set forth in
Section 1.4 below;
(ii) Immediately following the events set forth in (i) above,
the NDA Stockholders and GUCT will transfer all of their outstanding shares of
capital stock of NDA to a newly formed holding company to be incorporated under
the laws of Delaware ("International") in exchange for the issuance of 70,101
shares of the capital stock of International, as set forth in Section 1.3 below;
(iii) Simultaneously with the events set forth in (ii) above,
GUCT will transfer all of its outstanding shares of Unilabs Clinical Trials
Limited ("UCT"), a company incorporated in England and Wales (Registered No.
2626808), with its registered office at Bewlay House, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and all its outstanding shares of Pharmasoft, SA,
("Pharmasoft"), a Swiss corporation, with its principal place of business at ▇▇,
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ to International in exchange for
the issuance of 82,597 shares of the capital stock of International, as set
forth in Section 1.4 below; and
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(iv) Simultaneously with the events set forth in (ii) and
(iii) above, GUCT will make a capital contribution aggregating $2,203,050 in
exchange for the issuance of an aggregate of 14,687 shares of the capital stock
of International, as set forth in Section 1.5 below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. PARTICIPATION IN TRANSACTION; SALE AND EXCHANGE OF
SECURITIES.
Subject to the terms and conditions hereof, and in reliance upon the
representations, warranties and agreements contained herein.
1.1. Formation and Capitalization of International. Promptly after the
date hereof, and prior to the Closing (as defined in Section 2.1 below) the
parties will cooperate to form and establish under the laws of Delaware a
corporation to be known as UCT International, Inc. (previously defined as
"International"). International's initial authorized capital shall consist of
22,000,000 shares of common stock, $.01 par value ("International Shares"), and
3,000,000 shares of Preferred Stock ("International Preferred Shares"), to be
issued in series from time to time with such rights, preferences and privileges
as will be determined by the International Board of Directors subject to the
terms of the International Stockholders' Agreement as defined in Section 1.6
below. The Certificate of Incorporation and By-laws of International will be in
the forms attached hereto as Annex 1.1.
1.2. Conversion of NDA Loans to Equity. At the Closing and immediately
prior to the transactions described in Sections 1.3, 1.4 and 1.5 below, GUCT,
Poly Ventures II, Limited Partnership ("Poly"), the Long Island Venture Fund,
L.P. ("LIVF") and ▇▇▇▇▇ ▇. Deutsch ("Deutsch") (the latter three persons each
being NDA Stockholders and parties hereto, which entities and GUCT shall
collectively be known as the "Converting NDA Stockholders") shall convert the
principal balance and accrued but unpaid interest on their outstanding loans to
NDA to newly issued shares of NDA Class A Stock (the "Converted NDA Shares") at
the rate of $150 of outstanding principal and accrued but unpaid interest for
each Converted NDA Share. The principal balance and accrued interest on said
loans aggregate $1,890,900 for GUCT (which includes the "Deutsch Indebtedness"
as defined below), $580,000 for Poly, $239,750 for LIVF and $45,000 for Deutsch.
Immediately prior to said conversion, ▇▇▇▇▇ ▇▇▇▇▇▇▇, who currently is owed the
principal amount of $411,000 plus accrued interest of $25,000 by NDA (the
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"Deutsch Indebtedness"), will transfer his entire right, title and interest to
the Deutsch Indebtedness to GUCT and GUCT will pay Deutsch an amount equal to
the Deutsch Indebtedness, against receipt of said assignment.
1.3. Exchange of Outstanding and Converted NDA Shares for International
Shares. At the Closing and immediately after the transaction described in
Section 1.2 above, (i) the NDA Stockholders and GUCT shall transfer and assign
to International all of their respective shares of capital stock of NDA,
representing all outstanding capital stock of NDA prior to the transactions
contemplated hereby ("Outstanding NDA Shares," which term does not include the
Converted NDA Shares), subject to Section 9.1(c); and (ii) each of the
Converting NDA Stockholders shall transfer and assign to International all of
their Converted NDA Shares; all of said shares specified in (i) and (ii) shall
be exchanged for an aggregate of 70,101 International Shares. Such Outstanding
NDA Shares and Converted NDA Shares shall be exchanged on the basis of one (1)
International Share for every one (1) Outstanding or Converted NDA Share
transferred to International by an NDA Stockholder or GUCT. The Outstanding NDA
Shares and Converted NDA Shares shall not be cancelled or redeemed as a result
of said exchange; rather all such shares shall continue in existence as issued
and outstanding shares of NDA and shall be owned by International immediately
upon and as of the Closing.
1.4. Conversion of UCT Loans; Exchange of UCT Shares and Pharmasoft
Shares by GUCT for International Shares. At the Closing and immediately after
the transaction described in Section 1.2, and simultaneously with the
transaction described in Section 1.3 above, GUCT shall (i) convert
(pound)326,419 or its US Dollar equivalent, in loans plus accrued interest to
UCT into 326,419 additional shares of UCT and (ii) transfer and assign to
International 2,771,547 shares of UCT (the "UCT Shares"), representing all
outstanding capital stock of UCT, and all of its shares of Pharmasoft,
representing all outstanding capital stock of Pharmasoft (the "Pharmasoft
Shares"), in exchange for an aggregate of 82,597 shares of International, to be
exchanged on the basis of one (1) International Share for each 34.088 UCT Shares
so exchanged and 2.9 International Shares for each Pharmasoft Share so
exchanged. Such UCT Shares and Pharmasoft Shares shall not be cancelled or
redeemed as a result of such exchanges; rather, such shares shall continue to
exist as outstanding shares of UCT and Pharmasoft, as the case may be, and shall
be owned by International, immediately upon and as of the Closing.
1.5. Purchase of International Shares by GUCT. At the Closing and
simultaneously with the transactions described in Sections 1.3 and 1.4 above,
the parties will cause International to issue and sell to GUCT and GUCT will
purchase 14,687 newly issued International Shares (such Shares, and the new
Shares described in Section 1.6 below, collectively the "New International
Shares") at
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a purchase price of $150 per share (the "New International Shares Purchase
Price"), or a total purchase price of $2,203,050.
1.6. Purchase of International Shares by certain NDA Stockholders. (i)
At or prior to the Closing, the parties will cause International to offer to
sell to certain NDA Stockholders identified on Schedule 1.6 (collectively,
together with GUCT, and together with Poly and LIVF, to the extent they purchase
new International Shares pursuant to this Section 1.6, the "Contributing
International Stockholders"), during the thirty (30) day period following the
Closing (the "Investment Period"), pro rata, based on the outstanding shares of
NDA common stock owned by such Stockholders immediately prior to the Closing, an
aggregate of 1,667 newly-issued shares of common stock of International
(collectively, together with the shares referred to in Section 1.5 above, the
"New International Shares"), at a purchase price per share equal to the New
International Shares Purchase Price.
(ii) Within five days after the end of the Investment Period,
International will notify the NDA Stockholders who have agreed to purchase their
full allotment of New International Shares as aforesaid (the "Purchasing
Stockholders") as to the number of New International Shares, if any, not so
purchased pursuant to this Section, and such Purchasing Stockholders shall have
the further right, exercisable at any time and from time to time during the
thirty-five (35) day period following the Investment Period, to purchase all
remaining New International Shares, pro rata, based on the outstanding shares of
NDA common stock then owned by the Purchasing Stockholders.
(iii) Within five days after the end of such 35-day period,
International will notify Poly and LIVF as to the number of New International
Shares, if any, not so purchased pursuant to Section 1.6(i) and (ii) above,
whereupon Poly and LIVF shall have the right, exercisable at any time during the
(15) fifteen-day period commencing after receipt of such information, to
purchase, pro rata, based on the outstanding shares of NDA Common Stock owned by
them immediately prior to the Closing, the balance of the New International
Shares not so purchased pursuant to Section 1.6(i) and (ii) above, at the New
International Shares Purchase Price. Poly and LIVF each shall have similar over
allotment rights to purchase the remaining shares, if any, not purchased by the
other, during such 15-day period. Within five (5) days after the end of such
15-day period, International will notify GUCT as to the number of New
International Shares, if any, not so purchased pursuant to this Section,
whereupon GUCT shall have the right, exercisable at any time during the (15)
fifteen-day period commencing after receipt of such information, to purchase the
balance of the New International Shares not so purchased pursuant to this
Section, at the New International Shares Purchase Price.
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1.7. Other Agreements to be Executed and Delivered at the Closing. At
the Closing, immediately after the transactions described in Section 1.2 through
Section 1.6 above, the parties will execute the following agreements, in
addition to any other agreements, schedules and annexes hereby contemplated:
(i) a Stockholders' Agreement (the "International
Stockholders' Agreement"), in the form annexed hereto as Annex 1.71, to
be executed by International and all parties hereto receiving
International Shares ("International Stockholders") as specified above;
(ii) a Registration Rights Agreement (the
"International Registration Rights Agreement"), in the form annexed
hereto as Annex 1.72, to be executed by International and all
International Stockholders;
(iii) an Escrow, Indemnification and Arbitration
Agreement (the "International Escrow Agreement"), in the form annexed
hereto as Annex 1.73, to be executed by International and all
International Stockholders;
(iv) an Employment Agreement, in the form annexed
hereto as Annex 1.74, to be executed by NDA, as employer, International
and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Deutsch Employment
Agreement");
(v) an Employment Agreement, in the form annexed
hereto as Annex 1.75, to be executed by NDA, as employer, International
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇▇▇▇▇▇▇▇
Employment Agreement");
(vi) an Employment Agreement, in the form annexed
hereto as Annex 1.76, to be executed by NDA, as employer, International
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "▇▇▇▇▇▇ Employment
Agreement");
(vii) Non-Competition Agreements, each in the form
annexed hereto as Annex 1.77, to be executed by UCT and each of ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ Hokfelt (collectively the "Hokfelt Non-Competition
Agreements"); and
(viii) a Consulting Agreement, in the form annexed
hereto as Annex 1.78, to be executed between NDA and GUCT, with respect
to the consulting services of ▇▇▇▇ Hokfelt (the "Consulting
Agreement").
SECTION 2. CLOSING DATE; DELIVERIES, ETC.
2.1. Closing. The Closing of the transactions specified
in Sections 1.2 through Section 1.6 above (the "Closing"), shall be
held on January __, 1997, or the first business day thereafter
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following compliance with the conditions of Closing set forth in Sections 9 and
10 hereof, or at such later date as may be approved in writing by the parties,
but no later than March 31, 1997 (the date and time of Closing is referred to
herein as the "Closing Date"). The Closing shall be held at the offices of
▇▇▇▇▇▇▇, Lippe, Goldstein, Wolf & ▇▇▇▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be mutually agreed to by the
parties. Consequences of a failure to close are governed by Section 14 herein
and by the provisions of the International Escrow Agreement.
2.2. Deliveries. At the Closing, the following
deliveries will be made by each of the parties specified in
connection with the specific transactions identified:
A. With respect to the Conversion of Loans to Equity as
described in Section 1.2:
1. Each of the Converting NDA Stockholders will deliver
to NDA:
(i) an Instrument of Conversion executed by each
Converting NDA Stockholder in the form annexed hereto as Annex
2.21 (the "Instrument of Conversion");
(ii) a Warrant Termination Agreement terminating the
warrants previously issued to GUCT and Poly and referred to on
Schedule 3.4 as the "Warrants to be Terminated" (this
agreement to be delivered by GUCT and Poly only) in the form
annexed hereto as Annex 2.21A.
2. NDA will deliver to each of the Converting NDA
Stockholders:
(i) the Instrument of Conversion executed by NDA;
(ii) a stock certificate, duly executed, registered
in the name of such stockholder, representing the Converted
NDA Shares required to be delivered to each stockholder
pursuant to the Instrument of Conversion executed by NDA and
such stockholder.
3. Deutsch will deliver to GUCT:
(i) an assignment of the Deutsch Indebtedness in the
form annexed hereto as Annex 2.22.
4. GUCT will deliver to ▇▇▇▇▇ ▇▇▇▇▇▇▇:
(i) in cash, certified check or wire transfer an
amount equal to the Deutsch Indebtedness.
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B. With respect to the Exchange of Outstanding and Converted
NDA Shares for International Shares as described in Section 1.3:
1. GUCT, each NDA Stockholder and each Converting NDA
Stockholder shall deliver to International:
(i) a stock certificate representing each such
stockholder's ownership of Outstanding and Converted NDA
Shares, as the case may be, duly endorsed or with executed
stock powers attached, effecting the transfer of such
stockholder's complete right, title and interest in such
shares to International or, in lieu thereof, an Affidavit of
Lost Certificate in connection with such shares;
(ii) an Instrument of Exchange executed by each of
GUCT and each NDA Stockholder and each Converting NDA
Stockholder, respectively, in the form annexed hereto as Annex
2.23 (the "NDA Instrument of Exchange").
2. NDA shall deliver to GUCT:
(i) necessary consents of the Board of Directors and
stockholders of NDA to the transactions contemplated
herein as required by law and NDA's governing
instruments;
(ii) opinions of counsel for NDA as to various
matters in the forms set forth as Annex 2.24;
(iii) such additional documentation as counsel for
the parties shall reasonably require to give effect to the
transactions contemplated hereby;
(iv) copies of Non-Competition Agreements executed
in the favor of NDA by Messrs. Deutsch, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇, respectively; and
(v) any required consents of third parties such as
regulatory agencies, lenders, government approvals, etc.,
provided that non-delivery thereof by any party, after the use
of reasonable efforts as provided in Section 13.10, shall not
give rise to liability of such party hereunder, provided
further, however, that delivery of such consents shall
constitute conditions as provided in Section 10.
3. The parties will cause International to deliver to
GUCT and each NDA Stockholder and each Converting NDA Stockholder:
(i) a stock certificate, duly executed, registered
in the name of each such stockholder, representing each
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stockholder's entitlement to International Shares pursuant to
the Instrument of Exchange executed by International and such
stockholder described in this subparagraph 2.2(B);
(ii) the NDA Instrument of Exchange duly executed by
International.
C. With respect to the Conversion of UCT Loans and Exchange
of UCT Shares and Pharmasoft Shares by GUCT for International
Shares as described in Section 1.4:
1. GUCT shall deliver to International:
(i) a share certificate, duly registered in the name
of GUCT, representing its ownership of all outstanding
shares of (i) UCT and (ii) Pharmasoft;
(ii) a Stock Transfer Form executed by GUCT in the
form annexed hereto as Annex 2.25 (the "UCT/Pharmasoft
Instrument of Exchange") effecting the transfer of GUCT's
complete right, title and interest in such shares to
International.
(iii) documents evidencing the conversion of its
loans and accrued interest, aggregating (pound)326,419, or its
US Dollar equivalent, to 326,419 additional shares of UCT.
2. The parties will cause International to deliver to
GUCT:
(i) a stock certificate, duly registered in the name
of GUCT, representing GUCT's entitlement to International
Shares pursuant to the UCT/Pharmasoft Instrument of Exchange
executed by International and GUCT;
(ii) The UCT/Pharmasoft Instrument of Exchange
executed by International.
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D. With respect to the Purchase of International Shares by
Contributing International Stockholders as described in Section 1.5
and 1.6:
1. GUCT shall deliver to International, in connection
with its purchase of New International Shares on the Closing Date:
(i) cash, certified check or wire transfer, in the
amount of $2,203,050;
(ii) a subscription agreement executed by GUCT.
2. Each of the Contributing International Stockholders will
deliver to International, which delivery, in the case of the New International
Shares as provided in Section 1.6 above, may occur after the Closing Date:
(i) payment in cash, certified check or wire
transfer, of the New International Shares Purchase Price
multiplied by the number of New International Shares being
purchased by such Contributing International
Stockholders;
(ii) a subscription agreement executed by each of the
Contributing International Stockholders with respect to the
purchase of such New International Shares in the
form annexed hereto as Annex 2.26.
3. The parties will cause International to deliver to each of
the Contributing International Stockholders, which delivery, in the case of the
NDA Stockholders, may occur after the Closing Date, as provided in Section 1.6
above:
(i) a subscription agreement executed by
International with respect to the purchase of such New
International Shares in the form annexed hereto as Annex 2.26;
(ii) a stock certificate, duly executed, registered
in the name of such stockholder, representing the New
International Shares being purchased by such stockholder.
