<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended August 31, 1995
---------------
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period to
---------- ---------
COMMISSION FILE NO. 0-9833
UNIHOLDING CORP.
----------------
(Exact name of registrant as specified in its charter)
Delaware 58-1443790
- ---------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
96 Spring Street, 8th Floor, New York, New York 10012
- ----------------------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 219-9496
-------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
As of October 13, 1995, there were 24,490,730 shares of Common Stock, par value
$0.01 per share, of the Registrant outstanding.
PAGE 1 OF 18
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UNIHOLDING CORP. AND SUBSIDIARIES
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 1995
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements 3
Consolidated Balance Sheets - August 31, 1995
and May 31, 1995 4
Consolidated Statements of Operations -
Three month periods ended
August 31, 1995 and 1994 6
Consolidated Statements of Cash Flows -
Three month periods ended August 31, 1995
and 1994 7
Notes to Unaudited Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13
PART II - OTHER INFORMATION:
Item 1. Legal Proceedings 16
Item 5. Other Items 17
Item 6. Exhibits 17
Signatures 18
Exhibits (28) 19
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
3
<PAGE> 4
UNIHOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
ASSETS August 31, 1995 May 31, 1995
--------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,297 $ 16,939
Accounts receivable, net of allowance for doubtful accounts 15,535 17,890
Due from related companies 132 124
Inventories 1,819 1,867
Prepaid expenses 2,566 2,921
Other current assets 1,119 1,413
-------- --------
Total current assets 23,468 41,154
-------- --------
NON-CURRENT ASSETS:
Long-term notes receivable 769 2,815
Intangible assets, net 57,766 55,654
Property, plant and equipment, net 32,843 33,511
Other assets, net 679 424
-------- --------
Total non-current assets 92,057 92,404
-------- --------
$115,525 $133,558
======== ========
</TABLE>
See notes to financial statements
4
<PAGE> 5
UNIHOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY August 31, 1995 May 31, 1995
--------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Bank overdrafts $ 5,409 $ 6,501
Lease payable, short-term portion 1,089 1,021
Payable to related parties -- 338
Trade payables 5,024 4,854
Accrued liabilities 4,772 4,997
Long-term debt, current portion 19,258 4,378
Taxes payable, current portion 3,007 2,751
-------- --------
Total current liabilities 38,559 24,840
-------- --------
NON-CURRENT LIABILITIES:
Lease payable, non-current 1,800 1,386
Long-term debt, non-current 30,153 32,662
Taxes payable, long-term portion 191 195
Deferred taxes 4,055 4,534
-------- --------
Total non-current liabilities 36,199 38,777
-------- --------
Total liabilities 74,758 63,617
-------- --------
MINORITY INTERESTS 5,395 32,064
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; authorized 60,000,000 shares;
issued and outstanding 24,340,730 at August 31, 1995
and 24,240,730 at May 31, 1995 243 242
Additional paid-in capital 28,589 31,008
Cumulative translation adjustment 283 1,174
Retained earnings 6,257 5,453
-------- --------
Total stockholders' equity 35,372 37,877
-------- --------
$115,525 $133,558
======== ========
</TABLE>
See notes to financial statements
5
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UNIHOLDING CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months ended August 31
1995 1994
---- ----
<S> <C> <C>
REVENUE $ 22,063 $ 18,229
Operating expenses:
Salaries and related charges 9,963 8,218
Supplies 3,457 3,451
Other operating expenses 5,216 3,453
Depreciation and amortization of tangible assets 1,526 1,149
Amortization of intangible assets 585 494
----------- -----------
OPERATING INCOME 1,316 1,464
Interest, net (473) (458)
Other, net 679 (57)
----------- -----------
Income before taxes and minority interests 1,522 949
Tax provision (403) (416)
----------- -----------
Income before minority interests 1,119 533
Minority interests in income (315) (351)
----------- -----------
NET INCOME $ 804 $ 182
=========== ===========
Weighted average common shares outstanding 24,304,860 22,449,099
Earnings per share of common stock $ 0.03 $ 0.01
</TABLE>
See notes to financial statements
6
<PAGE> 7
UNIHOLDING CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months ended August 31
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 804 $ 182
Adjustments to reconcile net income to net cash
provided by operations:
Minority interests in income 315 351
Depreciation and amortization of tangible assets 1,526 1,149
Amortization of intangible assets 585 494
Other non-cash expenses (4) (2)
Net changes in assets and liabilities, net of acquisitions:
(Increase) Decrease in accounts receivable 1,918 1,542
Decrease in inventories -- (104)
(Increase) in prepaid expenses 189 1,211
(Increase) Decrease in other assets 255 374
Increase (Decrease) in trade payables 292 (610)
Increase (Decrease) in accrued liabilities (249) (1,465)
Increase (Decrease) in reserve for taxes 348 (1,079)
Increase in deferred taxes (378) 141
------- -------
Net cash provided by operating activities 5,601 2,184
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from issuance of share capital 525 --
Repayment of long-term debt (1,628) (217)
Cash proceeds from long-term debt -- 901
Proceeds (reimbursement) from (of) bank overdrafts (974) 864
Proceeds (repayment) of lease debt 563 247
------- -------
Net cash provided by (used in) financing activities (1,514) 1,795
------- -------
</TABLE>
(continued)
7
<PAGE> 8
UNIHOLDING CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(continued)
<TABLE>
<CAPTION>
Three Months ended August 31
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for purchases of property and equipment (1,681) (1,243)
Loans and advances (to) from affiliates,
related companies and shareholders (868) (2,786)
Payment for purchase of interest in subsidiaries (13,000) --
Payment for purchase of intangible assets (227) (17)
Payment for purchase of treasury stock (2,945)
Proceeds from sale of assets 50 --
-------- -------
Net cash used in investing activities (18,671) (4,046)
-------- -------
Effect of exchange rate changes on cash (58) 56
Net increase (decrease) in cash and cash equivalents (14,642) (11)
Cash and cash equivalents, beginning of year 16,939 1,095
-------- -------
Cash and cash equivalents, end of period $ 2,297 $ 1,084
======== =======
</TABLE>
See notes to financial statements
8
<PAGE> 9
UNIHOLDING CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Monetary amounts in thousands, except per share data)
1. DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION
As more fully discussed in UniHolding Corp.'s ("UniHolding") Annual
Report on Form 10-K for the year ended May 31, 1995, UniHolding and its
subsidiaries (collectively the "Company") primarily provide clinical laboratory
testing services to physicians, managed care organizations, hospitals and other
health care providers through its laboratories in Switzerland, the United
Kingdom, Italy and Spain.
On March 31, 1994 UniHolding issued 13,103,459 shares (65.75%) of its
common stock, a promissory note in the amount of $18,000 and canceled a debt in
the amount of $2,900 in exchange for 60% of the capital stock of Unilabs Group
Limited ("UGL"), 100% of the capital stock of Uni Clinical Laboratories UCL
Engineering SA ("UCLE"), and options to acquire certain laboratory operating
companies in Spain and Italy from Unilabs Holdings SA, a Panama corporation,
("Holdings") pursuant to a stock exchange agreement between UniHolding and
Holdings.