E. Additional deliveries to be made at Closing are as
follows:
1. Each NDA Stockholder shall deliver to NDA:
(i) an executed waiver of preemptive rights in the
form annexed hereto as Annex 2.27;
(ii) an agreement terminating the Shareholders'
Agreement among NDA and its stockholders dated December
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15, 1994, as amended, in the form annexed hereto as Annex
2.28 (the "Shareholders' Agreement Termination");
(iii) an agreement terminating the Registration
Rights Agreement among NDA and its stockholders dated December
15, 1994, as amended, in the form annexed hereto as Annex 2.29
(the "Registration Rights Agreement
Termination");
(iv) the International Stockholders' Agreement, the
International Registration Rights Agreement and
International Escrow Agreement, duly executed by each
such NDA Stockholder;
(v) an agreement, in the form of Annex 2.30 hereto,
terminating, to the extent they are parties to the following
documents, (i) the Stock Purchase Agreement dated August 1,
1994 by and among Poly, NDA and NDA's predecessor corporation,
NDA Clinical Trial Services, Inc., a New York corporation (the
"First Stock Purchase Agreement Termination") and (ii) the
Stock Purchase Agreement dated December 15, 1994 between NDA
and certain NDA stockholders (the "Second Stock Purchase
Agreement Termination"); and
(vi) such additional documentation as counsel for the
parties shall reasonably require to give effect to the
transactions contemplated hereby.
2. NDA shall deliver to GUCT:
(i) a Termination Agreement, duly executed by NDA, in
the form annexed hereto as Annex 2.31 (the "Termination
Agreement"), terminating the Stock Purchase Agreement between
NDA and UniHolding Corporation, a Delaware corporation
("UniHolding"), dated September 27,
1995;
(ii) the Shareholders' Agreement Termination, duly
executed by NDA and the NDA Stockholders;
(iii) the Registration Rights Agreement Termination,
duly executed by NDA and the NDA Stockholders;
(iv) the First Stock Purchase Agreement Termination
and Second Stock Purchase Agreement Termination, duly executed
by NDA and the NDA Stockholders parties thereto;
(v) a Warrant Exchange and Substitution Agreement
evidencing the exchange and substitution of International as
the issuer of warrants in favor of Deutsch, Poly and LIVF, in
the form of Annex 2.32 hereto;
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(vi) the Consulting Agreement, duly executed by NDA;
(vii) such additional documentation as counsel for
the parties shall reasonably require to give effect to the
transactions contemplated hereby;
(viii) any required consents of third parties such as
regulatory agencies, lenders, government approvals, etc.,
provided that non-delivery thereof by any party, after the use
of reasonable efforts as provided in Section 13.10, shall not
give rise to liability of such party hereunder, provided
further, however, that delivery of such consents shall
constitute conditions as provided in Section 10; and
(ix) A non-competition agreement in the form annexed
hereto as Annex 2.33 (the "Poly/LIVF Non- Competition
Agreement"), setting forth the agreement of Poly and LIVF not
to invest in businesses competitive with the business of
International, duly executed by Poly and LIVF.
3. NDA shall deliver the Deutsch Employment Agreement,
the ▇▇▇▇▇▇▇▇▇▇▇ Employment Agreement and the ▇▇▇▇▇▇ Employment
Agreement to Messrs. Deutsch, ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, respectively.
4. GUCT shall deliver to NDA and the NDA Stockholders:
(i) the Termination Agreement duly executed by GUCT
and UniHolding;
(ii) the Shareholders' Agreement Termination, duly
executed by GUCT and UniHolding;
(iii) the Registration Rights Agreement Termination,
duly executed by GUCT and UniHolding;
(iv) any necessary consents of the Board of Directors
and stockholders of GUCT and UniHolding to the transactions
contemplated herein as required by law and GUCT's governing
instruments;
(v) an opinion of counsel for GUCT and UniHolding as
to various matters in the form set forth on Annex 2.34;
(vi) a non-competition agreement in the form annexed
hereto as Annex 2.35 (the "GUCT Non-Competition Agreement"),
setting forth the agreement of GUCT and UniHolding on behalf
of itself and the various entities each owns or controls, not
to compete with the business of International, duly executed
by UniHolding and GUCT;
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(vii) the Consulting Agreement, duly executed by
GUCT;
(viii) such additional documentation as counsel for
the parties shall reasonably require to give effect to the
transactions contemplated hereby;
(ix) an agreement restricting further assignment of
that certain Cooperation Agreement between GUCT, as successor
in interest to UniHolding, and NDA, dated February 28, 1995
(the "Cooperation Agreement"), and the License Agreement and
Marketing Agreement of even date therewith, which are
appendices thereto, in the form of Annex 2.36 hereto); and
(x) a letter agreement executed by UCT and JS
Pathology, Plc. ("JSP"), an affiliate of UCT, amending
the Analytical Service and Support Agreements in effect
between UCT and JSP, in the form of Annex 2.36A hereto;
and
(xi) any required consents of third parties such as
regulatory agencies, lenders, government approvals, etc.,
provided that non-delivery thereof by any party, after the use
of reasonable efforts as provided in Section 13.10, shall not
give rise to liability of such party hereunder, provided
further, however, that delivery of such consents shall
constitute conditions as provided in Section 9.
5. GUCT shall cause UCT to deliver to NDA and NDA
Stockholders:
(i) necessary consents of the Board of Directors and
stockholders of UCT to the transactions contemplated
herein as required by law and UCT's governing
instruments;
(ii) an opinion of counsel for UCT as to various
matters in the form set forth on Annex 2.37;
(iii) such additional documentation as counsel for
the parties shall reasonably require to give effect to the
transactions contemplated hereby; and
(iv) any required consents of third parties such as
regulatory agencies, lenders, government approvals, etc.,
provided that non-delivery thereof by any party, after the use
of reasonable efforts as provided in Section 13.10, shall not
give rise to liability of such party hereunder, provided
further, however, that delivery of
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such consents shall constitute conditions as provided in
Section 9.
6. GUCT shall cause Pharmasoft to deliver to NDA:
(i) necessary consents of the Board of Directors and
stockholders of Pharmasoft to the transactions
contemplated herein as required by law and Pharmasoft's
governing instruments;
(ii) an opinion of counsel for Pharmasoft as to
various matters in the form set forth on Annex 2.38;
(iii) such additional documentation as counsel for
the parties shall reasonably require to give effect to the
transactions contemplated hereby; and
(iv) any required consents of third parties such as
regulatory agencies, lenders, government approvals, etc.,
provided that non-delivery thereof by any party, after the use
of reasonable efforts as provided in Section 13.10, shall not
give rise to liability of such party hereunder, provided
further, however, that delivery of such consents shall
constitute conditions as provided in Section 9.
7. International shall deliver:
(i) the International Stockholders' Agreement,
International Registration Rights Agreement,
International Escrow Agreement, Poly/LIVF Non-Competition
Agreement and GUCT Non-Competition Agreement, duly
executed by International, to all International
Stockholders;
(ii) the Deutsch, ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ Employment
Agreements, duly executed by International, to Messrs.
Deutsch, ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, respectively; and
(iii) the Hokfelt Non-Competition Agreements, duly
executed by International and each of the other parties
thereto, respectively.
8. Messrs. Deutsch, ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall
deliver their respective Employment Agreements to NDA and
International.
SECTION 3. REPRESENTATIONS AND WARRANTIES CONCERNING NDA
As of the execution of this Agreement and at the Closing Date, NDA
represents and warrants to all other parties hereto that, except as set forth in
any Schedule attached hereto:
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3.1. Organization, Qualifications and Corporate Power.
(a) NDA is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and is
duly licensed or qualified to transact business as a foreign corporation and is
in good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification. NDA has the corporate power and
authority to own and hold its properties and to carry on its business as now
conducted and as proposed to be conducted, to execute, deliver and perform on
behalf of NDA this Agreement, and all other agreements required to be executed
by any party in connection herewith, and all schedules, exhibits and annexes
contemplated or required by any such agreements (hereinafter, the "Other
Agreements").
(b) NDA does not (i) own of record or beneficially,
directly or indirectly, (A) any shares of capital stock or securities
convertible into capital stock of any other corporation or (B) any participating
interest in any partnership, joint venture or other non-corporate business
enterprise or (ii) control, directly or indirectly, any other entity.
3.2. Authorization of Agreements, etc.
(a) The execution and delivery by NDA of this
Agreement and the Other Agreements, the performance by NDA of its obligations
hereunder and thereunder, and the issuance, sale and delivery of the Converted
NDA Shares are, or at the Closing Date will have been, duly authorized by all
requisite corporate action and will not violate any provision of law, any order
of any court or other agency of government, the Certificate of Incorporation of
NDA or the By-laws of NDA (the "NDA Charter Documents"), all which are attached
as Schedule 3.2, or any provision of any indenture, agreement or other
instrument to which NDA, or its properties or assets is bound, or conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any such indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge, restriction, claim or
encumbrance of any nature whatsoever upon any of the properties or assets of NDA
or any of its subsidiaries.
(b) NDA has, or at the Closing Date will have
secured, any required waivers and consents from its stockholders or any other
person in connection with the execution and delivery by NDA of this Agreement
and the Other Agreements and the performance by NDA of its obligations hereunder
and thereunder, including but not limited to, the delivery of all Converted NDA
Shares issuable to the Converting NDA Stockholders under this Agreement, free of
any preemptive rights or right of first refusal, of any stockholders of NDA or
any other person.
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(c) The Converted NDA Shares have been duly
authorized and, when issued in accordance with this Agreement and the NDA
Charter Documents will be validly issued, fully paid and nonassessable with no
personal liability attaching to the ownership thereof. The Outstanding and
Converted NDA Shares are, and when delivered to International at the Closing,
will be, free and clear of all liens, charges, restrictions, claims and
encumbrances, except as set forth in the International Stockholders' Agreement
and International Registration Rights Agreement. The issuance, sale, delivery
and exchange of the Converted NDA Shares and Outstanding NDA Shares are not
subject to any preemptive right of stockholders of NDA or to any right of first
refusal or other right in favor of any person that has not been waived to the
extent necessary to permit the transactions contemplated by this Agreement to
occur.
3.3. Validity. Each of the Agreement and the Other
Agreements has been duly executed and delivered by NDA and
constitutes the legal, valid and binding obligation of NDA,
enforceable in accordance with its respective terms.
3.4. Capitalization. The authorized capital stock of NDA consists of
500,000 shares of NDA Class A Stock, of which 49,450 shares are issued and
outstanding, prior to the issuance of the Converted NDA Shares, and 50,000
shares of Class B Non-Voting common stock ("NDA Class B Stock") of which 2,280
shares are issued and outstanding. In addition, options to purchase 1,157 shares
have been granted pursuant to the Company's 1994 Stock Incentive Plan (the
"Stock Option Plan"). In addition, warrants for 3080 shares of NDA Class A Stock
have been granted, of which warrants for 1,925 shares NDA Class A Stock shall be
terminated as of the Closing Date pursuant to Section 2.2(A) hereof and warrants
for 1,155 shares of NDA Class A Stock shall be exchanged as of the Closing Date
for warrants to purchase shares of Common Stock pursuant to Section 2.2(E)(2)
hereof. None of such outstanding warrants have been exercised to date. The
stockholders of record and holders of subscriptions, warrants, options,
convertible securities and other rights (contingent or other) to purchase or
otherwise acquire equity securities of NDA and the number of shares of NDA Class
A Stock and NDA Class B Stock and the number of such subscriptions, warrants,
options, convertible securities, and other such rights held by each, are as set
forth in the attached Schedule 3.4. Except as set forth in the attached Schedule
3.4, (i) no person owns of record or is known to NDA to own beneficially any
shares of capital stock of NDA, (ii) no subscription, warrant, option,
convertible security or other right (contingent or other) to purchase or
otherwise acquire equity securities of NDA is authorized or outstanding and
(iii) there is no commitment by NDA to issue shares, subscriptions, warrants,
options, convertible securities or other such rights or to distribute to holders
of any of its equity securities any evidence of indebtedness or asset. Except as
set forth in the attached Schedule 3.4, NDA has no
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obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interest therein or to pay any dividend or
make any other distribution in respect thereof. Other than (i) the Stockholders'
Agreement being terminated hereby pursuant to the Stockholder's Agreement
Termination and (ii) as set forth on Schedule 3.13 hereof, there are, to the
best of NDA's knowledge, no voting trusts or agreements, stockholders'
agreements, pledge agreements, buy-sell agreements, rights of first refusal,
preemptive rights or proxies relating to any securities of NDA (whether or not
NDA is a party thereto). All of the outstanding securities of NDA were issued in
compliance with all applicable Federal and state securities laws.
3.5. Financial Statements. NDA has furnished to GUCT the audited
balance sheets of NDA as of December 31, 1994 and December 31, 1995 and the
related audited statements of income, stockholders equity and cash flows of NDA
for the years ended December 31, 1994 and 1995. NDA has also furnished to GUCT
its interim unaudited income statement and balance sheet for the eleven months
ended November 30, 1996. Copies of all such financial statements are attached on
Schedule 3.5 hereto. All such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial position of NDA at the dates and
for the periods to which they relate. Since the date of the November 30, 1996
balance sheet, (i) there has been no change in the assets, liabilities or
financial condition of NDA from that reflected in such balance sheet except for
changes in the ordinary course of business which in the aggregate have not been
materially adverse and (ii) none of the business, prospects, financial
condition, operations, property or affairs of NDA has been materially adversely
affected by any occurrence or development, individually or in the aggregate,
whether or not insured against.
3.6. Events Subsequent to the Date of the Balance Sheet. Since the date
of NDA's November 30, 1996 balance sheet, NDA has not (i) except as set forth in
the attached Schedules 3.6 and 3.13, or pursuant to this Agreement, issued any
stock, bond or other corporate security, (ii) borrowed any amount or incurred or
become subject to any liability (absolute, accrued or contingent), except
current liabilities incurred and liabilities under contracts entered into in the
ordinary course of business, (iii) discharged or satisfied any lien or
encumbrance or incurred or paid any obligation or liability (absolute, accrued
or contingent) other than current liabilities shown on its November 30, 1996
balance sheet and current liabilities incurred since the date of such balance
sheet in the ordinary course of business, (iv) declared or made any payment or
distribution to stockholders or purchased or redeemed any share of its capital
stock or other security, (v) mortgaged, pledged or subjected to lien any of its
assets, tangible or intangible, other than liens of current real property taxes
not yet due and payable, (vi) sold, assigned or transferred any of its
16
tangible assets except in the ordinary course of business, or cancelled any debt
or claim, (vii) sold, assigned, transferred or granted any exclusive license
with respect to any patent, trademark, trade name, service ▇▇▇▇, copyright,
trade secret or other intangible asset, (viii) suffered any loss of property or
waived any right of substantial value whether or not in the ordinary course of
business, (ix) made any change in officer compensation except in the ordinary
course of business and consistent with past practice, (x) made any material
change in the manner of business or operations of NDA, (xi) entered into any
transaction except in the ordinary course of business or as otherwise
contemplated hereby or (xii) entered into any commitment (contingent or
otherwise) to do any of the foregoing.
3.7. Litigation; Compliance with Law. NDA is not aware of any (i)
action, suit, claim, proceeding or investigation pending or threatened against
or affecting NDA, at law or in equity, or before or by any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) arbitration proceeding relating to
NDA pending under collective bargaining agreements or otherwise or (iii)
governmental inquiry pending or, to the best of NDA's knowledge, threatened
against or affecting NDA (including, without limitation, any inquiry as to the
qualification of NDA to hold or receive any license or permit). NDA has not
received any opinion or memorandum or legal advice from legal counsel to the
effect that it is exposed, from a legal standpoint, to any liability or
disadvantage which may be material to its business, prospects, financial
condition, operations, property or affairs. NDA is not in default with respect
to any order, writ, injunction or decree known to or served upon NDA of any
court or of any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign. There
is no action or suit by NDA pending or threatened against others. NDA has
complied with all laws, rules, regulations and orders applicable to its
business, operations, properties, assets, products and services, and NDA has all
necessary permits, licenses and other authorizations required to conduct its
business as conducted and as proposed to be conducted. There is no existing law,
rule, regulation or order, and NDA after due inquiry is not aware of any
proposed law, rule, regulation or order, whether Federal or state, which would
prohibit or restrict NDA from, or otherwise materially adversely affect NDA in,
conducting its business in any jurisdiction in which it is now conducting
business or in which it proposes to conduct business.
3.8. Proprietary Information of Third Parties. To the
best of NDA's knowledge, no third party has claimed or has reason
to claim that any person employed by or affiliated with NDA has (a)
violated or may be violating any of the terms or conditions of his
employment, non-competition or non-disclosure agreement with such
third party, (b) disclosed or may be disclosing or utilized or may
17
be utilizing any trade secret or proprietary information or documentation of
such third party or (c) interfered or may be interfering in the employment
relationship between such third party and any of its present or former
employees. No third party has requested information from NDA which suggests that
such a claim might be contemplated. To the best of NDA's knowledge, no person
employed by or affiliated with NDA has employed or proposes to employ any trade
secret or any information or documentation proprietary to any former employer,
and to the best of NDA's knowledge, no person employed by or affiliated with NDA
has violated any confidential relationship which such person may have had with
any third party, in connection with the development, manufacture or sale of any
product or proposed product or the development or sale of any service or
proposed service of NDA, and NDA has no reason to believe there will be any such
employment or violation. To the best of NDA's knowledge, none of the execution,
delivery or performance of this Agreement or the Other Agreements, or the
carrying on of the business of NDA as officers, employees or agents by any
officer, director or key employee of NDA, or the conduct or proposed conduct of
the business of NDA, will conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under any contract, covenant
or instrument under which any such person is obligated.
3.9. Title to Properties. NDA has good and marketable title to its
properties and assets reflected on its September 30, 1996 balance sheet or
acquired by it since the date of said balance sheet (other than properties and
assets disposed of in the ordinary course of business since the date of said
balance sheet), and all such properties and assets are free and clear of
mortgages, pledges, security interests, liens, charges, claims, restrictions and
other encumbrances, except for liens for current taxes not yet due and payable.
3.10. Leasehold Interests. Except as set forth in Schedule 3.10, (i)
each lease or agreement to which NDA is a party under which it is a lessee of
any property, real or personal, is a valid and subsisting agreement without any
default of NDA thereunder and, to the best of NDA's knowledge, without any
default thereunder of any other party thereto; (ii) no event has occurred and is
continuing which, with due notice or lapse of time or both, would constitute a
default or event of default by NDA under any such lease or agreement or, to the
best of NDA's knowledge, by any other party thereto; and (iii) NDA's possession
of such property has not been disturbed and, to the best of NDA's knowledge, no
claim has been asserted against NDA adverse to its rights in such leasehold
interests.
3.11. Taxes. NDA has filed all tax returns, Federal,
state, county and local, required to be filed by it, and NDA has
paid all taxes shown to be due by such returns as well as all other
taxes, assessments and governmental charges which have become due
18
or payable, including, without limitation, all taxes which NDA is obligated to
withhold from amounts owing to employees, creditors and third parties. All such
taxes with respect to which NDA has become obligated pursuant to elections made
by NDA in accordance with generally accepted practice have been paid and
adequate reserves have been established for all taxes accrued but not yet
payable. The Federal income tax returns of NDA have never been audited by the
Internal Revenue Service. No deficiency assessment with respect to or proposed
adjustment of NDA's Federal, state, county or local taxes is pending or, to the
best of NDA's knowledge, threatened. There is no tax lien, whether imposed by
any Federal, state, county or local taxing authority, outstanding against the
assets, properties or business of NDA. NDA is a C corporation. Neither NDA nor
any of its stockholders has ever filed a consent pursuant to Section 341(f) of
the Internal Revenue Code of 1986, as amended (the "Code"), relating to
collapsible corporations. As described in Schedule 3.11, NDA's net operating
losses for Federal income tax purposes, as set forth in the financial statements
referred to in Section 3.5, will be subject to the limitations imposed by
Section 382 of the Code and the full amount of such net operating losses may not
be available to offset the taxable income of NDA for the current fiscal year
and, to the extent not so used, succeeding fiscal years. Consummation of the
transactions contemplated by this Agreement or by any other agreement,
understanding or commitment (contingent or otherwise) to which NDA is a party or
by which it is otherwise bound will not have the effect of limiting NDA's
ability to use such net operating losses in full to offset such taxable income.
3.12. Insurance. NDA holds valid policies covering all of
the insurance required to be maintained by it under Section 12.4 of
the International Stockholders Agreement.
3.13. Material Agreements. Except as set forth in the attached Schedule
3.13(A), NDA is not a party to or, to the best of its knowledge otherwise bound
by, any written or oral contract or instrument or other restriction which
individually or in the aggregate could materially affect, adversely or
otherwise, the business, prospects, financial condition, operations, property or
affairs of NDA. Except as set forth in the attached Schedule 3.13(B), NDA is not
a party to or otherwise bound by any written or oral:
(a) distributor, dealer, manufacturer's representative or sales agency
contract or similar agreement which is not terminable on less than ninety (90)
days' notice without cost or other liability to NDA;
(b) sales contract which entitles any customer to a rebate or right of
set-off, to return any product to NDA after acceptance thereof or to delay the
acceptance thereof, or which varies in any material respect from NDA's standard
form contracts;
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(c) contract with any labor union (and, to the knowledge of
NDA, no organizational effort is being made with respect to any of
its employees);
(d) contract or other commitment with any supplier containing any
provision permitting any party other than NDA to renegotiate the price or other
terms, or containing any pay-back or other similar provision, upon the
occurrence of a failure by NDA to meet its obligations under the contract when
due or the occurrence of any other event;
(e) contract for the future purchase of fixed assets or for
the future purchase of materials, supplies or equipment in excess
of its normal operating requirements;
(f) contract for the employment of any officer, employee or other
person (whether of a legally binding nature or in the nature of informal
understandings) on a full-time or consulting basis which is not terminable on
notice without cost or other liability to NDA, except normal severance
arrangements and accrued vacation pay;
(g) bonus, pension, profit-sharing, retirement, hospitalization,
insurance, stock purchase, stock option or other plan, contract or understanding
pursuant to which benefits are provided to any employee of NDA (other than group
insurance plans applicable to employees generally);
(h) agreement or indenture relating to the borrowing of money
or to the mortgaging or pledging of, or otherwise placing a lien or
security interest on, any asset of NDA;
(i) guaranty of any obligation for borrowed money or
otherwise;
(j) voting trust or agreement, stockholders agreement, pledge
agreement, buy-sell agreement or first refusal or preemptive rights agreement
relating to any securities of NDA, except for the agreements being terminated by
the Stockholders' Agreement Termination, First and Second Stock Purchase
Termination and the
Termination Agreement;
(k) agreement, or group of related agreements with the same party or
any group of affiliated parties, under which NDA has advanced or agreed to
advance money or has agreed to lease any property as lessee or lessor;
(l) agreement or obligation (contingent or otherwise) to issue, sell or
otherwise distribute or to repurchase or otherwise acquire or retire any share
of its capital stock or any of its other equity securities;
20
(m) assignment, license or other agreement with respect to
any form of intangible property;
(n) agreement under which it has granted any person any
registration rights, other than the agreement being terminated by
the Registration Rights Agreement Termination;
(o) agreement under which it has limited or restricted its
right to compete with any person in any respect;
(p) other contract or group of related contracts with the same party
involving more than $10,000 or continuing over a period of more than six months
from the date or dates thereof (including renewals or extensions optional with
another party), which contract or group of contracts is not terminable by NDA
without penalty upon notice of thirty (30) days or less, but excluding any
contract or group of contracts with a customer of NDA for the sale, lease or
rental of NDA's products or services if such contract or group of contracts was
entered into by NDA in the ordinary course of business; or
(q) other contract, instrument, commitment, plan or arrangement, a copy
of which would be required to be filed with the Securities and Exchange
Commission (the "Commission") as an exhibit to a registration statement on Form
S-1 if NDA were registering securities under the Securities Act of 1933, as
amended (the "Securities Act").
NDA has in all material respects performed all obligations required to be
performed by it to date, has received no notice of default and is not in default
(with due notice or lapse of time or both) under any lease, agreement or
contract now in effect to which NDA is a party or by which it or its property
may be bound. NDA has no present expectation or intention of not fully
performing all its obligations under each such lease, contract or other
agreement, and NDA has no knowledge of any breach or anticipated breach of the
other party to any contract or commitment to which NDA is a party. NDA is in
full compliance with all of the terms and provisions of its Certificate of
Incorporation and By-laws, as amended.
3.14. Patents, Trademarks, etc. Set forth as Schedule 3.14 is a list
and brief description of all patents, patent rights, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇ applications,
trade names and copyrights, and all applications for such which are in the
process of being prepared, owned by or registered in the name of NDA, or of
which NDA is a licensor or licensee or in which NDA has any right, and in each
case a brief description of the nature of such right. NDA owns or possesses
adequate licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇ applications,
trade names, copyrights, manufacturing processes, formulae, trade secrets and
know-how
21
(collectively, "Intellectual Property") necessary or desirable to the conduct of
its business as conducted and as proposed to be conducted, and no claim is
pending or, to the best of NDA's knowledge, threatened to the effect that the
operations of NDA infringe upon or conflict with the asserted rights of any
other person under any Intellectual Property, and there is no basis for any such
claim (whether or not pending or threatened). To the best of NDA's knowledge, no
claim is pending or threatened to the effect that any such Intellectual Property
owned or licensed by NDA, or which NDA otherwise has the right to use, is
invalid or unenforceable by NDA, and there is no basis for any such claim
(whether or not pending or threatened). To the best of NDA's knowledge, all
technical information developed by and belonging to NDA which has not been
patented has been kept confidential. NDA has not granted or assigned to any
other person or entity any right to manufacture, have manufactured, assemble or
sell the products or proposed products or to provide the services or proposed
services of NDA, except to UniHolding and its related companies, pursuant to the
Cooperation Agreement and related agreements referred to in Section
2.2(E)(4)(ix).
3.15. Loans and Advances. Other than as set forth on Schedule 3.15, NDA
does not have any outstanding loans or advances to any person and is not
obligated to make any such loans or advances, except, in each case, for advances
to employees of NDA in respect of reimbursable business expenses incurred by
them in connection with their performance of services for NDA, not in excess, in
the case of each such employee, of $5,000.
3.16. Assumptions, Guaranties, etc. of Indebtedness of
Other Persons. NDA has not assumed, guaranteed, endorsed or
otherwise become directly or contingently liable on any
indebtedness of any other person (including, without limitation,
liability by way of agreement, contingent or otherwise, to
purchase, to provide funds for payment, to supply funds to or
otherwise invest in a debtor, or otherwise to assure a creditor
against loss), except for guaranties by endorsement of negotiable
instruments for deposit or collection in the ordinary course of
business.
3.17. Significant Customers and Suppliers. No customer or supplier
which was significant to NDA during the period covered by the financial
statements referred to in Section 3.5 or which has been significant to NDA
thereafter, has terminated, materially reduced or threatened to terminate or
materially reduce its purchases from or provision of products or services to
NDA, as the case may be.
3.18. Governmental Approvals. Subject to the accuracy of
the representations and warranties of the Converting NDA
Stockholders set forth in Section 8, no registration or filing
with, or consent or approval of or other action by, any Federal,
22
state or other governmental agency or instrumentality is or will be necessary
for (i) the valid execution, delivery and performance by NDA of this Agreement
and the Other Agreements; (ii) the issuance, sale and delivery of the Converted
NDA Shares to the Converting NDA Stockholders; and (iii) the delivery and
exchange with International of the Outstanding NDA Shares and Converted NDA
Shares, other than required filings, if any, pursuant to Federal or state
securities laws in connection with the issuance, sale and delivery of the
Converted NDA Shares, and the delivery and exchange of Outstanding and Converted
NDA Shares for International Shares.
3.19. Disclosure. Neither this Agreement, nor any Schedule or Annex to
this Agreement or the Other Agreements, contains an untrue statement of a
material fact or omits a material fact necessary to make the statements
contained herein or therein not misleading. None of the statements, documents,
certificates or other items prepared or supplied by NDA with respect to the
transactions contemplated hereby contains an untrue statement of a material fact
or omits a material fact necessary to make the statements contained therein not
misleading. There is no fact which NDA has not disclosed to GUCT and its counsel
in writing and of which NDA is aware which materially and adversely affects or
could materially and adversely affect the business, prospects, financial
condition, operations, property or affairs of NDA.
3.20. Offering of the Shares. Neither NDA nor any person acting on its
behalf has taken or will take any other action (including, without limitation,
any offer, issuance or sale of any security of NDA under circumstances which
might require the integration of such security with other NDA Class A Stock or
Class B Stock under the Securities Act or the rules and regulations of the
Commission thereunder), in either case so as to subject (i) the offering,
issuance or sale of the Converted NDA Shares; or (ii) the delivery and exchange
with International of the Outstanding NDA Shares or Converted NDA Shares to the
registration provisions of the Securities Act.
3.21. Brokers. NDA has no contract, arrangement or
understanding with any broker, finder or similar agent with respect
to the transactions contemplated by this Agreement.
3.22. Officers. Set forth in Schedule 3.22 is a list of the names of
the officers of NDA, together with the title or job classification of each such
person and the total compensation anticipated to be paid to each such person by
NDA in 1996. None of such persons has an employment agreement or understanding,
whether oral or written, with NDA, which is not terminable on notice by NDA
without cost or other liability to NDA.
3.23. Transactions With Affiliates. Except as set forth
in Schedule 3.23, no director, officer, employee or stockholder of
NDA, or member of the family of any such person, or any
23
corporation, partnership, trust or other entity in which any such person, or any
member of the family of any such person, has a substantial interest or is an
officer, director, trustee, partner or holder of more than 5% of the outstanding
capital stock thereof, is a party to any transaction with NDA, including any
contract, agreement or other arrangement providing for the employment of,
furnishing of services by, rental of real or personal property from or otherwise
requiring payments to any such person or firm.
3.24. Employees. Each of the officers of NDA, each key employee and
each other employee now employed by NDA who has access to confidential
information of NDA has executed an Employee Non- Disclosure, Non-Competition and
Development Agreement substantially in the form of Schedule 3.24, and such
agreements are in full force and effect. No officer or key employee of NDA has
advised NDA (orally or in writing) that he intends to terminate employment with
NDA. NDA has complied in all material respects with all applicable laws relating
to the employment of labor, including provisions relating to wages, hours, equal
opportunity, collective bargaining and the payment of Social Security and other
taxes, and with the Employee Retirement Income Security Act of 1974, as amended.
3.25. Updating. NDA agrees and undertakes to update the
representations and schedules herein for any changes between the
execution hereof and the Closing.
SECTION 4. REPRESENTATIONS AND WARRANTIES CONCERNING GUCT
As of the execution of this Agreement and at the Closing Date, GUCT
represents and warrants to NDA and the NDA Stockholders that, except as set
forth in any Schedule attached hereto:
4.1. Organization, Qualifications and Corporate Power.
(a) GUCT is a corporation duly incorporated, validly
existing and in good standing under the laws of the British Virgin Islands and
is duly licensed or qualified to transact business as a foreign corporation and
is in good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification. GUCT has the corporate power and
authority to own and hold its properties and to carry on its business as now
conducted and as proposed to be conducted, and to execute, deliver and perform
this Agreement and the Other Agreements.
(b) Except for the ownership of 100% of the
outstanding capital stock of UCT and Pharmasoft, and except for its ownership of
8,932 shares of NDA Class A Stock and its previously specified portion of the
Converted NDA Shares and except for the New International Shares to be issued to
GUCT at the Closing, GUCT does not (i) own of record or beneficially, directly
or indirectly,
24
(A) any shares of capital stock or securities convertible into capital stock of
any other corporation or (B) any participating interest in any partnership,
joint venture or other non-corporate business enterprise or (ii) control,
directly or indirectly, any other entity.
4.2. Authorization of Agreements, etc.
(a) The execution and delivery by GUCT of this
Agreement and the Other Agreements, the performance by GUCT of its obligations
hereunder and thereunder, the exchange and delivery by GUCT of its Converted and
Outstanding NDA shares and the UCT Shares and Pharmasoft Shares to
International, have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other agency of
government, the Memorandum and Articles of Association of GUCT (the "GUCT
Charter Documents"), which are attached as Schedule 4.2, or any provision of any
indenture, agreement or other instrument to which GUCT, or its properties or
assets is bound, or conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument, or result in the creation or imposition of any lien,
charge, restriction, claim or encumbrance of any nature whatsoever upon any of
the properties or assets of GUCT or any of its subsidiaries.