UGL was formed pursuant to a Stock Purchase Agreement dated January 19,
1993 among Unilab Corporation ("Old Unilab"), MetCal, Inc. (now known as "Unilab
Corporation") and Holdings. Pursuant to the agreement, which closed on November
10, 1993, Holdings contributed 70% of Unilabs SA, a Swiss corporation ("ULSA"),
subject to the assumption by Unilab Corporation from UGL of a liability of
$21,000 to Holdings and Unilab Corporation contributed 100% of the capital stock
of JS Pathology plc ("JSP") in exchange for 60% and 40%, respectively, of the
capital stock of UGL. Subsequent to November 10, 1993, Holdings and Unilab
agreed upon an increase in the relative value of Holdings' original contribution
by approximately $4,100. Accordingly, UGL issued a note in this amount to
Holdings. JSP was subsequently transferred to United Laboratories Limited
("ULL"), a newly formed United Kingdom corporation and 100% subsidiary of UGL,
in a reorganization which is deemed to have occurred as of November 10, 1993.
The acquisitions referred to above were accounted for as the reverse
acquisition of UniHolding by an "accounting entity" consisting of ULSA and UCLE
because following the acquisitions the former shareholders of ULSA and UCLE were
in control of the Company. Accordingly, the financial statements of the Company
are the financial statements of the "accounting entity" adjusted for the assumed
acquisition, at fair value, of the net assets of UniHolding in exchange for the
issuance of UniHolding's common stock outstanding before the transaction.
The Company accounted for the net assets of UniHolding at the fair
value of the net assets acquired as of March 31, 1994.
On May 31, 1995, the Company exercised its options, acquired on March
31, 1994, to acquire Spanish and Italian laboratory operations from Holdings for
an aggregate cost of $7,342 paid in the form of two promissory notes offset
against cash advances. The acquisitions were accounted for at predecessor cost.
As of May 29, 1995, with a view to streamlining the European subsidiary
structure, UGL sold ULL, its wholly-owned subsidiary, to ULSA, currently an
87.2% subsidiary of UGL.
9
<PAGE> 10
As of June 30, 1995, the Company, UGL and Unilab entered into an
agreement whereby UGL acquired from Unilab 40% of UGL's common stock for a total
consideration of $30,000. The consideration was paid $13,000 in cash, $2,000
through the assumption of a debt from Unilab to JSP, and $15,000 in the form of
a one-year, interest-bearing promissory note. The agreement provides that if the
note is still unpaid six months after its due date, Unilab has the right to
convert it into shares of the Company's common stock. The acquisition of the
minority interest in UGL has been accounted for as a purchase and the excess of
the purchase price over the fair value, which approximates the carrying value,
of the assets acquired has been allocated to goodwill.
The accompanying financial statements have been prepared based on
generally accepted accounting principles in the United States and include the
accounts of all the subsidiaries, as restated for this purpose.
2. MANAGEMENT OPINION
In the opinion of management, the accompanying unaudited interim
financial statements reflect all adjustments which are necessary to present
fairly the financial position, results of operations and cash flows for the
interim periods reported. All such adjustments made were of a normal recurring
nature.
The accompanying interim financial statements and related notes should
be read in conjunction with the consolidated financial statements of the Company
and related notes as contained in the Annual Report on Form 10-K for the year
ended May 31, 1995.
The results of operations and financial position for interim periods
are not necessarily indicative of those to be expected for a full year, due, in
part, to the seasonal fluctuations which are normal for the Company's business.
3. NET INCOME PER SHARE
Net income per share is computed by dividing net income by the weighted
average number of common shares outstanding.
4. PAID-IN CAPITAL INCREASE
As of July 3, 1995, the Company issued 100,000 new shares of common
stock to one investor, at a price of $5.50 per share, including warrants for
50,000 shares at a price of $6.75 exercisable for 18 months from July 3, 1995.
See also Note 7.
5. CUMULATIVE TRANSLATION ADJUSTMENT
The Company's operations are located in Switzerland, the United
Kingdom, Italy and Spain. Its net assets, revenues and expenses are
substantially all denominated in Swiss franc, Sterling pound, Italian lire, and
Spanish pesetas, while the Company presents its consolidated financial
statements in US dollars. In accordance with generally accepted accounting
principles in the United States, net gains and losses arising upon translation
from local currency financial statements are accumulated in a separate component
of Stockholders' Equity, the Cumulative Translation Adjustment account, which
may be realized upon the eventual disposition by the Company of part or all of
its investments.
10
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6. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Three months ended August 31
1995 1994
---- ----
<S> <C> <C>
Cash paid during the period for
Interest $ 747 $ 417
Income taxes 369 1,180
</TABLE>
During the period ended August 31, 1995, in connection with its acquisition of
40% of the share capital of UGL, the Company issued a note of $15,000 and
assumed a note of $2,000 payable to JSP.
7. ACQUISITION OF TREASURY STOCK
At various times during the quarter ended August 31, 1995, the Company
transferred funds to Holdings, with a view to enable Holdings to acquire some
shares of the Company's stock, either from private sources or on the market. As
of August 31, 1995, the balance due by Holdings was approximately $2,900. The
Company has agreed with Holdings that the balance will be paid by Holdings
through the subsequent transfer of 620,000 shares of the Company's stock.
8. EXPANSION INTO CLINICAL TRIALS
As of March 1, 1995, the Company entered into a Cooperation Agreement,
a License Agreement and a Marketing Agreement (together referred to as the "NDA
Agreements") with NDA Clinical Trials Services Inc., a Delaware corporation
("NDA") to provide laboratory testing services to the pharmaceutical industry in
clinical evaluations conducted in both the United States and Europe. According
to the NDA Agreements, the Company and NDA will seek to offer a unique service
to the pharmaceutical industry through their joint efforts in conducting
laboratory tests of pharmaceutical products, utilizing similar procedures and
data management thereby providing a global product. European operations
commenced in the Summer of 1995.
In connection therewith, the Company has formed a wholly-owned
subsidiary whose only activity will be to sell and perform clinical trials
services. The subsidiary's name is Unilabs Clinical Trials Ltd. ("UCT"), and is
domiciled in London (UK). Because the actual operation only commenced in July
1995, during the quarter ended August 31, 1995, UCT has not recorded any income,
while it has incurred expenses aggregating approximately $130. The Company's
Board of Directors has concluded that such expenses are of a start-up nature,
and therefore has decided to defer such expenses to future periods when the
subsidiary begins to generate income. The Company's Board of Directors believes
that such start-up costs will be recoverable from income generated in future
periods.
9. SUBSEQUENT EVENTS
In connection with its decision to expand into the clinical trials
business, as of October 16, 1995, the Company entered into a Stock Purchase
Agreement and an Option Agreement with NDA. Under these Agreements, the Company
acquired 17% of NDA's capital through the purchase of newly-issued shares,
together with an option to increase its stake in NDA to 30% on or before May 31,
1998. The consideration for the acquisition of 17% was $1,188 paid in cash at
closing. The price for the acquisition of the additional 13% will be based on a
formula linked to NDA's revenues for its fiscal year ending December 31, 1997.
11
<PAGE> 12
Simultaneously, UCT granted to NDA and NDA's stockholders (excluding
the Company), an option to subscribe to new shares of UCT based on a formula
linked to UCT's revenues for its fiscal year ending May 31, 1998. The option is
contingent upon the Company exercising its option on NDA's equity, and is
limited to a maximum of 5/7th of the Company's aggregate investment in NDA.
As of October 5, 1995, the Company issued 150,000 new shares of common
stock to two investors, at a price of $5.50 per share, including warrants for
75,000 shares at a price of $6.50 exercisable for 18 months from October 5,
1995.