(b) GUCT has secured any required waivers and
consents from its shareholders in connection with the execution and delivery by
GUCT of this Agreement and the Other Agreements and the performance by GUCT of
its obligations hereunder and thereunder, including but not limited to, the
delivery of all its Outstanding NDA Shares, Converted NDA Shares, UCT Shares and
Pharmasoft Shares to International under this Agreement free of any preemptive
rights and right of first refusal of any person.
(c) The UCT Shares, Pharmasoft Shares, Converted
and Outstanding NDA Shares being delivered by GUCT to International have been
duly authorized, and when delivered to International in accordance with this
Agreement, will be validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof and, will be owned by
International, free and clear of all liens, charges, restrictions, claims and
encumbrances except as set forth in the International Stockholders Agreement and
the International Registration Rights Agreement. The delivery and exchange of
such shares to International is not subject to any preemptive right of any
person or to any right of first refusal or other right in favor of any person
that has not, on or prior to the Closing Date, been waived to the extent
necessary to permit the transactions contemplated by this Agreement to occur.
4.3. Validity. Each of the Agreement and the Other
Agreements have been duly executed and delivered by GUCT and
25
constitutes the legal, valid and binding obligation of GUCT, enforceable in
accordance with its terms.
4.4. Authorized Capital. The authorized capital of GUCT consists of
20,000,000 shares of U.S. $1.00 par value, of which 217,000 are issued and
outstanding and are owned of record and beneficially by UniHolding or its
affiliates, including its officers and directors. Schedule 4.4 sets forth a
complete and accurate description of (i) any holders of subscriptions, warrants,
options, convertible securities and other rights (contingent or other) to
purchase or otherwise acquire equity securities of GUCT and the number of shares
of GUCT and the number of such subscriptions, warrants, options, convertible
securities, and other such rights held by each; (ii) any obligation (contingent
or otherwise) to purchase, redeem or otherwise acquire any of its equity
securities or any interest therein or to pay any dividend or make any other
distribution in respect thereof; (iii) any voting trusts or agreements,
shareholders' agreements, pledge agreements, buy-sell agreements, rights of
first refusal, preemptive rights or proxies relating to any securities of GUCT
(whether or not GUCT is a party thereto). All of the outstanding securities of
GUCT were issued in compliance with all applicable corporate and securities laws
of the British Virgin Islands.
4.5. Financial Statements. GUCT has furnished to NDA and the NDA
Stockholders the unaudited balance sheet of GUCT as of September 30, 1996 and
the related statements of income, shareholders equity and cash flows of GUCT for
the four months then ended. Copies of such financial statements are attached as
Schedule 4.5 hereto. All such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial position of GUCT at the dates and
for the periods to which they relate. Since the date of the September 30, 1996
balance sheet, (i) there has been no change in the assets, liabilities or
financial condition of GUCT from that reflected in such balance sheet except for
changes in the ordinary course of business which in the aggregate have not been
materially adverse and (ii) none of the business, prospects, financial
condition, operations, property or affairs of GUCT has been materially adversely
affected by any occurrence or development, individually or in the aggregate,
whether or not insured against.
4.6. INTENTIONALLY OMITTED
4.7. Litigation; Compliance with Law. GUCT is not aware of any (i)
action, suit, claim, proceeding or investigation pending or threatened against
or affecting GUCT, at law or in equity, or before or by any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) arbitration proceeding relating to
GUCT or (iii) governmental inquiry pending or, to the best of GUCT's
26
knowledge, threatened against or affecting GUCT. GUCT has not received any
opinion or memorandum or legal advice from legal counsel to the effect that it
is exposed, from a legal standpoint, to any liability or disadvantage which may
be material to its business, prospects, financial condition, operations,
property or affairs. GUCT is not in default with respect to any order, writ,
injunction or decree known to or served upon GUCT of any court or of any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign. There is no action or
suit by GUCT pending or threatened against others. GUCT has complied with all
laws, rules, regulations and orders applicable to its business, operations,
properties, assets, products and services, and GUCT has all necessary permits,
licenses and other authorizations required to conduct its business as conducted
and as proposed to be conducted, other than any non-compliance, permit, license
or other authorization which in the aggregate are not material to its business,
prospects or financial condition. There is no existing law, rule, regulation or
order, and GUCT after due inquiry is not aware of any proposed law, rule,
regulation or order, whether of any country or political subdivision thereof,
including the United States or any state, which would prohibit or restrict GUCT
from, or otherwise materially adversely affect GUCT in, conducting its business
in any jurisdiction in which it is now conducting business or in which it
proposes to conduct business.
4.8. INTENTIONALLY OMITTED
4.9. INTENTIONALLY OMITTED
4.10. INTENTIONALLY OMITTED
4.11. INTENTIONALLY OMITTED
4.12. INTENTIONALLY OMITTED
4.13. Other Agreements. Except as set forth in the attached Schedule
4.13(A), GUCT is not a party to or otherwise bound by any written or oral
contract or instrument or other restriction which individually or in the
aggregate could materially adversely affect the business, prospects, financial
condition, operations, property or affairs of GUCT. Except as set forth in the
attached Schedule 4.13(B), GUCT is not a party to or otherwise bound by any
written or oral:
(a) voting trust or agreement, shareholders agreement, pledge
agreement, buy-sell agreement or first refusal or preemptive rights agreement
relating to any securities of GUCT;
(b) agreement, or group of related agreements with the same
party or any group of affiliated parties, under which GUCT has
27
advanced or agreed to advance money or has agreed to lease any
property as lessee or lessor;
(c) agreement or obligation (contingent or otherwise) to
issue, sell or otherwise distribute or to repurchase or otherwise
acquire or retire any of its shares or any of its other equity
securities; and
(d) agreement under which it has limited or restricted its right to
compete with any person in any respect, other than as provided in Section
2.2(E)(4)(ix).
GUCT, and to the best of GUCT's knowledge, UCT, have in all material respects
performed all obligations required to be performed by them to date, have
received no notice of default and are not in default (with due notice or lapse
of time or both) under any lease, agreement or contract now in effect to which
GUCT is a party or by which it or its property may be bound. GUCT has no present
expectation or intention of not fully performing all its obligations under each
such lease, contract or other agreement, and GUCT has no knowledge of any breach
or anticipated breach of the other party to any contract or commitment to which
GUCT is a party. GUCT is in full compliance with all of the terms and provisions
of the GUCT Charter Documents.
4.14. Governmental Approvals. No registration or filing with, or
consent or approval of or other action by, any Federal, state or other
governmental agency or instrumentality is or will be necessary for the valid
execution, delivery and performance by GUCT of this Agreement and the Other
Agreements, and the delivery and exchange by GUCT of its Converted NDA Shares,
Outstanding NDA Shares, UCT Shares and Pharmasoft Shares to and with
International.
4.15. Disclosure. Neither this Agreement, nor any Schedule or Annex to
this Agreement or the Other Agreements, contains an untrue statement concerning
GUCT, UCT or Pharmasoft of a material fact or omits a material fact necessary
concerning these companies to make the statements contained herein or therein
not misleading. None of the statements, documents, certificates or other items
prepared or supplied by GUCT with respect to the transactions contemplated
hereby contains an untrue statement of a material fact or omits a material fact
necessary to make the statements contained therein not misleading. There is no
fact which GUCT has not disclosed to NDA and its counsel in writing and of which
GUCT is aware which materially and adversely affects or could materially and
adversely affect the business, prospects, financial condition, operations,
property or affairs of GUCT.
4.16. Offering of GUCT Shares. Neither GUCT nor any
person acting on its behalf has taken or will take any other action
(including, without limitation, any offer, issuance or sale of any
security of GUCT under circumstances which might require the
28
integration of such security with other of GUCT's securities under the
Securities Act or the rules and regulations of the Commission thereunder), in
either case so as to subject any of the delivery or the exchange of the
Converted NDA Shares, the Outstanding NDA Shares, the UCT Shares and the
Pharmasoft Shares, to International, to the registration provisions of the
Securities Act.
4.17. Brokers. GUCT has no contract, arrangement or
understanding with any broker, finder or similar agent with respect
to the transactions contemplated by this Agreement.
4.18. Updating. GUCT agrees and undertakes to update the
representations and schedules herein for any changes between the
execution hereof and the Closing.
SECTION 5. REPRESENTATIONS AND WARRANTIES CONCERNING UCT
As of the execution of this Agreement and at the Closing Date, GUCT
represents and warrants to NDA and the NDA Stockholders (it being understood
that UCT is not a party hereto and makes no representations or warranties in its
own right), that, except as set forth in any Schedule attached hereto:
5.1. Organization, Qualifications and Corporate Power.
(a) UCT is a corporation duly incorporated, validly
existing and in good standing under the laws of England and Wales and is duly
licensed or qualified to transact business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification. UCT has the corporate power and
authority to own and hold its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) UCT does not (i) own of record or beneficially,
directly or indirectly, (A) any shares of capital stock or securities
convertible into capital stock of any other corporation or (B) any participating
interest in any partnership, joint venture or other non-corporate business
enterprise or (ii) control, directly or indirectly, any other entity.
5.2. Authorization of Delivery of Shares, etc.
(a) The delivery and exchange of the UCT Shares to
International have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other agency of
government, the Memorandum or Articles of Association of UCT (the "UCT Charter
Documents"), which are attached as Schedule 5.2, or any provision of any
agreement or
29
other instrument to which UCT, or its properties or assets is bound, or conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any such agreement or other instrument, or result in the
creation or imposition of any lien, charge, restriction, claim or encumbrance of
any nature whatsoever upon any of the properties or assets of UCT or any of its
subsidiaries.
(b) UCT has secured any required waivers and
consents from its stockholders in connection with the delivery of the UCT Shares
to be exchanged for shares of International under this Agreement, free of any
preemptive rights or rights of first refusal of any stockholders of UCT and any
other person.
(c) The UCT Shares have been duly authorized, and
when delivered to International in accordance with this Agreement, will be
validly issued and fully paid with no personal liability attaching to the
ownership thereof, and will be, owned by International, free and clear of all
liens, charges, restrictions, claims and encumbrances, subject to the provisions
of the Articles of Association and English Law. The exchange and delivery of the
UCT Shares to International is not subject to any preemptive right or to any
right of first refusal of stockholders of UCT or other right in favor of any
person that has not been waived to the extent necessary to permit the
transactions contemplated by this Agreement to occur.
5.3. Authorized Share Capital. The authorized share capital of UCT
consists of 2,445,128 shares of (pound)1.00 par value, all of which are issued
and outstanding (prior to the conversion of loans from GUCT to UCT referred to
in Section 1.4 hereof) and are owned beneficially and of record by GUCT. The
registered shareholders and holders of subscriptions, warrants, options,
convertible securities and other rights (contingent or other) to purchase or
otherwise acquire equity securities of UCT and the number of such subscriptions,
warrants, options, convertible securities, and other such rights held by each,
are as set forth in the attached Schedule 5.3. Except as set forth in the
attached Schedule 5.3, (i) no person is registered or is known to GUCT to own
beneficially any Ordinary Shares or any other securities of UCT, (ii) no
subscription, warrant, option, convertible security or other right (contingent
or other) to purchase or otherwise acquire equity securities of UCT is
authorized or outstanding and (iii) there is no commitment by UCT to issue
shares, subscriptions, warrants, options, convertible securities or other such
rights or to distribute to holders of any of its equity securities any evidence
of indebtedness or asset. Except as provided for in the UCT Charter Documents or
as set forth in the attached Schedule 5.3, UCT has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interest therein or to pay any dividend or make any other distribution in
respect thereof. Other than as set forth on Schedule 5.13 hereof,
30
there are, to the best of GUCT's knowledge, no voting trusts or agreements,
stockholders' agreements, pledge agreements, buy-sell agreements, rights of
first refusal, preemptive rights or proxies relating to any securities of UCT
(whether or not UCT is a party thereto). All of the outstanding securities of
UCT were issued in compliance with all applicable English laws and any other
applicable securities laws.
5.4. Financial Statements. GUCT has furnished to NDA and the NDA
Stockholders the audited balance sheet of UCT as of May 31, 1996 and the related
statements of income, shareholder funds and cash flows of UCT for the year ended
May 31, 1996. GUCT has also furnished to NDA and the NDA Stockholders (i) its
interim unaudited profit and loss account, cash flow statement and balance sheet
for the six months ended November 30, 1996 and (ii) the pro-forma adjustments to
such financial statements giving effect to transactions between UCT and
affiliates of UCT which GUCT further represents and warrants shall be effected
on or prior to the Closing Date (the "Pro-Forma Adjustments"). Copies of all
such financial statements are attached as Schedule 5.4 hereto. All such
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present the consolidated
financial position of UCT at the dates and for the periods to which they relate.
Since the date of November 30, 1996 balance sheet, (i) there has been no change
in the assets, liabilities or financial condition of UCT from that reflected in
such balance sheet except for the Pro-Forma Adjustments and for changes in the
ordinary course of business which in the aggregate have not been materially
adverse and (ii) none of the business, prospects, financial condition,
operations, property or affairs of UCT have been materially adversely affected
by any occurrence or development, individually or in the aggregate, whether or
not insured against.
5.5. Events Subsequent to the Date of the Balance Sheet. Since the date
of November 30, 1996 balance sheet, UCT has not except as set forth in the
attached Schedule 5.5 or in the Pro- Forma Adjustments or pursuant to this
Agreement, (i) issued any share, loan stock or other corporate security, (ii)
borrowed any amount or incurred or become subject to any liability (absolute,
accrued or contingent), except current liabilities incurred and liabilities
under contracts entered into in the ordinary course of business, (iii)
discharged or satisfied any lien or encumbrance or incurred or paid any
obligation or liability (absolute, accrued or contingent) other than current
liabilities shown on the November 30, 1996 balance sheet and current liabilities
incurred since the date of such balance sheet in the ordinary course of
business, (iv) declared or made any payment or distribution to stockholders or
purchased or redeemed any share or loan capital or other security, (v)
mortgaged, pledged or subjected to lien any of its assets, tangible or
intangible, (vi) sold, assigned or transferred any of its tangible assets except
in the ordinary course of business, or
31
cancelled any debt or claim, (vii) sold, assigned, transferred or granted any
exclusive license with respect to any patent, trademark, trade name, service
▇▇▇▇, copyright, trade secret or other intangible asset, (viii) suffered any
loss of property or waived any right of substantial value whether or not in the
ordinary course of business, (ix) made any change in officer compensation except
in the ordinary course of business and consistent with past practice, (x) made
any material change in the manner of business or operations of UCT, (xi) entered
into any transaction except in the ordinary course of business or as otherwise
contemplated hereby or (xii) entered into any commitment (contingent or
otherwise) to do any of the foregoing.
5.6. Litigation; Compliance with Law. Except as set forth on Schedule
5.6 hereto, neither GUCT nor UCT is aware of any (i) action, suit, claim,
proceeding or investigation pending or threatened against or affecting UCT, at
law or in equity, or before or by any country, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (ii) arbitration proceeding relating to UCT pending under
collective bargaining agreements or otherwise or (iii) governmental inquiry
pending or, to the best of UCT's knowledge, threatened against or affecting UCT
(including, without limitation, any inquiry as to the qualification of UCT to
hold or receive any license or permit). UCT has not received any opinion or
memorandum or legal advice from legal counsel to the effect that it is exposed,
from a legal standpoint, to any liability or disadvantage which may be material
to its business, prospects, financial condition, operations, property or
affairs. UCT is not in default with respect to any order, writ, injunction or
decree known to or served upon UCT of any court or of any country, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign. There is no action or suit by UCT pending
or threatened against others. UCT has complied with all laws, rules, regulations
and orders applicable to its business, operations, properties, assets, products
and services, and UCT has all necessary permits, licenses and other
authorizations required to conduct its business as conducted and as proposed to
be conducted. There is no existing law, rule, regulation or order, and UCT after
due inquiry is not aware of any proposed law, rule, regulation or order, whether
of any country or political subdivision thereof, including the United States or
any state, which would prohibit or restrict UCT from, or otherwise materially
adversely affect UCT in, conducting its business in any jurisdiction in which it
is now conducting business or in which it proposes to conduct business.