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ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
As discussed in Note 1 to the accompanying financial statements, the
Company's results for the three month period ended August 31, 1995 give effect
to the acquisition by UniHolding and UGL, as of June 30, 1995, of 40% of the
capital stock of UGL, while the Company's results for the three month period
ended August 31, 1994 included a 40% minority interest on UGL's earnings. The
financial statements also give effect to the acquisition of ULL by ULSA from
UGL. The following table presents the required adjustments to the results of
operations for the three month period ended August 31, 1994, providing a
comparative analysis with the comparable period in the current fiscal year, had
the 40% of UGL's common stock been acquired as of June 1, 1994, and had ULL been
owned by ULSA as of June 1, 1994 (unaudited). The results of operations for the
three month period ended August 31, 1994 were translated into U.S. dollars using
the exchange rates which were then valid.
Had the Spanish and Italian operations been acquired by the Company as
of June 1, 1994, there would have been no material effect on the consolidated
operations of the Company for the three month period ended August 31, 1994.
<TABLE>
<CAPTION>
Three months ended August 31, 1994
---------------------------------- Three months ended
As reported Adjustments Pro forma August 31, 1995
----------- ----------- --------- ---------------
<S> <C> <C> <C> <C>
Revenue $18,229 $18,229 $22,063
Operating expenses:
Salaries and related charges 8,218 8,218 9,963
Supplies 3,451 3,451 3,457
Other Operating expenses 3,453 3,453 5,216
Depreciation 1,149 1,149 1,526
Amortization 494 25 519 585
------- ----- ------- -------
Operating income 1,464 (25) 1,439 1,316
Interest, net (458) (414) (872) (473)
Other, net (57) (57) 679
------- ----- ------- -------
Income before taxes and minority interests 949 (439) 510 1,522
Tax provision (416) 124 (185) (403)
65
41
------- ----- ------- -------
Income before minority interests 533 (209) 324 1,119
Minority interests in income (351) 140 (207) (315)
18
(8)
(5)
------- ----- ------- -------
Net income $182 $(69) $117 $804
======= ===== ======= =======
Weighted average common shares outstanding 22,449,099 24,304,860
Earnings per share of common stock $0.01 $0.03
</TABLE>
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THREE MONTHS ENDED AUGUST 31, 1995 COMPARED WITH THE THREE MONTHS ENDED AUGUST
31, 1994
Consolidated revenue denominated in US dollars increased to $22.1
million for the three months ended August 31, 1995 as compared to the similar
prior year period, representing an increase of $3.9 million or 21.4%. Excluding
the effect of the change in the US dollar exchange rate versus the Swiss franc
and the pound Sterling (approximately $2.6 million), and excluding revenue
generated by the newly-acquired Italian and Spanish operations ($1.3 million),
revenue generated by operations remained essentially stable. Revenue generated
by the Swiss operations remained stable, because of an increase in specimen
volume was offset by a decrease in revenue resulting from the sale of a
subsidiary in October 1994. Revenue generated by the UK operations increased by
a modest amount only because additional revenue resulting from the NHS contract
was offset by the loss of a significant client, the full effect of which was not
yet reflected in the three months ended August 31, 1994.
Operating income for the three months ended August 31, 1995 decreased
by $0.1 million versus the comparable prior year period. Excluding the effect of
the change in the US dollar exchange rate versus the Swiss franc and the pound
Sterling (approximately $0.2 million), and the effect of expenses incurred by
the newly-acquired Italian and Spanish operations ($1.3 million), this decrease
resulted primarily from an increase in operating costs related to the
strengthening of certain administrative functions while the overall level of
sales remained stable. The contribution to operating income by the Swiss
operations was higher than in the prior year comparable period, whereas the
contribution to operating income by the UK operations was lower.
Interest expense remained essentially stable during the three months
ended August 31, 1995 as compared to the similar prior year period, due to
higher average borrowings level by the Company resulting principally from the
Company's acquisition of the 40% minority interest in UGL, offset by an overall
decrease in interest rates.
Other income increased to $0.6 million, due primarily to exchange gains
realized on certain assets and liabilities as a result of fluctuations in
exchange rates.
Provision for income taxes remained stable as compared to the
comparable prior year period.
Minority interests in income remained stable as compared to the
comparable prior year period. This stability resulted from the increase in the
minority interest in income of certain subsidiary operations, and from the
decrease in the minority interest in income of UGL due to the acquisition of the
40% minority interest in UGL as of June 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for the three months ended
August 31, 1995 amounted to $5.6 million, an increase of $3.4 million from the
prior year primarily due to decreases in working capital needs.
Net cash used in financing activities for the three months ended August
31, 1995 was $1.5 million, as compared to net cash generated by financing
activities of $1.8 million in the comparable prior year period. The change
primarily resulted from repayment of bank borrowings.
14
<PAGE> 15
Net cash used in investing activities for the three months ended August
31, 1995 was $18.7 million, consisting primarily of capital expenditures
incurred in connection with new laboratory equipment, lending to group
companies, acquisition of treasury stock and the purchase of the 40% minority
interest in UGL as of June 30, 1995. This compares to $4.0 million used in
investing activities in the comparable prior year period, which had been used
for purchases of property and equipment and for lending to affiliates.
The Company's bank facilities provide for a total of approximately $38
million, including secured senior revolving facilities consisting of term loans,
working capital loans and/or guarantees. As of October 13, 1995, the Company had
approximately $4.1 million of availability under the aggregate credit
facilities. Cash on hand, cash flows from operations and additional borrowing
capabilities are expected to be sufficient to meet anticipated operating
requirements, debt repayments and provide funds for capital expenditures,
excluding acquisitions, and working capital for the foreseeable future.
OTHER
On June 30, 1995, the Company, UGL and Unilab entered into an agreement
whereby UGL acquired from Unilab 40% of UGL's common stock for a total
consideration of $30,000. The consideration was paid $13,000 in cash, $2,000
through the assumption of a debt from Unilab to JSP, and $15,000 in the form of
a one-year, interest-bearing promissory note. While the agreement provides that
if the note is still unpaid six months after its due date, Unilab has the right
to convert it into shares of the Company's common stock, the Company intends to
pay the note on or before its due date. In connection with this note, the
Company is considering raising additional capital through debt or equity
financing.
In July 1995, the Company issued 100,000 new shares of common stock to
one investor, at a price of $5.50 per share, including warrants for 50,000
shares at a price of $6.75 exercisable for 18 months from July 3, 1995.
In October, 1995, the Company issued 150,000 new shares of common stock
to two investors, at a price of $5.50 per share, including warrants for 75,000
shares at a price of $6.50 exercisable for 18 months from October 5, 1995.
15
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ARBITRATION
As described and discussed more thoroughly in the Company's Annual
Report on Form 10-K for the year ended May 31, 1995, the Company is entitled to
80% of the net recovery (less legal fees and costs) of any settlement or
successful resolution of the pending arbitration instituted by Americanino
Capital Corp. ("ACC") pursuant to an agreement by which the Company sold its
remaining interest in ACC.