5.7. Proprietary Information of Third Parties. To the
best of GUCT's and UCT's knowledge, no third party has claimed or
has reason to claim that any person employed by or affiliated with
UCT has (a) violated or may be violating any of the terms or
conditions of his employment, non-competition or non-disclosure
32
agreement with such third party, (b) disclosed or may be disclosing or utilized
or may be utilizing any trade secret or proprietary information or documentation
of such third party or (c) interfered or may be interfering in the employment
relationship between such third party and any of its present or former
employees. No third party has requested information from UCT which suggests that
such a claim might be contemplated. To the best of GUCT's and UCT's knowledge,
no person employed by or affiliated with UCT has employed or proposes to employ
any trade secret or any information or documentation proprietary to any former
employer, and to the best of UCT's knowledge, no person employed by or
affiliated with UCT has violated any confidential relationship which such person
may have had with any third party, in connection with the development,
manufacture or sale of any product or proposed product or the development or
sale of any service or proposed service of UCT, and UCT has no reason to believe
there will be any such employment or violation. To the best of GUCT's and UCT's
knowledge, neither the carrying on of the business of UCT as officers, employees
or agents by any officer, director or key employee of UCT, nor the conduct or
proposed conduct of the business of UCT, will conflict with or result in a
breach of the terms, conditions or provisions of or constitute a default under
any contract, covenant or instrument under which any such person is obligated.
5.8. Title to Properties. UCT has good and marketable title to its
properties and assets reflected on its September 30, 1996 balance sheet or
acquired by it since the date of said balance sheet (other than properties and
assets disposed of in the ordinary course of business since the date of said
balance sheet), and all such properties and assets are free and clear of
mortgages, pledges, security interests, liens, charges, claims, restrictions and
other encumbrances, except for liens for or current taxes not yet due and
payable.
5.9. Leasehold Interests. Except as set forth in Schedule 5.12, (i)
each lease or agreement to which UCT is a party under which it is a lessee of
any property, real or personal, is a valid and subsisting agreement without any
default of UCT thereunder and, to the best of GUCT's and UCT's knowledge,
without any default thereunder of any other party thereto; (ii) no event has
occurred and is continuing which, with due notice or lapse of time or both,
would constitute a default or event of default by UCT under any such lease or
agreement or, to the best of GUCT's and UCT's knowledge, by any other party
thereto; and (iii) UCT's possession of such property has not been disturbed and,
to the best of GUCT's and UCT's knowledge, no claim has been asserted against
UCT adverse to its rights in such leasehold interests.
5.10. Insurance. UCT holds valid policies covering all of
the insurance required to be maintained by it under Section 12.4 of
the International Stockholders' Agreement.
33
5.11. Taxes. Except as set forth on Schedule 5.11, UCT has filed all
tax returns required to be filed by it, and UCT has paid all taxes shown to be
due by such returns by the due date[s] as well as all other taxes, assessments
and governmental charges which have become due or payable, including, without
limitation, all taxes which UCT is obligated to withhold from amounts owing to
employees, creditors and third parties. All such taxes with respect to which UCT
has become obligated pursuant to elections made by UCT in accordance with
generally accepted practice have been paid and adequate reserves have been
established for all taxes accrued but not yet payable. The income tax returns of
UCT have never been audited by Inland Revenue. No deficiency assessment with
respect to or proposed adjustment of UCT's taxes is pending or, to the best of
UCT's knowledge, threatened. There is no tax lien outstanding against the
assets, properties or business of UCT. UCT's net trading losses for corporation
tax purposes, as set forth in the financial statements referred to in Section
5.5, are not subject to any limitations and the full amount of such net trading
losses are available to offset the trading profits of UCT (so long as they are
derived from the same trade as the net trading losses) for the current fiscal
year and, to the extent not so used, succeeding fiscal years. Consummation of
the transactions contemplated by this Agreement or by any other agreement,
understanding or commitment (contingent or otherwise) to which UCT is a party or
by which it is otherwise bound will not have the effect of limiting UCT's
ability to use such net operating losses in full to offset such taxable income.
UCT is not a party to any tax allocation or sharing agreement. UCT does not have
any liability or obligation, existing or contingent, as guarantor, transferee,
successor or otherwise, by contract or otherwise, for the federal, state, local
or foreign taxes, assessments and governmental charges payable by any other
entity or person in any jurisdiction, including without limitation any member of
a "consolidated group" of which UCT may be deemed to have been a part.
5.12. Other Agreements. Except as set forth in the attached Schedule
5.12(A), UCT is not a party to or otherwise bound by any written or oral
contract or instrument or other restriction which individually or in the
aggregate could materially adversely affect the business, prospects, financial
condition, operations, property or affairs of UCT. Except as set forth in the
attached Schedule 5.12(B), UCT is not a party to or otherwise bound by any
written or oral:
(a) distributor, dealer, manufacturer's representative or sales agency
contract or similar agreement which is not terminable on less than ninety (90)
days' notice without cost or other liability to UCT;
(b) sales contract which entitles any customer to a rebate or
right of set-off, to return any product to UCT after acceptance
34
thereof or to delay the acceptance thereof, or which varies in any
material respect from UCT's standard form contracts;
(c) contract with any trade union (and, to the knowledge of
UCT, no organizational effort is being made with respect to any of
its employees);
(d) contract or other commitment with any supplier containing any
provision permitting any party other than UCT to renegotiate the price or other
terms, or containing any pay-back or other similar provision, upon the
occurrence of a failure by UCT to meet its obligations under the contract when
due or the occurrence of any other event;
(e) contract for the future purchase of fixed assets or for
the future purchase of materials, supplies or equipment in excess
of its normal operating requirements;
(f) contract for the employment of any officer, employee or other
person (whether of a legally binding nature or in the nature of informal
understandings) on a full-time or consulting basis which is not terminable on
notice without cost or other liability to UCT, except normal severance
arrangements and accrued vacation pay;
(g) bonus, pension, profit-sharing, retirement, private medical
insurance, stock purchase, stock option or other plan, contract or understanding
pursuant to which benefits are provided to any employee of UCT (other than group
insurance plans applicable to employees generally);
(h) agreement relating to the borrowing of money or to the
mortgaging or pledging of, or otherwise placing a lien or security
interest on, any asset of UCT;
(i) guaranty of any obligation for borrowed money or
otherwise;
(j) voting trust or agreement, stockholders agreement, pledge
agreement, buy-sell agreement or first refusal or preemptive rights agreement
relating to any securities of UCT;
(k) agreement, or group of related agreements with the same party or
any group of affiliated parties, under which UCT has advanced or agreed to
advance money or has agreed to lease any property as lessee or lessor;
(l) agreement or obligation (contingent or otherwise) to issue, sell or
otherwise distribute or to repurchase or otherwise acquire or retire any share
of its capital stock or any of its other equity securities;
35
(m) assignment, license or other agreement with respect to
any form of intangible property;
(n) agreement under which it has granted any person any
registration rights;
(o) agreement under which it has limited or restricted its
right to compete with any person in any respect;
(p) other contract or group of related contracts with the same party
involving more than $10,000 or continuing over a period of more than six months
from the date or dates thereof (including renewals or extensions optional with
another party), which contract or group of contracts is not terminable by UCT
without penalty upon notice of thirty (30) days or less, but excluding any
contract or group of contracts with a customer of UCT for the sale, lease or
rental of UCT's products or services if such contract or group of contracts was
entered into by UCT in the ordinary course of business; or
(q) other contract, instrument, commitment, plan or arrangement, a copy
of which would be required to be filed with the Commission as an exhibit to a
registration statement on Form S-1 if UCT were registering securities under the
Securities Act of 1933, as amended (the "Securities Act").
UCT has in all material respects performed all obligations required to be
performed by it to date, has received no notice of default and is not in default
(with due notice or lapse of time or both) under any lease, agreement or
contract now in effect to which UCT is a party or by which it or its property
may be bound. UCT has no present expectation or intention of not fully
performing all its obligations under each such lease, contract or other
agreement, and UCT has no knowledge of any breach or anticipated breach of the
other party to any contract or commitment to which UCT is a party. UCT is in
full compliance with all of the terms and provisions of the UCT Charter
Documents.
5.13. Patents, Trademarks, etc. Set forth in Schedule 5.13 is a list
and brief description of all patents, patent rights, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇ applications,
trade names and copyrights, and all applications for such which are in the
process of being prepared, owned by or registered in the name of UCT, or of
which UCT is a licensor or licensee or in which UCT has any right, and in each
case a brief description of the nature of such right. UCT owns or possesses
adequate licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇ applications,
trade names, copyrights, manufacturing processes, formulae, trade secrets and
know-how (collectively, "Intellectual Property") necessary or desirable to the
conduct of its business as conducted and as proposed to be
36
conducted, and no claim is pending or, to the best of GUCT's knowledge,
threatened to the effect that the operations of UCT infringe upon or conflict
with the asserted rights of any other person under any Intellectual Property,
and there is no basis for any such claim (whether or not pending or threatened).
To the best of GUCT's or UCT's knowledge, no claim is pending or threatened to
the effect that any such Intellectual Property owned or licensed by UCT, or
which UCT otherwise has the right to use, is invalid or unenforceable by UCT,
and there is no basis for any such claim (whether or not pending or threatened).
To the best of GUCT's or UCT's knowledge, all technical information developed by
and belonging to UCT which has not been patented has been kept confidential. UCT
has not granted or assigned to any other person or entity any right to
manufacture, have manufactured, assemble or sell the products or proposed
products or to provide the services or proposed services of UCT.
5.14. Loans and Advances. Other than as set forth on Schedule 5.14, UCT
does not have any outstanding loans or advances to any person and is not
obligated to make any such loans or advances, except, in each case, for advances
to employees of UCT in respect of reimbursable business expenses anticipated to
be incurred by them in connection with their performance of services for UCT.
5.15. Assumptions, Guaranties, etc. of Indebtedness of
Other Persons. UCT has not assumed, guaranteed, endorsed or
otherwise become directly or contingently liable on any
indebtedness of any other person (including, without limitation,
liability by way of agreement, contingent or otherwise, to
purchase, to provide funds for payment, to supply funds to or
otherwise invest in a debtor, or otherwise to assure a creditor
against loss), except for guaranties by endorsement of negotiable
instruments for deposit or collection in the ordinary course of
business.
5.16. Significant Customers and Suppliers. No customer or supplier
which was significant to UCT during the period covered by the financial
statements referred to in Section 5.4 or which has been significant to UCT
thereafter, has terminated, materially reduced or threatened to terminate or
materially reduce its purchases from or provision of products or services to
UCT, as the case may be.
5.17. Governmental Approvals. No registration or filing
with, or consent or approval of or other action by, any
governmental agency or instrumentality is or will be necessary for
the valid exchange and delivery to International of the UCT Shares.
5.18. Disclosure. Neither this Agreement, the Other
Agreements nor any Schedule or Annex to this Agreement or the Other
Agreements, contains an untrue statement of a material fact or
37
omits a material fact necessary to make the statements contained herein or
therein not misleading. None of the statements, documents, certificates or other
items prepared or supplied by UCT or GUCT with respect to the transactions
contemplated hereby contains an untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein not misleading.
There is no fact which UCT or GUCT has not disclosed to NDA and its counsel in
writing and of which UCT or GUCT is aware which materially and adversely affects
or could materially and adversely affect the business, prospects, financial
condition, operations, property or affairs of UCT.
5.19. Offering of the Shares. Neither UCT nor any person acting on its
behalf has taken or will take any other action (including, without limitation,
any offer, issuance or sale of any security of UCT under circumstances which
might require the integration of such security with the UCT Shares or any other
securities of UCT, under the Securities Act, or the rules and regulations of the
Commission thereunder), in either case so as to subject any of the delivery and
exchange of the UCT Shares to International, to the registration provisions of
the Securities Act.
5.20. Brokers. UCT has no contract, arrangement or
understanding with any broker, finder or similar agent with respect
to the transactions contemplated by this Agreement.
5.21. Officers. Set forth in Schedule 5.21 is a list of the names of
the officers of UCT, together with the title or job classification of each such
person and the total compensation anticipated to be paid to each such person by
UCT in 1996. None of such persons has an employment agreement or understanding,
whether oral or written, with UCT, which is not terminable on notice by UCT
without cost or other liability to UCT.
5.22. Transactions With Affiliates. Except as set forth in Schedule
5.12, no director, officer, employee or stockholder of UCT, or member of the
family of any such person, or any corporation, partnership, trust or other
entity in which any such person, or any member of the family of any such person,
has a substantial interest or is an officer, director, trustee, partner or
holder of more than 5% of the outstanding capital stock thereof, is a party to
any transaction with UCT, including any contract, agreement or other arrangement
providing for the employment of, furnishing of services by, rental of real or
personal property from or otherwise requiring payments to any such person or
firm.
5.23. Employees. Each of the officers of UCT, each key
employee and each other employee now employed by UCT who has access
to confidential information of UCT has executed a Confidentiality
Agreement substantially in the form of Annex 5.23 hereto, and such
agreements are in full force and effect. No officer or key
38
employee of UCT has advised UCT(orally or in writing) that he intends to
terminate employment with UCT. UCT has complied in all material respects with
all applicable laws relating to the employment of labor, including provisions
relating to wages, hours, equal opportunity, collective bargaining and the
payment of Social Security and other taxes.
5.24. Updating. GUCT agrees and undertakes to update the
representations and schedules herein for any changes between the
execution hereof and the Closing.
SECTION 6. REPRESENTATIONS AND WARRANTIES CONCERNING PHARMASOFT
As of the execution of this Agreement and at the Closing Date, GUCT
represents and warrants to NDA and the NDA Stockholders that, except as set
forth in any Schedule attached hereto:
6.1. Organization, Qualifications and Corporate Power.
(a) Pharmasoft is a corporation duly incorporated,
validly existing and in good standing under the laws of Switzerland and is duly
licensed or qualified to transact business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification. Pharmasoft has the corporate power and
authority to own and hold its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) Pharmasoft does not (i) own of record or
beneficially, directly or indirectly, (A) any shares of capital stock or
securities convertible into capital stock of any other corporation or (B) any
participating interest in any partnership, joint venture or other non-corporate
business enterprise or (ii) control, directly or indirectly, any other entity.
6.2. Authorization of Agreements, etc.
(a) The exchange and delivery to International of the
Pharmasoft Shares have been duly authorized by all requisite corporate action
and will not violate any provision of law, any order of any court or other
agency of government, or the By-laws of Pharmasoft (the "Pharmasoft Charter
Documents"), which are attached as Schedule 6.2, or any provision of any
indenture, agreement or other instrument to which Pharmasoft, or its properties
or assets is bound, or conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any such indenture,
agreement or other instrument, or result in the creation or imposition of any
lien, charge, restriction, claim or encumbrance of any nature whatsoever upon
any of the properties or assets of Pharmasoft or any of its subsidiaries.
39
(b) Pharmasoft has secured any required waivers and
consents from its stockholders in connection with the exchange and delivery of
the Pharmasoft Shares to International, free of any preemptive rights or rights
of first refusal of any stockholders of Pharmasoft or any other person.
(c) The Pharmasoft Shares have been duly authorized
and, when delivered to International in accordance with this Agreement, will be
validly issued, fully paid and nonassessable with no personal liability
attaching to the ownership thereof and will be owned by International, free and
clear of all liens, charges, restrictions, claims and encumbrances except as set
forth in the International Stockholders Agreement and the International
Registration Rights Agreement. The delivery and exchange of the Pharmasoft
Shares to International is not subject to any preemptive right of stockholders
of Pharmasoft or to any right of first refusal or other right in favor of any
person that has not been waived to the extent necessary to permit the
transactions contemplated by this Agreement to occur.
6.3. INTENTIONALLY OMITTED
6.4. Authorized Capital Stock. The authorized capital stock of
Pharmasoft consists of 445 shares, CHF 1,000 par value, all of which are issued
and outstanding. The stockholders of record and holders of subscriptions,
warrants, options, convertible securities and other rights (contingent or other)
to purchase or otherwise acquire equity securities of Pharmasoft and the number
of shares of Pharmasoft's equity securities and the number of such
subscriptions, warrants, options, convertible securities, and other such rights
held by each, are as set forth in the attached Schedule 6.4. Except as set forth
in the attached Schedule 6.4, (i) no person owns of record or is known to
Pharmasoft to own beneficially any shares of capital stock of Pharmasoft (ii) no
subscription, warrant, option, convertible security or other right (contingent
or other) to purchase or otherwise acquire equity securities of Pharmasoft is
authorized or outstanding and (iii) there is no commitment by Pharmasoft to
issue shares, subscriptions, warrants, options, convertible securities or other
such rights or to distribute to holders of any of its equity securities any
evidence of indebtedness or asset. Except as provided for in the Pharmasoft
Charter Documents or as set forth in the attached Schedule 6.4, Pharmasoft has
no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interest therein or to pay any dividend or
make any other distribution in respect thereof. Other than as set forth in the
International Stockholders' Agreement, there are, to the best of GUCT's and
Pharmasoft's knowledge, no voting trusts or agreements, stockholders'
agreements, pledge agreements, buy-sell agreements, rights of first refusal,
preemptive rights or proxies relating to any securities of Pharmasoft (whether
or not Pharmasoft is a party
40
thereto). All of the outstanding securities of Pharmasoft were
issued in compliance with all applicable Swiss laws.