In February 1993, ACC instituted the arbitration proceedings against
Mr. Eugenio Schiena, Mr. Raffaele Palma, Mr. Tonino Manzali, FIBRA S.p.A.,
GEFAPI S.p.A., "S.G.F." SOCIETE GENERALE COMMERCIALE ET FINANCIERE S.A., PARIBAS
FINANZIARIA S.p.A., BANQUE PARIBAS (Milan, Italy), and BANQUE PARIBAS (Paris,
France) (hereinafter collectively referred to as the "Defendants") for
misrepresentations and fraudulent conduct in the negotiation, consummation and
performance under an agreement by and between the abovementioned parties. The
arbitration is presently pending before an Arbitral Tribunal of three qualified
arbitrators (the "Arbitral Tribunal") under the auspices of the International
Court of Arbitration. A Draft of the Terms of Reference to be used in the
proceedings was established by the Arbitral Tribunal and communicated to the
respective parties on September 6, 1994. A hearing was held on November 9, 1994
to discuss and finalize the Draft Terms of Reference. As of November 9, 1994,
the Terms of Reference were sent to all the parties for signature with a
deadline date of February 15, 1995. Because certain Defendants did not sign
within the prescribed time limit, the International Court of Arbitration decided
on March 29, 1995, to approve the Terms of Reference, and to grant a time limit
of 15 days to these Defendants to sign such Terms, whereupon the proceedings
will go forward irrespective of who has signed the Terms of Reference. The
International Court of Arbitration further summoned all the Defendants to
effectuate payment within 30 days in the amount of $212,500 representing their
share of the advance costs. In the meantime, on February 24, 1995, the Arbitral
Tribunal fixed a deadline date of April 30, 1995 for the Claimant, ACC, to file
its brief on jurisdiction and on the merits of its claim; and fixed a deadline
date of July 31, 1995 for all the Defendants to file their briefs in reply. ACC
has filed its Brief with the International Court of Arbitration in compliance
with the deadline. In July 1995, the Company decided to open a bank guarantee in
favor of the International Court of Arbitration to cover the amount of $212,500
which the Defendants have failed to pay, in order for the proceedings to
continue. In July 1995, ACC was notified by the Panel that PARIBAS FINANZIARIA
S.p.A., BANQUE PARIBAS (Italy), and BANQUE PARIBAS (France) on one hand, and Mr.
MANZALI on the other hand, had each appointed new legal counsels, who requested
an extension of the July 31 reply deadline in order to be able to study the
files. The Panel agreed to such an extension. Accordingly, a new deadline date
of September 30, 1995 was set by the Panel for all the Defendants to file their
briefs in reply. To the Company's knowledge, all Defendants filed their briefs
in reply, with the exception of Messrs. Schiena and Palma, and of GEFAPI S.p.A.
The next step should be for ACC to file a further brief responding to the
replies. Such is expected to take place sometime before December 31, 1995.
The Company intends to monitor the proceedings. While, to the best of
the Company's knowledge, the Claimant appears to have a legitimate claim, there
can be no
16
<PAGE> 17
assurance that an award will be rendered in ACC's favor and thus benefit the
Company as provided under the terms of the ACC Sale Agreement. The Company
believes that any estimate of recovery is still subject to many factors beyond
the Company's control. Pending developments in the arbitration proceedings, and
in absence of other criteria, the management of the Company has recorded its
rights at a present fair market value of $10,000 which is estimated to be the
amount an unrelated party might presently pay to acquire all such rights arising
from the ACC Sale Agreement. Realization of any amount is entirely dependent
upon a favorable award from the Court and the collection thereof, if any, from
the Defendants. The Company's management will continuously monitor and report
the progress of the proceedings.
ITEM 5. OTHER ITEMS
PROPOSED RESTRUCTURING OF SUBSIDIARY RELATIONSHIP
The Company is presently considering restructuring its relationship
with UCT, in view of the various agreements now in existence with NDA. The
Company has determined that the best financial strategy for maximizing the
present and future value of the Company and its anticipated growth, is to effect
a spin-off of the clinical trials business conducted by UCT to the Company's
shareholders. The Company is now working on the details of such action,
including the legal and tax aspects of such a change upon the Company and its
shareholders.
PROPOSED OFFERING OF NEW SHARES UNDER REGULATION S
The Company is presently reviewing several alternatives to expand its
operations. In order to raise funds to enable the Company to consider such
actions, the Company is currently offering a maximum of 7.5 million newly-issued
shares of the Company in the Offshore Market to certain European investors
presently not affiliated with the Company. The shares are being offered in the
offshore market in accordance with Regulation S, which provides an exemption to
registration of the shares from the Securities Act of 1933, as amended.
ITEM 6. EXHIBITS
Exhibits included hereinafter are as follows:
Material Contracts: Stock Purchase Agreement, Option Agreement,
Registration Rights Agreement and UCT Option Agreement.
Press Release: UniHolding Corp. Announces Further Expansion Into
Clinical Trials Testing
17
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UniHolding Corp.
By: /s/ Bruno Adam by Melanie K. Stapp (poa)
----------------------------------------
Bruno Adam, CFO
By: Melanie K. Stapp by Power
of Attorney
Date: 10-17-95
------------
18
<PAGE> 19
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
10.1 Stock Purchase Agreement
10.2 Option Agreement
10.3 Registration Rights Agreement
10.4 UCT Option Agreement
27 Financial Data Schedule
99 Press Release: UniHolding Corp. Announces Further
Expansion Into Clinical Trials Testing
<PAGE> 1
Exhibit 10.1
- --------------------------------------------------------------------------------
NDA CLINICAL TRIAL SERVICES INC.
STOCK PURCHASE AGREEMENT
Dated as of September 27, 1995
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Section Page
ARTICLE I
THE SHARES
1.1. Issuance, Sale and Delivery of the Shares............................ 5
1.2. The Closing.......................................................... 5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Organization, Qualifications and Corporate Power................... 6
2.2. Authorization of Agreements, etc................................... 6
2.3. Validity........................................................... 7
2.4. Authorized Capital Stock........................................... 7
2.5. Financial Statements............................................... 8
2.6. Events Subsequent to the Date of the Balance Sheet................. 9
2.7. Litigation; Compliance with Law.................................... 9
2.8. Proprietary Information of Third Parties........................... 10
2.9. Title to Properties................................................ 10
2.10. Leasehold Interests................................................ 11
2.11. Insurance.......................................................... 11
2.12. Taxes.............................................................. 11
2.13. Other Agreements................................................... 12
2.14. Patents, Trademarks, etc........................................... 14
2.15. Loans and Advances................................................. 14
2.16. Assumptions, Guaranties, etc. of Indebtedness of Other Persons..... 15
2.17. Significant Customers and Suppliers................................ 15
2.18. Governmental Approvals............................................. 15
2.19. Disclosure......................................................... 15
2.20. Offering of the Shares............................................. 15
2.21. Brokers............................................................ 16
2.22. Officers........................................................... 16
2.23. Transactions With Affiliates....................................... 16
2.24. Employees.......................................................... 16
2.25 Updating........................................................... 17
<PAGE> 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF UNIHOLDING
3.1. UniHolding Representations................................ 17
ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF UNIHOLDING
4.1. UniHolding Closing Conditions............................. 17
ARTICLE IV-A
CONDITIONS TO THE OBLIGATIONS OF NDA
4A.1. NDA Closing Conditions.................................... 20
ARTICLE V
COVENANTS OF NDA
5.1. Financial Statements, Reports, etc........................ 21
5.2. Right of First Refusal.................................... 23
5.3. Corporate Existence....................................... 24
5.4. Properties, Business, Insurance........................... 24
5.5. Inspection, Consultation and Advice....................... 25
5.6. Restrictive Agreements Prohibited......................... 25
5.7. Transactions with Affiliates.............................. 25
5.8. Expenses of Directors..................................... 25
5.9. Use of Proceeds........................................... 25
5.10. Board of Directors Meetings............................... 26
5.11. Budget and Operating Forecast............................. 26
5.12. Compensation.............................................. 26
5.13. By-laws................................................... 26
5.14. Employee Agreements....................................... 26
5.15. Maintenance of Ownership of Susidiaries................... 27
5.16. Compliance with Laws...................................... 27
5.17. Keeping of Records and Books of Account................... 27
5.18. Obligations and Taxes..................................... 27
5.19. Indemnification........................................... 27
5.20. Corporate Actions......................................... 28
<PAGE> 4
ARTICLE VI
MISCELLANEOUS
6.1. Expenses.................................................. 29
6.2. Survival of Agreements.................................... 29
6.3. Brokerage................................................. 29
6.4. Parties in Interest....................................... 29
6.5. Notices................................................... 30
6.6. Governing Law............................................. 30
6.7. Entire Agreement.......................................... 30
6.8. Counterparts.............................................. 30
6.9. Amendments................................................ 31
6.10. Severability.............................................. 31
6.11. Titles and Subtitles...................................... 31
6.12. Certain Defined Terms..................................... 31
INDEX TO SCHEDULES
SCHEDULE 2.4 Security Holders
SCHEDULE 2.6 Events Subsequent
SCHEDULE 2.10 Leasehold Interests
SCHEDULE 2.13
(A) and (B) Material Agreements
SCHEDULE 2.14 Intellectual Property
SCHEDULE 2.15 Loans and Advances
SCHEDULE 2.22 Officers
SCHEDULE 2.23 Affiliate Transactions
SCHEDULE 5.9 Use of Proceeds
INDEX TO EXHIBITS
EXHIBIT A Registration Rights Agreement, as amended
EXHIBIT B Stockholders' Agreement, as amended
EXHIBIT C Charter Documents
EXHIBIT D Form of Employee Non-Disclosure, Non-Competition
and Inventions Agreement, together with Sales
Incentive Riders
<PAGE> 5
STOCK PURCHASE AGREEMENT dated as of September 27, 1995 between NDA
Clinical Trial Services Inc., a Delaware corporation, with its principal place
of business at 260 Smith Street, Farmingdale, New York 11735 ("NDA" or the
"Company") and UniHolding Corp., a Delaware corporation, with its principal
place of business at 96 Spring Street, New York, New York, 10012 ("UniHolding").
WHEREAS, the Company wishes to issue and sell to UniHolding (i) 8,932
shares ("Shares") of the authorized but unissued Class A Common Stock, $.01 par
value (the "Common Stock"), of the Company for a purchase price of $133.00 per
share (the "Purchase Price"); and (ii) the Option as defined in that certain
Option Agreement of even date herewith executed between the parties ("Option
Agreement"); and
WHEREAS, UniHolding wishes to (i) to purchase the Shares on the terms
and subject to the conditions set forth in this Agreement and (ii) to purchase
the Option on the terms and conditions set forth in the Option Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
ARTICLE I
THE SHARES
SECTION 1.1. Issuance, Sale and Delivery of the Shares. Subject to
the terms and conditions of this Agreement, at the Closing, NDA will issue and
sell to UniHolding, and UniHolding will purchase the Shares for the Purchase
Price.
SECTION 1.2. The Closing. The Closing ("Closing") shall take place at
the offices of Meltzer, Lippe, Goldstein, Wolf, Schlissel & Sazer, P.C., 190
Willis Avenue, Mineola, New York, 11501 on October 8, 1995 at 10:00 a.m. or at
such other time and date mutually agreeable to NDA and counsel to UniHolding,
but in no event later than October 15, 1995 ("Closing Date"). At the Closing,
NDA will deliver to UniHolding a certificate for the Shares being purchased by
UniHolding, registered in the name of UniHolding, against payment to NDA of the
Purchase Price, by wire transfer, check or other method acceptable to the
Company. It is understood and agreed that UniHolding will pay 10% of the
Purchase Price upon execution of this Agreement. If at the Closing any of the
conditions specified in Article IV shall not have been fulfilled, UniHolding
shall, at its election, be relieved of all of its obligations under this
Agreement, the Option Agreement and the UCT
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<PAGE> 6
Option Agreement (as hereinafter defined) without thereby waiving any other
rights it may have by reason of such failure or such non-fulfillment. If at the
Closing any of the conditions specified in Article IV-A shall not have been
fulfilled, NDA shall, at its election, be relieved of all of its obligations
under this Agreement, the Option Agreement and the UCT Option Agreement (as
hereinafter defined) without thereby waiving any other rights it may have by
reason of such failure or such non-fulfillment.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As of the execution of this Agreement and at the Closing Date, NDA
represents and warrants to UniHolding that, except as set forth in any Schedule
attached hereto:
SECTION 2.1. 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 this Agreement, the Registration
Rights Agreement dated December 15, 1994, as amended, in the form attached as
Exhibit A (the "Registration Rights Agreement"), the Stockholders' Agreement
dated December 15, 1994, as amended, in the form attached as Exhibit B (the
"Stockholders' Agreement") and the Option Agreement, and to issue, sell and
deliver the Shares.
(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.
SECTION 2.2. Authorization of Agreements, etc. (a) The execution and
delivery by NDA of this Agreement, the Option Agreement, the Registration
Rights Agreement and the Stockholders' Agreement, the performance by NDA of its
obligations hereunder and thereunder, and the issuance, sale and delivery of
the Shares and the Option 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
6
<PAGE> 7
Incorporation of NDA or the By-laws of NDA, as amended (the "Charter
Documents"), which are attached as Exhibit C, 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 secured any required waivers and consents from its
stockholders in connection with the execution and delivery by NDA of this
Agreement and the Option Agreement and the performance by NDA of its
obligations hereunder and thereunder, including but not limited to, the
delivery of all shares of Common Stock issuable to UniHolding under this
Agreement and the Option Agreement free of any preemptive rights of any
stockholders of NDA. Notwithstanding the foregoing, it is agreed and
acknowledged by NDA and UniHolding that the addition of a sixth director which
will be a nominee of UniHolding as provided in the Stockholders' Agreement (as
amended contemporaneously herewith) will require an amendment to NDA's
Certificate of Incorporation which will be effected by NDA within 30 days of
the Closing.
(c) The Shares have been duly authorized and, when issued in
accordance with this Agreement and the Charter Documents will be validly
issued, fully paid and nonassessable with no personal liability attaching to
the ownership thereof and will be free and clear of all liens, charges,
restrictions, claims and encumbrances except as set forth in the Stockholders
Agreement and the Registration Rights Agreement. The issuance, sale and
delivery of the Common Stock is 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. The shares of Common
Stock issuable pursuant to the Option will, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable, free of any preemptive right and
right of first refusal or any other lien or encumbrance.
SECTION 2.3. Validity. Each of the Agreement, the Option Agreement,
the Registration Rights Agreement and the Stockholders' Agreement 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.
SECTION 2.4. Authorized Capital Stock. The authorized capital stock of
NDA consists of 500,000 shares of Common Stock, of which 40,518 shares are
issued and outstanding and 50,000 shares of Class
7
<PAGE> 8
B Non-Voting common stock ("Class B Stock") of which 2,280 shares are issued
and outstanding. In addition, options to purchase 775 shares have been granted
and an additional 2,525 shares of Common Stock are reserved for issuance to
management employees of the Company, all pursuant to the Company's 1994
Stock Incentive Plan (the "Stock Option Plan"). 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 Common Stock and 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 2.4.
Except as set forth in the attached Schedule 2.4, Schedule 2.6, this Agreement
and the Option Agreement, (i) no person owns of record or is known to NDA to
own beneficially any shares of Common Stock or Class B Stock, (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 provided for in the Charter Documents or
as set forth in the attached Schedule 2.6, NDA 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 (i) the Stockholders' Agreement
and (ii) as set forth on Schedule 2.6 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.
SECTION 2.5. Financial Statements. NDA has furnished to UniHolding
the unaudited balance sheet of NDA as of December 31, 1993 and the audited
balance sheet of NDA as of December 31, 1994 and the related statements of
income, stockholders equity and cash flows of NDA for the years ended December
31, 1993 and 1994 (unaudited for 1993 and audited for 1994). NDA has also
furnished to UniHolding its interim unaudited income statement and balance
sheet for the six months ended June 30, 1995. 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 June 30,
1995 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
8
<PAGE> 9
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.