6.5. Financial Statements. Pharmasoft has furnished to NDA and the NDA
Stockholders its unaudited balance sheet as of May 31, 1996 and the related
statements of income, stockholders equity and cash flows of Pharmasoft for the
year then ended. Pharmasoft has also furnished to NDA and the NDA Stockholders
its interim unaudited income statement and balance sheet for the four months
ended September 30, 1996. Copies of all such financial statements are attached
on Schedule 6.5 hereto. All such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial position of Pharmasoft at the
dates and for the periods to which they relate. Since the date of September 30,
1996 balance sheet, (i) there has been no change in the assets, liabilities or
financial condition of Pharmasoft from that reflected in such balance sheet
except for changes in the ordinary course of business which in the aggregate
have not been materially adverse and (ii) none of the business, prospects,
financial condition, operations, property or affairs of Pharmasoft have been
materially adversely affected by any occurrence or development, individually or
in the aggregate, whether or not insured against.
6.6. Events Subsequent to the Date of the Balance Sheet. Since the date
of its September 30, 1996 balance sheet, Pharmasoft has not (i) except as set
forth in the attached Schedule 6.13, issued any stock, bond or other corporate
security, (ii) borrowed any amount or incurred or become subject to any
liability (absolute, accrued or contingent), except current liabilities incurred
and liabilities under contracts entered into in the ordinary course of business,
(iii) discharged or satisfied any lien or encumbrance or incurred or paid any
obligation or liability (absolute, accrued or contingent) other than current
liabilities shown on the September 30, 1996 balance sheet and current
liabilities incurred since the date of such balance sheet in the ordinary course
of business, (iv) declared or made any payment or distribution to stockholders
or purchased or redeemed any share of its capital stock or other security, (v)
mortgaged, pledged or subjected to lien any of its assets, tangible or
intangible, other than liens of current real property taxes not yet due and
payable, (vi) sold, assigned or transferred any of its tangible assets except in
the ordinary course of business, or cancelled any debt or claim, (vii) sold,
assigned, transferred or granted any exclusive license with respect to any
patent, trademark, trade name, service ▇▇▇▇, copyright, trade secret or other
intangible asset, (viii) suffered any loss of property or waived any right of
substantial value whether or not in the ordinary course of business, (ix) made
any change in officer compensation except in the ordinary course of business and
consistent with past practice, (x) made any material change in the manner of
business or operations of Pharmasoft, (xi) entered into any transaction except
in the ordinary course of
41
business or as otherwise contemplated hereby or (xii) entered into any
commitment (contingent or otherwise) to do any of the foregoing.
6.7. Litigation; Compliance with Law. Neither GUCT nor Pharmasoft is
aware of any (i) action, suit, claim, proceeding or investigation pending or
threatened against or affecting Pharmasoft, at law or in equity, or before or by
any country, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) arbitration
proceeding relating to Pharmasoft pending under collective bargaining agreements
or otherwise or (iii) governmental inquiry pending or, to the best of GUCT's and
Pharmasoft's knowledge, threatened against or affecting Pharmasoft (including,
without limitation, any inquiry as to the qualification of Pharmasoft to hold or
receive any license or permit). Pharmasoft has not received any opinion or
memorandum or legal advice from legal counsel to the effect that it is exposed,
from a legal standpoint, to any liability or disadvantage which may be material
to its business, prospects, financial condition, operations, property or
affairs. Pharmasoft is not in default with respect to any order, writ,
injunction or decree known to or served upon Pharmasoft of any court or of any
country, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign. There is no action or
suit by Pharmasoft pending or threatened against others. Pharmasoft has complied
with all laws, rules, regulations and orders applicable to its business,
operations, properties, assets, products and services, and Pharmasoft has all
necessary permits, licenses and other authorizations required to conduct its
business as conducted and as proposed to be conducted. There is no existing law,
rule, regulation or order, and neither GUCT nor Pharmasoft after due inquiry is
not aware of any proposed law, rule, regulation or order, whether of any country
or state, which would prohibit or restrict Pharmasoft from, or otherwise
materially adversely affect Pharmasoft in, conducting its business in any
jurisdiction in which it is now conducting business or in which it proposes to
conduct business.
6.8. Proprietary Information of Third Parties. To the best of GUCT's
and Pharmasoft's knowledge, no third party has claimed or has reason to claim
that any person employed by or affiliated with Pharmasoft has (a) violated or
may be violating any of the terms or conditions of his employment,
non-competition or non-disclosure agreement with such third party, (b) disclosed
or may be disclosing or utilized or may be utilizing any trade secret or
proprietary information or documentation of such third party or (c) interfered
or may be interfering in the employment relationship between such third party
and any of its present or former employees. No third party has requested
information from Pharmasoft which suggests that such a claim might be
contemplated. To the best of GUCT's and Pharmasoft's knowledge, no person
42
employed by or affiliated with Pharmasoft has employed or proposes to employ any
trade secret or any information or documentation proprietary to any former
employer, and to the best of GUCT's and Pharmasoft's knowledge, no person
employed by or affiliated with Pharmasoft has violated any confidential
relationship which such person may have had with any third party, in connection
with the development, manufacture or sale of any product or proposed product or
the development or sale of any service or proposed service of Pharmasoft, and
Pharmasoft has no reason to believe there will be any such employment or
violation. To the best of GUCT's and Pharmasoft's knowledge, neither the
carrying on of the business of Pharmasoft as officers, employees or agents by
any officer, director or key employee of Pharmasoft, nor the conduct or proposed
conduct of the business of Pharmasoft, will conflict with or result in a breach
of the terms, conditions or provisions of or constitute a default under any
contract, covenant or instrument under which any such person is obligated.
6.9. Title to Properties. Pharmasoft has good and marketable title to
its properties and assets reflected on the September 30, 1996 balance sheet or
acquired by it since the date of said balance sheet (other than properties and
assets disposed of in the ordinary course of business since the date of said
balance sheet), and all such properties and assets are free and clear of
mortgages, pledges, security interests, liens, charges, claims, restrictions and
other encumbrances, except for liens for or current taxes not yet due and
payable.
6.10. Leasehold Interests. Except as set forth in Schedule 6.13(B), (i)
each lease or agreement to which Pharmasoft is a party under which it is a
lessee of any property, real or personal, is a valid and subsisting agreement
without any default of Pharmasoft thereunder and, to the best of GUCT's and
Pharmasoft's knowledge, without any default thereunder of any other party
thereto; (ii) no event has occurred and is continuing which, with due notice or
lapse of time or both, would constitute a default or event of default by
Pharmasoft under any such lease or agreement or, to the best of GUCT's and
Pharmasoft's knowledge, by any other party thereto; and (iii) Pharmasoft's
possession of such property has not been disturbed and, to the best of
Pharmasoft's knowledge, no claim has been asserted against Pharmasoft adverse to
its rights in such leasehold interests.
6.11. Insurance. Pharmasoft holds valid policies covering
all of the insurance required to be maintained by it under Section
12.4 of the International Stockholders Agreement.
6.12. Taxes. Pharmasoft has filed all tax returns
required to be filed by it, and Pharmasoft has paid all taxes shown
to be due by such returns as well as all other taxes, assessments
and governmental charges which have become due or payable,
including, without limitation, all taxes which Pharmasoft is
43
obligated to withhold from amounts owing to employees, creditors and third
parties. All such taxes with respect to which Pharmasoft has become obligated
pursuant to elections made by Pharmasoft in accordance with generally accepted
practice have been paid and adequate reserves have been established for all
taxes accrued but not yet payable. The Swiss income tax returns of Pharmasoft
have never been audited by the Swiss tax administration. No deficiency
assessment with respect to or proposed adjustment of Pharmasoft's Swiss federal
or cantonal taxes is pending or, to the best of Pharmasoft's knowledge,
threatened. There are no tax liens imposed by any Swiss taxing authority
outstanding against the assets, properties or business of Pharmasoft.
Pharmasoft's net operating losses for Swiss income tax purposes, as set forth in
the financial statements referred to in Section 6.5, are available to offset the
taxable income of Pharmasoft for the current fiscal year and the succeeding
years as per Schedule 6.12 hereto. Consummation of the transactions contemplated
by this Agreement or by any other agreement, understanding or commitment
(contingent or otherwise) to which Pharmasoft is a party or by which it is
otherwise bound will not have the effect of limiting Pharmasoft's ability to use
such net operating losses in full to offset such taxable income. Pharmasoft is
not a party to any tax allocation or sharing agreement. Pharmasoft does not have
any liability or obligation, existing or contingent, as guarantor, transferee,
successor or otherwise, by contract or otherwise, for the federal, state, local
or foreign taxes, assessments and governmental charges payable by any other
entity or person in any jurisdiction including without limitation any member of
a "consolidated group" of which UCT may be deemed to have been a part.
6.13. Other Agreements. Except as set forth in the attached Schedule
6.13(A), Pharmasoft is not a party to or otherwise bound by any written or oral
contract or instrument or other restriction which individually or in the
aggregate could materially adversely affect the business, prospects, financial
condition, operations, property or affairs of Pharmasoft. Except as set forth in
the attached Schedule 6.13(B), Pharmasoft is not a party to or otherwise bound
by any written or oral:
(a) distributor, dealer, manufacturer's representative or sales agency
contract or similar agreement which is not terminable on less than ninety (90)
days' notice without cost or other liability to Pharmasoft;
(b) sales contract which entitles any customer to a rebate or right of
set-off, to return any product to Pharmasoft after acceptance thereof or to
delay the acceptance thereof, or which varies in any material respect from
Pharmasoft's standard form contracts;
44
(c) contract with any labor union (and, to the knowledge of
Pharmasoft, no organizational effort is being made with respect to
any of its employees);
(d) contract or other commitment with any supplier containing any
provision permitting any party other than Pharmasoft to renegotiate the price or
other terms, or containing any pay-back or other similar provision, upon the
occurrence of a failure by Pharmasoft to meet its obligations under the contract
when due or the occurrence of any other event;
(e) contract for the future purchase of fixed assets or for
the future purchase of materials, supplies or equipment in excess
of its normal operating requirements;
(f) contract for the employment of any officer, employee or other
person (whether of a legally binding nature or in the nature of informal
understandings) on a full-time or consulting basis which is not terminable on
notice without cost or other liability to Pharmasoft, except normal severance
arrangements and accrued vacation pay;
(g) bonus, pension, profit-sharing, retirement, hospitalization,
insurance, stock purchase, stock option or other plan, contract or understanding
pursuant to which benefits are provided to any employee of Pharmasoft (other
than group insurance plans applicable to employees generally);
(h) agreement or indenture relating to the borrowing of money
or to the mortgaging or pledging of, or otherwise placing a lien or
security interest on, any asset of Pharmasoft;
(i) guaranty of any obligation for borrowed money or
otherwise;
(j) voting trust or agreement, stockholders agreement, pledge
agreement, buy-sell agreement or first refusal or preemptive rights agreement
relating to any securities of Pharmasoft;
(k) agreement, or group of related agreements with the same party or
any group of affiliated parties, under which Pharmasoft has advanced or agreed
to advance money or has agreed to lease any property as lessee or lessor;
(l) agreement or obligation (contingent or otherwise) to issue, sell or
otherwise distribute or to repurchase or otherwise acquire or retire any share
of its capital stock or any of its other equity securities;
(m) assignment, license or other agreement with respect to
any form of intangible property;
45
(n) agreement under which it has granted any person any
registration rights;
(o) agreement under which it has limited or restricted its
right to compete with any person in any respect;
(p) other contract or group of related contracts with the same party
involving more than $10,000 or continuing over a period of more than six months
from the date or dates thereof (including renewals or extensions optional with
another party), which contract or group of contracts is not terminable by
Pharmasoft without penalty upon notice of thirty (30) days or less, but
excluding any contract or group of contracts with a customer of Pharmasoft for
the sale, lease or rental of NDA's products or services if such contract or
group of contracts was entered into by Pharmasoft in the ordinary course of
business; or
(q) other contract, instrument, commitment, plan or arrangement, a copy
of which would be required to be filed with the Securities and Exchange
Commission (the "Commission") as an exhibit to a registration statement on Form
S-1 if Pharmasoft were registering securities under the Securities Act of 1933,
as amended (the "Securities Act").
Pharmasoft has in all material respects performed all obligations required to be
performed by it to date, has received no notice of default and are not in
default (with due notice or lapse of time or both) under any lease, agreement or
contract now in effect to which Pharmasoft is a party or by which it or its
property may be bound. Pharmasoft has no present expectation or intention of not
fully performing all its obligations under each such lease, contract or other
agreement, and neither GUCT nor Pharmasoft has any knowledge of any breach or
anticipated breach of the other party to any contract or commitment to which
Pharmasoft is a party. Pharmasoft is in full compliance with all of the terms
and provisions of the Pharmasoft Charter Documents.
6.14. Patents, Trademarks, etc. Set forth in Schedule 6.14 is a list
and brief description of all patents, patent rights, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇ applications,
trade names and copyrights, and all applications for such which are in the
process of being prepared, owned by or registered in the name of Pharmasoft, or
of which Pharmasoft is a licensor or licensee or in which Pharmasoft has any
right, and in each case a brief description of the nature of such right.
Pharmasoft owns or possesses adequate licenses or other rights to use all
patents, patent applications, trademarks, trademark applications, service marks,
service ▇▇▇▇ applications, trade names, copyrights, manufacturing processes,
formulae, trade secrets and know-how (collectively, "Intellectual Property")
necessary or desirable to the conduct of its business as conducted and as
proposed to be conducted, and no claim is pending or, to the
46
best of GUCT's and Pharmasoft's knowledge, threatened to the effect that the
operations of Pharmasoft infringe upon or conflict with the asserted rights of
any other person under any Intellectual Property, and there is no basis for any
such claim (whether or not pending or threatened). To the best of GUCT's and
Pharmasoft's knowledge, no claim is pending or threatened to the effect that any
such Intellectual Property owned or licensed by Pharmasoft, or which Pharmasoft
otherwise has the right to use, is invalid or unenforceable by Pharmasoft, and
there is no basis for any such claim (whether or not pending or threatened). To
the best of GUCT's and Pharmasoft's knowledge, all technical information
developed by and belonging to Pharmasoft which has not been patented has been
kept confidential. Pharmasoft has not granted or assigned to any other person or
entity any right to manufacture, have manufactured, assemble or sell the
products or proposed products or to provide the services or proposed services of
Pharmasoft, except as per agreements disclosed on Schedule 6.13.
6.15. Loans and Advances. Other than as set forth on Schedule 6.15,
Pharmasoft does not have any outstanding loans or advances to any person and is
not obligated to make any such loans or advances, except, in each case, for
advances to employees of Pharmasoft in respect of reimbursable business expenses
anticipated to be incurred by them in connection with their performance of
services for Pharmasoft.
6.16. Assumptions, Guaranties, etc. of Indebtedness of
Other Persons. Pharmasoft has not assumed, guaranteed, endorsed or
otherwise become directly or contingently liable on any
indebtedness of any other person (including, without limitation,
liability by way of agreement, contingent or otherwise, to
purchase, to provide funds for payment, to supply funds to or
otherwise invest in a debtor, or otherwise to assure a creditor
against loss), except for guaranties by endorsement of negotiable
instruments for deposit or collection in the ordinary course of
business.
6.17. Significant Customers and Suppliers. No customer or supplier
which was significant to Pharmasoft during the period covered by the financial
statements referred to in Section 6.5 or which has been significant to
Pharmasoft thereafter, has terminated, materially reduced or threatened to
terminate or materially reduce its purchases from or provision of products or
services to Pharmasoft, as the case may be.
6.18. Governmental Approvals. No registration or filing with, or
consent or approval of or other action by, any Federal, state or other
governmental agency or instrumentality is or will be necessary for the valid
execution, delivery and performance by Pharmasoft of this Agreement and the
Other Agreements, including the delivery and exchange of the Pharmasoft Shares
with International.
47
6.19. Disclosure. Neither this Agreement nor the Other Agreements, nor
any Schedule Annex or Exhibit to this Agreement or the Other Agreements,
contains an untrue statement of a material fact or omits a material fact
necessary to make the statements contained herein or therein not misleading.
None of the statements, documents, certificates or other items prepared or
supplied by GUCT or Pharmasoft with respect to the transactions contemplated
hereby contains an untrue statement of a material fact or omits a material fact
necessary to make the statements contained therein not misleading. There is no
fact which Pharmasoft or GUCT has not disclosed to NDA and its counsel in
writing and of which Pharmasoft or GUCT is aware which materially and adversely
affects or could materially and adversely affect the business, prospects,
financial condition, operations, property or affairs of Pharmasoft.
6.20. Offering of the Shares. Neither Pharmasoft nor any person acting
on its behalf has taken or will take any other action (including, without
limitation, any offer, issuance or sale of any security of Pharmasoft under
circumstances which might require the integration of such security with
Pharmasoft's securities under the Securities Act or the rules and regulations of
the Commission thereunder), in either case so as to subject the delivery and
exchange of the Pharmasoft Shares to and with International, to the registration
provisions of the Securities Act.
6.21. Brokers. Pharmasoft has no contract, arrangement or
understanding with any broker, finder or similar agent with respect
to the transactions contemplated by this Agreement.
6.22. Officers. Pharmasoft does not have any officers or
employees.
6.23. Transactions With Affiliates. Except as set forth in Schedule
6.23, no director, officer, employee or stockholder of Pharmasoft, or member of
the family of any such person, or any corporation, partnership, trust or other
entity in which any such person, or any member of the family of any such person,
has a substantial interest or is an officer, director, trustee, partner or
holder of more than 5% of the outstanding capital stock thereof, is a party to
any transaction with Pharmasoft, including any contract, agreement or other
arrangement providing for the employment of, furnishing of services by, rental
of real or personal property from or otherwise requiring payments to any such
person or firm.
6.24. Employees. Pharmasoft has complied in all material
respects with all applicable laws of Switzerland relating to the
employment of labor, including provisions relating to wages, hours,
collective conventions and the payment of AVS and LPP charges.
48
6.25. Updating. GUCT agrees and undertakes to update the
representations and schedules herein for any changes between the
execution hereof and the Closing.
SECTION 7. REPRESENTATIONS AND WARRANTIES CONCERNING THE NDA
STOCKHOLDERS' AND GUCT'S EXCHANGE OF THEIR
RESPECTIVE SHARES INTO INTERNATIONAL SHARES
7.1. Representations and Warranties Concerning the NDA Stockholders'
and GUCT'S Exchange of their Respective Shares into International Shares. As of
the execution of this Agreement and at the Closing Date, each of the NDA
Stockholders and Converting NDA Stockholders hereby severally represents and
warrants to NDA and GUCT, and GUCT hereby represents and warrants to NDA and the
NDA Stockholders, that, except as set forth in any Schedule attached hereto:
(a) It is an "accredited investor" within the
meaning of Rule 501 under the Securities Act and was not organized for the
specific purpose of acquiring the International Shares.
(b) It has sufficient knowledge and experience in
investing in companies similar to International so as to be able to evaluate the
risks and merits of the exchange of its Outstanding NDA Shares, (including with
respect to the Converting NDA Stockholders, their Converted NDA Shares), and
including, in the case of GUCT, its UCT Shares and Pharmasoft Shares, for shares
of International and is able to financially bear the risks thereof.
(c) It has had an opportunity to discuss the
business of NDA, UCT and Pharmasoft and the proposed business of International,
including each company's respective management and financial affairs.
(d) The International Shares being acquired by it
in exchange for its Outstanding and Converted NDA Shares, as the case may be,
and in the case of GUCT, its Outstanding and Converted NDA Shares as well as its
UCT Shares and Pharmasoft Shares, are being acquired for its own account for the
purposes of investment and not with a view to or for sale in connection with any
distribution thereof.
(e) It understands that (i) the International
Shares have not been registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration requirements under the
Securities Act pursuant to Section 4(2) thereof or Rules 505 or 506 promulgated
under the Securities Act; (ii) the International Shares must be held
indefinitely unless a subsequent disposition thereof is made pursuant to
registration under the Securities Act or by exemption from such registration;
(iii) the International Shares will bear a legend to such effect
49
and (iv) International will make a notation on its transfer books
to such affect.
(f) It has made its decision to acquire the
International Shares without reliance on the decision of any other party to
acquire International Shares.
SECTION 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE
CONTRIBUTING INTERNATIONAL STOCKHOLDERS' AND
CONVERTING NDA STOCKHOLDERS' PURCHASE OF NEW
INTERNATIONAL SHARES AND ACQUISITION OF CONVERTED
NDA SHARES
8.1. Representations and Warranties Concerning the Contributing
International Stockholders' and Converting NDA Stockholders' Purchase of New
International Shares and Acquisition of Converted NDA Shares. As of the
execution of this Agreement, at the Closing Date and, with respect to the
purchase of New International Shares after the Closing Date, as of the date of
such purchase, the Contributing International Stockholders and the Converting
NDA Stockholders hereby severally represent and warrant to NDA and International
that, except as set forth in any Schedule attached hereto:
(a) It is an "accredited investor" within the
meaning of Rule 501 under the Securities Act and was not organized for the
specific purpose of acquiring the New International Shares or the Converted NDA
Shares, as the case may be.
(b) It has sufficient knowledge and experience in
investing in companies similar to NDA and International so as to be able to
evaluate the risks and merits of the purchase of the New International Shares
and Converted NDA Shares and is able to financially bear the risks thereof.
(c) It has had an opportunity to discuss the
business of NDA and proposed business of International, including each company's
respective management and financial affairs.
(d) The New International Shares and the Converted
NDA Shares, as the case may be, are being acquired by it for its own account for
the purposes of investment and not with a view to or for sale in connection with
any distribution thereof, except as to the delivery and exchange to
International contemplated hereby of the Converted NDA Shares.
(e) It understands that (i) the New International
Shares and Converted NDA Shares have not been registered under the Securities
Act by reason of their issuance in a transaction exempt from the registration
requirements under the Securities Act pursuant to Section 4(2) thereof or Rules
505 or 506 promulgated
50
under the Securities Act; (ii) the New International Shares and Converted NDA
Shares must be held indefinitely unless a subsequent disposition is made
pursuant to registration under the Securities Act or by exemption from such
registration; (iii) the New International Shares and Converted NDA Shares will
bear a legend to such effect; and (iv) NDA will make a notation on its transfer
books to such affect.
(f) It has made its decision to purchase the New
International Shares and Converted NDA Shares without reliance on the decision
of any other party to purchase the New International Shares and Converted NDA
Shares.
SECTION 9. CONDITIONS TO THE OBLIGATIONS OF NDA, THE NDA
STOCKHOLDERS, THE CONTRIBUTING NDA STOCKHOLDERS
(OTHER THAN GUCT) AND THE CONVERTING NDA
STOCKHOLDERS (OTHER THAN GUCT)
9.1. Conditions to the Obligations of NDA, the NDA Stockholders, the
Contributing NDA Stockholders (other than GUCT) and the Converting NDA
Stockholders (other than GUCT. The obligation of NDA, the NDA Stockholders, the
Contributing International Stockholders (other than GUCT) and the Converting NDA
Stockholders (other than GUCT) to perform their duties and obligations
hereunder, to enter into the various transactions specified in Section 1, and to
make their respective deliveries at Closing as specified in Section 2 is subject
to the fulfillment of the following conditions:
A. Representations and Warranties to be True and
Correct. That the representations and warranties concerning GUCT, UCT
and Pharmasoft, as set forth in Sections 4, 5 and 6 hereof, shall be
true, complete and correct on and as of the Closing Date with the same
force and effect as though such representations and warranties had been
made on and as of such date, except to the extent not material to the
financial condition, results of operations, business, prospects,
working capital, assets or liabilities of each of GUCT, UCT or
Pharmasoft, as the case may be, and the President or Chief Executive
Officer of GUCT shall, at and as of the Closing Date, have certified to
such effect to NDA and the NDA Stockholders in writing.
B. Performance. GUCT, in all its capacities
hereunder including as Converting NDA Stockholder and
Contributing International Stockholder, and International
shall have performed and complied with all agreements
contained herein required to be performed and complied with by
each of them prior to or at the Closing Date, and GUCT, in all
its capacities hereunder, including as Contributing
International Stockholder and Converting NDA Stockholder, and
International shall have made all Closing deliveries set forth
51
in Section 2 to be made by them, and the President or Chief Executive
Officer of each of GUCT, and International shall have certified to such
effect and to the further effect that all the conditions set forth in
this Section 9 have been satisfied.
C. Sufficient NDA Shares Exchanged. Sufficient
Outstanding NDA Shares and Converted NDA Shares, shall be
submitted for exchange to International, so that International
will own, after giving effect to the Closing, at least 90% of
the outstanding capital stock of NDA.
D. Proceedings Satisfactory. All corporate and
other proceedings to be taken by each of GUCT, UCT, Pharmasoft
and International, or by any of their stockholders, in
connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in form and
substance to NDA and its counsel and to the NDA Stockholders
and their respective counsel, if any, and NDA and its counsel
shall have received all such counterpart originals or
certified or other copies of such documents as they may
reasonably request.
SECTION 10. CONDITIONS TO THE OBLIGATIONS OF GUCT
10.1. Conditions to the Obligations of GUCT. The obligations of GUCT to
perform its duties and obligations hereunder, to enter into the various
transactions specified in Section 1, and to make its respective deliveries at
Closing as specified in Section 2, is subject to the fulfillment of the
following conditions:
A. Representations and Warranties to be True and
Correct. That the representations of NDA, the NDA Stockholders and the
Converting NDA Stockholders (not including GUCT) set forth in Sections
3, 7 and 8 herein, shall be true, complete and correct on and as of the
Closing Date with the same force and effect as though such
representations and warranties had been made on and as of such date,
except to the extent not material to the financial condition, results
of operations, business, prospects, working capital or liabilities of
NDA, and with respect only to the representations and warranties of
NDA, the President or Chief Executive Officer of NDA shall, at and as
of the Closing Date, have certified to such effect in writing.
B. Performance. Each of NDA, the NDA Stockholders
and the Converting NDA Stockholders (not including GUCT) and
those NDA Stockholders who are Contributing International
Stockholders shall have performed and complied with all
agreements contained herein required to be performed and
complied with by each of them prior to or at the Closing Date,
52
and each shall have made all Closing deliveries set forth in Section 2
to be made by them, and the President or Chief Executive Officer of NDA
shall have certified to such effect in writing, but only as to NDA's
performance and Closing deliveries; and to the further effect that all
the conditions set forth in this Section 10 applicable to NDA have been
satisfied; provided however, that if NDA, all Contributing
International Stockholders (other than GUCT) and all Converting NDA
Stockholders (other than GUCT) perform their obligations hereunder, and
sufficient Outstanding and Converted NDA Shares are submitted for
exchange to International so that after giving effect to the Closing,
International will own not less than 90% of the outstanding capital
stock of NDA, (assuming for purposes of this calculation, that GUCT has
fully performed its obligations hereunder and has exchanged all of its
Converted and Outstanding NDA Shares for International Shares,
irrespective of whether it has done so) then the performances required
by this Section 10.1(B) of the NDA Stockholders shall be deemed
satisfied.
C. Proceedings Satisfactory. All corporate and
other proceedings to be taken by NDA in connection with the
transactions contemplated hereby and all documents incident
thereto shall be satisfactory in form and substance to GUCT
and UCT and their respective counsel, if any, and such parties
and their respective counsel shall have received all such
counterpart originals or certified or other copies of such
documents as they may reasonably request.
SECTION 11. INTENTIONALLY OMITTED.
SECTION 12. INTENTIONALLY OMITTED.
SECTION 13. COVENANTS BETWEEN EXECUTION OF THIS AGREEMENT AND
THE CLOSING DATE
13.1 Conduct of the Business of NDA, UCT and GUCT prior to the Closing
Date. Each of GUCT (on behalf of itself, UCT, Pharmasoft and International) (to
the extent that GUCT controls the policies of International or causes
International to act or to refrain from acting prior to the Closing Date) and
NDA covenant and agree that, prior to the Closing Date, except as otherwise
consented to or approved in writing by NDA, if the matter relates to UCT, GUCT,
Pharmasoft or International, and except as otherwise consented to in writing by
GUCT, if the matter relates to NDA, or except as required to consummate the
transactions contemplated by, this Agreement:
53
(a) NDA, GUCT, Pharmasoft, UCT and International, including
their respective subsidiaries (the "Operating Companies"), shall each conduct
their respective businesses in the ordinary course and consistent in all
material respects with past practice and shall use all reasonable efforts to
preserve substantially intact their respective business organizations, to keep
available the services of their present officers, employees and consultants and
to preserve their respective present relationships with customers, suppliers,
payors and other persons with whom they have a significant business
relationship;
(b) None of the Operating Companies shall (i) amend their
respective Charter Documents or Bylaws, (ii) declare, set aside or pay any
dividend or other distribution or payment in cash, securities or property in
respect of their respective outstanding shares of capital stock, (iii) make any
direct or indirect redemption, retirement, purchase or other acquisition of any
of its capital stock or (iv) split, combine or reclassify its outstanding shares
of capital stock.
(c) No Operating Company shall, directly or indirectly (i)
issue, grant, sell or pledge or agree to propose to issue, grant, sell or pledge
any shares of, or rights or securities of any kind to acquire any shares of any
company except as provided in this Agreement, (ii) other than in the ordinary
course of business and consistent with past practice, incur any material
indebtedness for borrowed money, (iii) waive, release, grant or transfer any
rights of material value, (iv) except as provided in clause (v) below, merge or
consolidate with any person or adopt any plan of liquidation or dissolution, (v)
acquire, propose to acquire or enter into an agreement to acquire any assets,
stock or other interest of a third party, (vi) transfer, lease, license, sell or
dispose of a material portion of assets or any material assets, (vii) permit any
material revaluation of any asset (including, without limitation, any writing
down of the value of inventory or writing off of notes or accounts receivable),
(viii) change any accounting principles or methods except insofar as may be
required by changes in generally accepted accounting principles or (ix) mortgage
or pledge any of their assets or properties or subject any of their assets or
properties to any material liens, charges, encumbrances, imperfections of title,
security interests, options or rights or claims of other with respect thereto;
(d) None of the Operating Companies directly or indirectly,
shall (i) increase the cash compensation payable to or become payable by it to
any of its employees, officers, consultants or directors; except cash
compensation payable to non-officer employees to the extent consistent with past
practice and in no event to a rate of total compensation increased by more than
five percent (5%) over such individual's current such rate, (ii) enter into,
adopt or amend any stock option, stock purchase, profit-sharing, pension,
retirement, deferred compensation, restricted
54
stock or severance plan, agreement or arrangement for the benefit of employees,
officers, directors or consultants of an Operating Company, (iii) enter into or
amend any employment or consulting agreement, or (iv) make any loan or advance
to, or enter into any written contract, lease or commitment with, any officer,
employee, consultant or director of an Operating Company;
(e) No Operating Company shall, directly or indirectly,
assume, guarantee, endorse or otherwise become responsible for the obligations
of any other individual, corporation or other entity, or make any loans or
advances to any individual, corporation or other entity except in the ordinary
course of business and consistent with past practices;
(f) No Operating Company shall authorize or enter into any
agreement to do any of the things described in clauses (a) through (e) of this
Section 13.1.
13.2. Access to Properties and Records. Each party shall afford to the
other and their respective accountants, counsel and representatives, reasonable
access during normal business hours throughout the period prior to the Closing
Date to all of their respective properties (including, without limitation,
books, contracts, commitments and written records), as well as those of each
Operating Company in which it, either alone or with other parties similarly
situated, collectively own a controlling interest, and shall make reasonably
available their respective officers and employees to answer fully and promptly
questions put to them thereby; provided, however, that no investigation pursuant
to this Section 13.2 shall alter any representation or warranty of any party
hereto or the conditions to the obligations of the parties hereto.