SECTION 2.6. Events Subsequent to the Date of the Balance Sheet.
Since the June 30, 1995 balance sheet, NDA has not (i) except as set forth in
the attached Schedule 2.6, 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 June 30, 1995 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 mark, copyright, trade secret or other
intangible assets, (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.
SECTION 2.7. 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
9
<PAGE> 10
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.
SECTION 2.8. 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 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 or delivery of this Agreement,
the Option Agreement, the Registration Rights Agreement and the Stockholders'
Agreement, 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.
10
<PAGE> 11
SECTION 2.9. Title to Properties. NDA has good and marketable title to
its properties and assets reflected on the June 30, 1995 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.
SECTION 2.10. Leasehold Interests. Except as set forth in Schedule
2.10, (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.
SECTION 2.11. Insurance. NDA holds valid policies covering all of the
insurance required to be maintained by it under Section 5.4.
SECTION 2.12. 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 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. NDA's net operating losses for Federal income tax purposes, as
set forth in the financial statements referred to in
11
<PAGE> 12
Section 2.5, are not subject to any limitations imposed by Section 382 of the
Code and the full amount of such net operating losses are 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.
SECTION 2.13. Other Agreements. Except as set forth in the attached
Schedule 2.13(A), NDA 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 NDA. Except as set forth in the
attached Schedule 2.13(b), Schedule 2.6 and Schedule 2.15, 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;
(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
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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;
(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;
(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 Registration Rights Agreement;
(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
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(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, and to the best of NDA's knowledge, each other party thereto 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 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.
SECTION 2.14. Patents, Trademarks, etc. Set forth in Schedule 2.14 is
a list and brief description of all patents, patent rights, patent
applications, trademarks, trademark applications, service marks, service mark
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 mark
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 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
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or proposed services of NDA, except to UniHolding and its related companies.
SECTION 2.15. Loans and Advances. Other than as set forth on Schedule
2.15, 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
anticipated to be incurred by them in connection with their performance or
services for NDA.
SECTION 2.16. 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.
SECTION 2.17. 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 2.5 or which has been significant to NDA
thereafter, has terminated, materially reduced or threatened to terminate or
materially reduce its purchases from or provisions of products or services to
NDA, as the case may be.
SECTION 2.18. Governmental Approvals. Subject to the accuracy of the
representations and warranties of UniHolding set forth in Article III, 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 NDA of this
Agreement, the Option Agreement, the Registration Rights Agreement or the
Stockholders' Agreement, the issuance, sale and delivery of the Shares, other
than (i) filings pursuant to state securities laws (all of which filings have
been made by NDA) in connection with the sale of the Shares and (ii) with
respect to the Registration Rights Agreement, the registration of the shares
covered thereby with the Commission and filings pursuant to state securities
laws.
SECTION 2.19. Disclosure. Neither this Agreement, nor any Schedule or
Exhibit to this Agreement, 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
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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 UniHolding 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.
SECTION 2.20. 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 Common
Stock under the Securities Act or the rules and regulations of the Commission
thereunder), in either case so as to subject the offering, issuance or sale of
the Shares to the registration provisions of the Securities Act.
SECTION 2.21. Brokers. NDA has no contract, arrangement or
understanding with any broker, finder or similar agent with respect to the
transactions contemplated by this Agreement.
SECTION 2.22. Officers. Set forth in Schedule 2.22 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 1995. 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.
SECTION 2.23. Transactions With Affiliates. Except as set forth in
Schedule 2.23, no director, officer, employee or stockholder of NDA, 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 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.
SECTION 2.24. 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 Developments Agreement substantially in the form of
Exhibit D (the "Non-Competition Agreement"), 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
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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.
SECTION 2.25. Updating. NDA agrees to update the representations and
schedules herein for any changes between the execution hereof and the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF UNIHOLDING
SECTION 3.1. UniHolding Representations. At the execution of this
Agreement and at the Closing Date, UniHolding represents and warrants to NDA
that:
(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 Shares;
(b) it has sufficient knowledge and experience in investing in
companies similar to NDA in terms of NDA's stage of development so as to be
able to evaluate the risks and merits of its investment in NDA and it is able
financially to bear the risks thereof;
(c) it has had an opportunity to discuss NDA's business, management
and financial affairs with NDA's management;
(d) the Shares being purchased by it are being acquired for its own
account for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof;
(e) it understands that (i) the Shares have not been registered under
the Securities Act by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof promulgated under the Securities Act, (ii) the Shares must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration, (iii) the Shares will bear
a legend to such effect and (iv) NDA will make a notation on its transfer books
to such effect.
(f) it has made its own decision to purchase the Shares and has not
relied on the decision of any other stockholder of the Company to purchase the
Shares in making its investment.
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ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF UNIHOLDING
SECTION 4.1. UniHolding Closing Conditions. The obligation of
UniHolding to purchase and pay for the Shares and the Option is, at its option,
subject to the satisfaction, on or before the Closing Date, of the following
conditions:
(a) Opinion of Company's Counsel. UniHolding shall have received from
counsel for NDA, an opinion dated the Closing Date in form and scope
satisfactory to UniHolding and its counsel, in the form attached hereto as
Schedule 4.1(a).
(b) Representations and Warranties to be True and Correct. The
representations and warranties contained in Article II shall be true, complete
and correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, and the
President and Chief Executive Officer of NDA shall have certified to such
effect to UniHolding in writing.
(c) Performance. NDA shall have performed and complied with all
agreements contained herein required to be performed or complied with by it
prior to or at the Closing Date and the President and Chief Executive Officer
of NDA shall have certified to UniHolding in writing to such effect and to the
further effect that all of the conditions set forth in this Article IV have
been satisfied.
(d) All Proceedings to be 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 UniHolding and its counsel, and UniHolding and its counsel shall
have received all such counterpart originals or certified or other copies of
such documents as they reasonably may request.
(e) Supporting Documents. UniHolding and its counsel shall have
received copies of the following documents:
(i) (A) NDA's Certificate of Incorporation, certified as of a
recent date by the Secretary of State of Delaware and (B) a certificate
of the Secretary of State of the State of Delaware dated as of a recent
date as to the due incorporation and good standing of NDA, the payment
of all excise taxes by NDA and listing all documents of NDA on file
with said Secretary;
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(ii) a certificate of the Secretary or an Assistant Secretary
of NDA dated the Closing Date and certifying: (A) that attached thereto
is a true and complete copy of the By-laws of NDA as in effect on the
date of such certification; (B) that attached thereto is a true and
complete copy of all resolutions adopted by the Board of Directors or
the stockholders of NDA authorizing the execution, delivery and
performance of this Agreement, the Option Agreement, the Registration
Rights Agreement and the Stockholders' Agreement, the issuance, sale and
delivery of the Shares, and that all such resolutions are in full force
and effect and are all the resolutions adopted in connection with the
transactions contemplated by this Agreement, the Registration Rights
Agreement and the Stockholders, Agreement; (C) that NDA's Certificate of
Incorporation attached hereto as Exhibit C is in full force and effect
and has not been amended; (D) no default, or occurrence or omission
which, with notice or the passage of time or both, would result in an
event of default under any agreement to which NDA is a party, shall have
occurred or will occur as a result of the sale of Shares; and (E) to
the incumbency and specimen signature of each officer of NDA executing
this Agreement, the Option Agreement, the Registration Rights Agreement,
the Stockholders' Agreement and the stock certificates representing the
Shares and a certification by another officer of NDA as to the
incumbency and signature of the officer signing the certificate referred
to in this clause (ii); and
(iii) such additional supporting documents and other
information with respect to the operations and affairs of NDA as
UniHolding or its counsel reasonably may request.
(f) Registration Rights Agreement. NDA shall have executed and
delivered the Registration Rights Agreement.
(g) Stockholders' Agreement. The Stockholders' Agreement shall have
been executed and delivered by NDA.
(h) Option Agreement. The Option Agreement shall have been executed
and delivered by NDA.
(i) Election of Directors. The current Board of Directors shall have
resolved that the number of directors constituting the entire Board of
Directors of NDA shall have been increased to six; further the current Board of
Directors shall have resolved to effect an amendment to the Certificate of
Incorporation within 30
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days thereof providing for such increase to six Directors and the current Board
shall have resolved to elect UniHolding's nominee for its Director pursuant to
the terms of the Stockholders' Agreement, as amended contemporaneously herewith
within 30 days thereof; and provided that as a further condition of Closing
that David Deutsch, Ronald Gambardella, Poly Ventures II, Limited Partnership
and the Long Island Venture Fund, in their respective capacities as NDA
stockholders, shall have consent to such amendment to the Certificate of
Incorporation. NDA acknowledges that, subject to the terms of the Stockholders'
Agreement, as amended contemporaneously herewith, Long Island Venture Fund,
L.P., Poly Ventures II, Limited Partnership and UniHolding shall each be
entitled to have one nominee as a member of NDA's Board of Directors.
(j) Compensation Committee. The Board of Directors shall have
appointed a Compensation Committee consisting of one representative designated
by Poly Ventures II, Limited Partnership and one member from management, which
shall consider and recommend to the Board of Directors compensation for NDA's
officers and directors and the participation of employees in NDA's Stock Option
Plan. In the event the Compensation Committee is "dead-locked" and unable to
reach agreement on any particular matter or issue, then the members of the
Compensation Committee will use reasonable efforts to resolve all such
disputes, but if a final resolution is not obtained within five (5) days after
the date the particular issue is first addressed by the Compensation Committee,
then any remaining disputes will be submitted to a third party, which party
shall be mutually agreed to by both members of the Compensation Committee and
shall not be an affiliate of any UniHolding or NDA, and whose decision with
respect to such disputes shall be final, conclusive and binding on the
parties. If the members of the Compensation Committee cannot agree on a third
party to resolve a dispute, then such dispute will be submitted to, and
resolved exclusively pursuant to arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association (with such
arbitration to take place in Nassau County, New York and shall be subject to
the substantive law of the State of New York, except where by its terms the
General Corporation Law of Delaware applies). Decisions pursuant to such
arbitration shall be final, conclusive and binding on the parties.
(k) Preemptive Rights. All stockholders of NDA having any preemptive,
first refusal or other rights with respect to the issuance of the Shares and
the shares of Common Stock issuable pursuant to the Option shall have
irrevocably waived the same in writing.
(l) Key Person Insurance. NDA shall use its best efforts to maintain
a term life insurance policy in the face amount of $1
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million for each of David Deutsch and Ronald Gambardella and $500,000 for
Jeffrey Prisco, in each case, naming NDA as sole beneficiary.
All such documents and arrangements shall be satisfactory in form and substance
to UniHolding and its counsel.
ARTICLE IV-A
CONDITIONS TO THE OBLIGATIONS OF NDA
SECTION 4A.1. NDA Closing Conditions. The obligation of NDA to issue
the Shares and the Option is subject to the satisfaction of the following
conditions, on or before the Closing Date:
(a) that the UCT Option Agreement, of even date herewith, shall have
been signed by UCT and UniHolding and shall have been delivered to NDA;
(b) that the President or Chief Executive Officer of UniHolding shall
have certified at and as of the Closing Date as follows:
(i) UniHolding is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware;
(ii) that it has requisite corporate authority to enter into
this Agreement and the Option Agreement and perform the transactions
contemplated hereunder and thereunder and such actions will not violate
any provision of law or any governmental order, decree or judgment to
which it is bound; and
(iii) that neither the execution of this Agreement or the
Option Agreement, or the performances contemplated herein or therein,
conflict with, or result in a breach of or constitute a default under
any agreement to which UniHolding or its properties or assets are bound.
(iv) that all of UniHolding's representations and warranties
shall be true and correct as at the Closing Date.
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ARTICLE V
COVENANTS OF NDA
NDA covenants and agrees with UniHolding that:
SECTION 5.1. Financial Statements, Reports, etc. NDA shall furnish to
UniHolding the following:
(a) within ninety (90) days after the end of each fiscal year of NDA a
balance sheet of NDA as of the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and cash flows for the
fiscal year then ended, prepared in accordance with generally accepted
accounting principles and certified by a "big six" firm of independent public
accountants of recognized national standing selected by the Board of Directors
of NDA;
(b) within forty-five (45) days after the end of each fiscal quarter
in each fiscal year (other than the last fiscal quarter in each fiscal year) a
balance sheet of NDA and the related statements of income, stockholders' equity
and cash flows, unaudited but prepared in accordance with generally accepted
accounting principles and certified by the Chief Financial Officer of NDA, such
consolidated balance sheet to be as of the end of such fiscal quarter and such
statements of income, stockholders' equity and cash flows to be for such fiscal
quarter and for the period from the beginning of the fiscal year to the end of
such fiscal quarter, in each case with comparative statements for the
corresponding period in the prior fiscal year;
(c) within thirty (30) days after the end of each month in each fiscal
year (other than the last month in each fiscal year) a balance sheet of NDA and
its subsidiaries (if any) and the related statements of income, stockholders'
equity and cash flows, unaudited but prepared in accordance with generally
accepted accounting principles and certified by the Chief Financial Officer of
NDA, such consolidated balance sheet to be as of the end of such month and such
consolidated statements of income, stockholders' equity and cash flows to be
for such month and for the period from the beginning of the fiscal year to the
end of such month, in each case with comparative statements for the prior
fiscal year; provided that NDA's obligations under this Section 5.1(c) shall
terminate and be of no further force or effect upon the closing of a firm
commitment underwritten public offering of NDA's securities that qualifies as a
Designated Offering;
(d) at the time of delivery of each annual financial statement
pursuant to Section 5.1(a), a certificate executed by the Chief Financial
Officer of NDA stating that such officer has caused
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this Agreement to be reviewed and has no knowledge of any default by NDA in the
performance or observance of any of the provisions of this Agreement or, if
such officer has such knowledge, specifying such default and the nature thereof;
(e) at the time of delivery of each monthly statement pursuant to
Section 5.1(c), a management narrative report explaining all significant
variances from forecasts and all significant current developments in staffing,
marketing, sales and operations;
(f) promptly following receipt by NDA, each audit response letter,
accountant's management letter and other written report submitted to NDA by its
independent public accountants in connection with an annual or interim audit of
the books of NDA;
(g) promptly after the commencement thereof, notice of all actions,
suits, claims, proceedings, investigations and inquiries of the type described
in Section 2.7 that could materially adversely affect NDA;
(h) promptly upon sending, making available or filing the same, all
press releases, reports and financial statements that NDA sends or makes
available to its stockholders or directors or files with the Commission; and
(i) promptly, from time to time, such other information regarding the
business, prospects, financial condition, operations, property or affairs of
NDA and its subsidiaries as UniHolding reasonably may request.