13.3 No Solicitation, Etc.
(a) Prior to the Closing Date, each Operating Company shall
not, and shall cause each of its officers, directors, employees, agents, legal
and financial advisors and affiliates not to, directly or indirectly, make,
solicit, encourage, initiate or enter into any agreement or agreement in
principle or announce any intention to do any of the foregoing, with respect to
any offer or proposal to acquire all or a substantial part of an Operating
Company's business and properties or a substantial amount of an Operating
Company's equity securities or debt securities whether by purchase, merger,
purchase or assets, tender offer, exchange offer, business offer, business
combination or otherwise (any such proposal or offer being hereinafter referred
to as a "Third Party Transaction").
(b) Prior to the Closing Date, an Operating Company shall not,
and shall cause each of their officers, directors, legal and financial advisors,
agents and affiliates not to, directly or
55
indirectly, participate in any negotiations or discussions regarding, or furnish
any information with respect to, or otherwise cooperate in any way in connection
with, or assist or participate in, facilitate or encourage, any effort or
attempt to effect or seek to effect, a Third Party Transaction with or involving
any other person. NDA and GUCT (on behalf of itself, UCT and Pharmasoft)
represents and warrants that it is not currently involved in any negotiations
with any person with respect to any Third Party Transaction not hereby
contemplated.
13.4 Employee Benefits Plans. Except as otherwise provided in this
Agreement, each Operating Company's employee benefit plans listed on any
Schedule or Annex hereto which are in effect at the date of this Agreement shall
remain in effect immediately following the Closing Date, except each person
having an option to purchase shares of NDA shall be instead deemed to have an
option to purchase a number of International Shares equal to the exchange ratio
of NDA Shares for Shares of International set forth in Section 1.3.
13.5 Confidentiality. Each of NDA, the NDA Stockholders, GUCT, on
behalf of itself, Pharmasoft and UCT, agrees that it will not, and will cause
its respective representatives not to, use any information obtained from any
other party for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement. Subject to the requirements of law, each party
hereto will keep confidential, and will cause its respective representatives to
keep confidential, all information and documents obtained except as otherwise
consented by the person to whom the information or documents relates.
13.6 Supplemental Disclosure Schedules. Each of GUCT, UCT and
Pharmasoft, on the one hand, and NDA on the other hand, shall supplement their
respective Annexes and Schedules, representation and warranties delivered in
connection with this Agreement as of the Closing Date to the extent necessary to
reflect matters permitted by, or consented to by, the other under this
Agreement. In addition, from time to time prior to the Closing Date, each of
NDA, GUCT, Pharmasoft and UCT will promptly deliver to the other parties such
amended or supplemental material as may be necessary to make the Schedules,
Annexes, representations and warranties accurate and complete in all material
respects as of the Closing Date; provided, however, that no such disclosure
shall have any effect for the purpose of determining the satisfaction of the
conditions to Closing set forth in Sections 9 and 10 of this Agreement.
13.7 No Action. Except as contemplated by this Agreement, no party
hereto will, nor will any Operating Company permit any of its subsidiaries to,
take or agree or commit to take any action that is reasonably likely to make any
of its representations or warranties hereunder inaccurate in any material
respect at the date made (to the extent so limited), or as of the Closing Date.
56
13.8 Notification of Certain Matters; Delivery of Financial
Information.
(a) NDA agrees that it shall give prompt notice to GUCT, and
GUCT will give prompt notice to NDA and the NDA Stockholders of (i) any known
breach of any representations or warranties contained in this Agreement at any
time from the date hereof to the Closing Date and (ii) any material failure of
any party, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that failure to
give such notice shall not constitute a waiver of any defense that may be
validly asserted.
(b) Each Operating Company shall furnish the other Operating
Companies with all financial, operating and other information and data as each
such Operating Company, through its officers, employees or agents, may
reasonably request and shall promptly furnish to the other party a copy of.
13.9 Changes in Capital Stock. Prior to the Closing Date, no Operating
Company shall disclose, set aside or pay any dividend or other distribution or
payment in cash, securities or property in respect of shares of its capital
stock.
13.10 Reasonable Efforts to Procure Required Consents. Each of NDA and
GUCT agrees to use all reasonable efforts to secure any required third party
consents, such as those of lenders, government agencies, regulatory agencies,
stockholders, directors, etc.
SECTION 14. TERMINATION
14.1. Termination by Mutual Consent. This Agreement may
be terminated and the transactions contemplated hereby abandoned at
any time prior to the Closing Date, by the mutual consent of GUCT,
on the one hand, and NDA and the majority in interest of NDA
Stockholders, on the other hand.
14.2. Termination by either NDA and the NDA Stockholders, on the one
hand, or GUCT, on the other hand. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned (i) by the decision of NDA and
a majority in interest of the NDA Stockholders if the Closing has not occurred
on or prior to March 31, 1997, unless such Closing has not occurred due to the
failure of NDA or the NDA Stockholders to perform or observe any covenant,
agreement or condition thereof to be performed or observed by it or any of them
at or before the Closing Date; or (ii) by the decision of GUCT, if the Closing
has not occurred on or before March 31, 1997, unless such Closing has not
occurred due to the failure of GUCT to perform or observe any covenant,
agreement
57
or condition thereof to be performed or observed by it or any of
them at or before the Closing Date.
14.3. Termination by NDA and the NDA Stockholders. This
--------------------------------------------
Agreement may be terminated prior to the Closing Date by the
decision of NDA and a majority in interest of the NDA Stockholders
and the transactions contemplated hereby may be abandoned in the
event (i) there has been a breach by GUCT of any representation or
warranty contained in this Agreement or the Other Agreements, the
effect of which is to materially adversely impact the business or
financial condition of GUCT; or (ii) there has been a breach in any
material respect of any of the covenants or agreements set forth in
this Agreement or the Other Agreements, on the part of GUCT, which
breach materially adversely impacts GUCT, UCT, Pharmasoft or
International, and which breach is not curable, or if curable, is
not cured within 30 days after written notice of breach is given by
NDA, or a majority in interest of the NDA Stockholders, to GUCT.
14.4. Termination by GUCT. This Agreement and the Other Agreements may
be terminated prior to the Closing Date by GUCT and the transactions
contemplated hereby and thereby may be abandoned, in the event (i) there has
been a breach by NDA or the NDA Stockholders of any representation or warranty
contained in this Agreement or the Other Agreements, the effect of which is to
materially adversely impact the business or financial condition of NDA; or (ii)
there has been a breach in any material respect of any of the covenants or
agreements set forth in this Agreement or the Other Agreements, on the part of
NDA or the NDA Stockholders, which breach materially adversely impacts NDA, and
which breach is not curable, or if curable, is not cured within 30 days after
written notice of breach is given by GUCT to NDA, except to the extent such
breach is not a condition to Closing as described in Section 10.1(B).
14.5. Effect of Termination and Abandonment. (a) Subject
--------------------------------------
to sharing of costs for professional fees as provided in Section
-------
15.1, and the confidentiality provisions of Section 13.5, if this
---- ------------
Agreement is terminated pursuant to Section 14.1, the parties shall
------------
have no further obligations to one another, and any agreements
which are to be terminated hereby (pursuant to the various
termination agreements to be delivered at Closing) shall continue
in full force and effect.
(b) In the event of termination of this Agreement
pursuant to Sections 14.2, 14.3 or 14.4, all obligations of the parties to one
another hereunder shall terminate, except for the survival of representations,
warranties and agreements pursuant to Section 15.2, and except that the various
agreements to be terminated hereby shall continue in full force and effect, and
provided further that nothing herein shall prejudice the ability of a
non-breaching party from seeking damages from any other party for
58
any breach of this Agreement pursuant to the indemnification provisions set
forth in the International Escrow Agreement.
SECTION 15. MISCELLANEOUS PROVISIONS
15.1 Costs and Expenses. International shall pay its own legal,
accounting and other professional fees and due diligence expenses and those of
all parties hereto in connection with the preparation, execution, delivery and
performance of the terms of this Agreement; provided, however, that NDA and GUCT
shall each pay 50% of the legal, accounting and other professional fees and due
diligence expenses incurred by NDA if the transaction fails to close for any
reason, provided further that if such failure to close is due solely to the
fault of any party other than NDA or an NDA Stockholder, GUCT shall pay 100% of
all such expenses and fees; and provided further that if such failure to close
is due solely to the fault of any party other than GUCT, NDA shall pay 100% of
all such expenses and fees.
15.2 Survival of Representations and Warranties.
(a) Except as set forth in subparagraph (b) hereof, all
of the representations and warranties contained herein or in any certificate,
statement, document or instrument furnished hereunder or under the Other
Agreements shall survive (even if the party to whom any such representation or
warranty was made knew or had reason to know of any misrepresentation or breach
of warranty at the time of Closing) for a period of one year following the
Closing Date (the "Survival Period"), after which all liability with respect to
such representations and warranties shall terminate, except as to any alleged
inaccuracy or breach thereof of which any party prior to the termination of such
period shall have advised the other in writing, specifying in reasonable detail
the representation or warranty that is alleged to be inaccurate or breached. The
representations and warranties shall not be merged into any agreement,
assignment or transfer document that may be executed and delivered at or
subsequent to the Closing. The covenants of each party shall continue in full
force and effect in accordance with their respective terms. All representations
and warranties shall be deemed to have been relied upon, notwithstanding any
such investigation or the decision by any party to nonetheless complete the
Closing.
(b) All of the representations and warranties by GUCT
contained herein or in any certificate, statement, document or instrument
furnished hereunder or under the other Agreements shall survive beyond the
Survival Period until the applicable statute of limitations in the case of any
Action against or Damages sustained by an NDA Indemnified Party (as such terms
are defined in the Escrow, Indemnification and Arbitration Agreement) resulting
from, arising out of or in respect of the transfer of the "CT Plus" assets ("CT
Plus Transfer") from JS Pathology Plc ("JSP") to UCT
59
under either (i) the United Kingdom Insolvency Act or (ii) the United Kingdom
Companies Act substantially to the effect that the CT Plus Transfer was a
transfer of assets at a below market value and a deemed distribution at a time
when JSP did not have sufficient distributable reserves.
(c) All of the representations and warranties by any party
hereto contained herein or in any certificate, statement, document or instrument
furnished hereunder or under the other Agreements shall survive beyond the
Survival Period until the applicable statute of limitations in the case of
fraud. As used in this Section 15.2(c), the term "fraud" shall mean an
intentional or reckless misrepresentation or breach of warranty, or an
intentional or reckless omission to state a material fact necessary to make the
statements made, in light of the circumstances under which they were made, not
misleading.
15.3 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware without
giving effect to the conflicts of laws provisions thereof.
15.4 Notices. All notices, approvals and other communications which may
be or are required to be given, served or sent by either party pursuant to this
Agreement, shall be in writing and shall be delivered personally, or sent by
nationally recognized overnight courier service, or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
if to GUCT:
▇▇▇-▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇
Attn: Chief Executive Officer
with a copy to:
Unilabs SA
▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
if to NDA:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
60
with a copy to:
▇▇▇▇▇▇▇, Lippe, Goldstein, Wolf & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
if to NDA Stockholders:
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, Lippe, Goldstein, Wolf & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Each party may designate by notice in writing as aforesaid a new address to
which any notice, may thereafter be so given, served or sent. Each notice, which
shall be mailed, sent or delivered in the manner described above, shall be
deemed sufficiently given, served, sent or received for all purposes at such
time as it is delivered to the addressee (with the return receipt, the delivery
receipt or, with respect to a facsimile the answer back being deemed conclusive
confirmation of such delivery).
15.5 Jurisdiction. The nature and jurisdiction of any legal proceedings
commenced by any party arising out of any of the transactions or obligations
contemplated by this Agreement (not including the International Stockholders'
Agreement, International Registration Rights Agreement, or the Poly/LIVF
Non-Competition Agreement or GUCT/UniHolding Non-Competition Agreement) shall be
as provided under the International Escrow Agreement.
15.6 No Third Party Beneficiary. This Agreement is entered
into, and its provisions shall be, for the sole and exclusive
benefit of the parties hereto and their respective successors and
permitted assigns.
15.7 Sales and Transfer Taxes. All sales and transfer taxes (including
taxes, if any, imposed upon the transfer of any of the Outstanding or Converted
NDA shares, or the UCT or Pharmasoft Shares) and other taxes, filing, recording
and registration fees and similar fees payable in connection with the
contemplated transactions shall be paid by International when due on or
following the Closing Date, except for taxes based upon the income or capital
gains of any party or parties, with respect to consideration received on the
transfer of any Outstanding or
61
Converted NDA Shares or, UCT Shares or Pharmasoft Shares owned by such party,
which taxes will solely be the responsibility of such party.
15.8 Assignment; Amendment; Waiver. No party shall assign any of or its
rights or obligations under this Agreement whether by written agreement or
operation of law, without the prior written consent of (i) NDA, (ii) GUCT, on
behalf of itself and International; and (iii) not less than a majority in
interest of the NDA Stockholders. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and
permitted assigns. No provision of this Agreement may be amended, modified,
waived, discharged or terminated except by written agreement duly executed by
each of (i) NDA; (ii) GUCT, on behalf of itself and International; and (iii) by
not less than a majority in interest of NDA Stockholders; and then only to the
extent set forth in such writing. Neither the waiver by any of the parties
hereto of a breach of or a default under any one or more of the provisions of
this Agreement, nor the failure of any of the parties, on one or more occasions,
to enforce any of the provisions of this Agreement or the Other Agreements or to
exercise any right or privilege hereunder shall thereafter be construed as a
waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights or privileges hereunder.
15.9 Entire Agreement; Severability. This Agreement embodies and
constitutes the entire agreement and understandings between the parties with
respect to the subject matter hereof and supersedes and cancels any prior oral
or written agreement, letter of intent proposal executed or delivered by or on
behalf of any of the parties or understanding related to the subject matter
hereof. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be illegal, invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect.
15.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.11 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the
terms defined):
(a) "Designated Offering" shall mean a firmly
underwritten public offering of equity securities of
International in an aggregate amount in excess of $5,000,000;
provided that immediately following the consummation of such
offering, International's shares are listed on a United States
national stock exchange, the
62
National Association of Securities Dealers Automated quotation
National Market or the National Association of Securities
Dealers Automated Quotation Small-Cap Market.
(b) "person" shall mean an individual, corporation,
trust, partnership, joint venture, unincorporated
organization, government agency or any agency or political
subdivision thereof, or other entity.
15.12 Effectiveness. This Agreement shall become effective upon its
execution by (a) all of the parties hereto other than the NDA Stockholders, and
(b) NDA Stockholders who are the owners of at least 90% of the outstanding
common stock of NDA. Any NDA Stockholders not executing this Agreement as
provided in clause (b) above shall become parties hereto upon execution of an
Instrument of Accession in the from attached as Annex 15.12 hereto.
[REMAINDER OF PAGE LEFT BLANK]
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64
PAGE INTENTIONALLY OMITTED
65
IN WITNESS WHEREOF, the undersigned have executed this Master
Combination Agreement as of the date and year first written above.
NDA CLINICAL TRIAL SERVICES, INC.
By: _____________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
LONG ISLAND VENTURE FUND, L.P.
By: _____________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: General Partner
POLY VENTURES II, LIMITED PARTNERSHIP
By: POLY VENTURES ASSOCIATES II,
L.P., Its general partner
By: _______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: General Partner
GLOBAL UNILABS CLINICAL TRIALS, LTD.
By:________________________________
Name:
Title:
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ BROTHERS & COMPANY, INC.**
By:_______________________________
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇ DEUTSCH**
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇**
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇**
DAVSTAR II MANAGED INVESTMENT
CORPORATION N.V.**
By:_______________________________
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇**
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----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇ ▇▇▇▇**
NYS SCIENCE & TECHNOLOGY
FOUNDATION**
By:_______________________________
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇**
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇**
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇**
** By:_____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇,
Attorney-In-Fact
68
Instrument of Accession
The terms and provisions of the Master Combination Agreement dated as
of January __, 1997, among NDA, GUCT and various stockholders of NDA are hereby
accepted and agreed to by the undersigned as of the date hereof.
------------------------ -----------------------------------
Stockholder (Individual) Stockholder (Corporate/Partnership)
________________________ By:________________________________
(Print Name) (Authorized Signature)
Dated: ________________ _______________________________
(Print Name and Title)
69