SECTION 5.2. Right of First Refusal. AS long as any shares of Common
Stock are outstanding, NDA shall, prior to any issuance by NDA of any of its
securities (other than debt securities with no equity feature), offer to each
person or entity set forth on Schedule 5.2 hereof (a "Holder") by written notice
the right, for a period of thirty (30) days, to purchase on a pro rata basis a
number of such securities as will enable such Holder to maintain, on a fully
diluted basis, the percentage of ownership of NDA such Holder has at the time of
such proposed issuance, for cash at an amount equal to the price or other
consideration for which such securities are to be issued; provided, however,
that the first refusal rights pursuant to this Section 5.2 shall not apply to
securities issued, (A) as a stock dividend or upon any subdivision of shares of
Common Stock, provided that the securities issued pursuant to such stock
dividend or subdivision are limited to additional shares of Common Stock, (B)
pursuant to subscriptions, warrants, options, convertible securities, or other
rights which are listed in Schedule 2.4 as being outstanding on the Closing Date
are listed in Schedule 2.4 as being outstanding on the Closing Date, (C) solely
in consideration for the acquisition (whether by
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merger or otherwise) by NDA or any of its subsidiaries of all or substantially
all of the stock or assets of any other entity, (D) pursuant to a firm
commitment underwritten public offering of NDA's securities that qualifies as a
Designated Offering, and (E) pursuant to the exercise of options to purchase
Common Stock granted to employees of NDA, not to exceed in the aggregate 3,300
shares, appropriately adjusted to reflect stock splits, stock dividends,
combinations of shares and the like with respect to the Common Stock less the
number of shares (as so adjusted) issued pursuant to options outstanding on the
date of this Agreement and listed in Schedule 2.4 pursuant to clause (B) above
(the shares exempted by this clause (E) being hereinafter referred to as the
"Reserved Employee Shares"). NDA's written notice to the Holders shall
describe the securities proposed to be issued by NDA and specify the number,
price and payment terms. Each Holder may accept NDA's offer as to the full
number of securities offered to it or any lesser number, by written notice
thereof given by it to NDA prior to the expiration of the aforesaid thirty (30)
day period, in which event the Company shall promptly sell and such Holder
shall purchase, upon the terms specified, the number of securities agreed to
be purchased by such Holder. Notwithstanding the foregoing, if the Holders
agree, in the aggregate, to purchase more than the full number of securities
offered by the Company, then each Holder accepting NDA's offer shall first be
allocated the lesser of (i) the number of securities which such Holder agreed
to purchase and (ii) the number of securities as is equal to the full number
of securities offered by NDA multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock held by such Holder as of the
date of NDA's notice of offer and the denominator of which shall be the
aggregate number of shares of Common Stock (calculated as aforesaid) held on
such date by all Holders who accepted NDA's offer, and the balance of the
securities (if any) offered by NDA shall be allocated among the Holders
accepting NDA's offer in proportion to their relative equity ownership
interests in NDA (calculated as aforesaid); provided, that no Holder shall be
allocated more than the number of securities which such Holder agreed to
purchase; and provided, further, that in cases covered by this sentence, all
Holders shall be allocated among them the full number of securities offered
by NDA.
NDA shall be free at any time prior to ninety (90) days after the date
of its notice of offer to the Holders, to offer and sell to any third party or
parties the number of such securities not agreed by the Holders to be purchased
by them, at a price and on payment terms no less favorable to NDA than those
specified in such notice of offer to the Holders. However, if such third party
sale or sales are not consummated within such ninety (90) day period, NDA shall
not sell such securities as shall not have been purchased within such period
without again complying with this Section 5.2.
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Notwithstanding the foregoing, the terms and conditions of this Section
5.2 shall terminate and be of no further force or effect upon the closing of a
firm commitment underwritten public offering of NDA's securities that qualifies
as a Designated Offering.
SECTION 5.3. Corporate Existence. NDA shall maintain and cause each
of its subsidiaries to maintain their respective corporate existence, rights
and franchises in full force and effect.
SECTION 5.4 Properties, Business, Insurance. NDA shall maintain and
cause each of its subsidiaries to maintain as to their respective properties
and business, with financially sound and reputable insurers, insurance against
such casualties and contingencies and of such types and in such amounts as is
customary for companies similarly situated, including but not limited to fire
and other risks insured against by extended coverage, product liability
insurance and public liability insurance against claims for personal injury or
death or property damage occurring upon, in , about or in connection with the
use of any properties owned, occupied or controlled by NDA, which insurance
shall be deemed by NDA to be sufficient; and maintain workers' compensation
insurance and such other insurance as may be required by law. For so long as
its Board of Directors determines it to be desirable, NDA shall maintain in
effect "key person" life insurance policies, payable to NDA, as set forth in
Section 4.1(n). NDA shall not cause or permit any assignment or change in
beneficiary and shall not borrow against any such policy.
SECTION 5.5 Inspection, Consultation and Advice. NDA shall permit and
cause each of its subsidiaries to permit designated representatives of
UniHolding at the expense of UniHolding, to visit and inspect any of the
properties of NDA and its subsidiaries, examine their books and take copies and
extracts therefrom, discuss the affairs, finances and accounts of NDA and its
subsidiaries with their officers, employees and public accountants (and NDA
hereby authorizes said accountants to discuss with UniHolding and such
designees such affairs, finances and accounts), and consult with and advise the
management of NDA and its subsidiaries as to their affairs, finances and
accounts, all at reasonable times and upon reasonable notice.
SECTION 5.6 Restrictive Agreements Prohibited. Neither NDA nor any of
its subsidiaries shall become a party to any agreement which by its terms
restricts NDA's performance of this Agreement, the Option Agreement, the
Registration Rights Agreement, the Stockholders Agreement or NDA's Certificate
of Incorporation.
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SECTION 5.7. Transactions with Affiliates. Except for transactions
contemplated by this Agreement or as otherwise specifically approved by
UniHolding, neither NDA nor any of its subsidiaries shall enter into any
transaction with any director, officer, employee or holder of more than 5% of
the outstanding capital stock of any class or series of capital stock of NDA or
any of its subsidiaries, member of the family of any such person, or any
corporation, partnership, trust or other entity in which any such person, or
member of the family of any such person, is a director, officer, trustee,
partner or holder of more than 5% of the outstanding capital stock thereof
(each an "Affiliate"), except for transactions on customary terms related to
such person's employment with NDA.
SECTION 5.8. Expenses of Directors. NDA shall promptly reimburse in
full each director of NDA who is not an employee of NDA for all of his or her
reasonable out-of-pocket expenses incurred in attending each meeting of the
Board of Directors of NDA or any Committee thereof.
SECTION 5.9. Use of Proceeds. NDA shall use the proceeds from the sale
of the Shares solely for such uses as set forth in the attached Schedule 5.9.
SECTION 5.10. Board of Directors Meetings. NDA shall use its best
efforts to ensure that meetings of its Board of Directors are held at least
four times each year and at least once each quarter.
SECTION 5.11. Budget and Operating Forecast. For each fiscal year of
NDA commencing with the fiscal year of NDA beginning on January 1, 1996, at
least 30 days prior to the last day of the prior fiscal year, management of NDA
will prepare and submit to the Board of Directors of NDA, annual consolidated
operating and capital budgets, cash flow projections and income and loss
projections in respect of such fiscal year, with monthly breakdowns in
reasonable detail prepared by management and approved by the President and
Chief Financial Officer of NDA, and, promptly after preparation, provide any
revisions to any of the foregoing (the "Budget"). The Budget shall be accepted
as the Budget for such fiscal year when it has been approved by the Board of
Directors of NDA. The Budget shall be reviewed by NDA periodically and all
changes therein and all material deviations therefrom shall be resubmitted to
the Board of Directors of NDA in advance and shall be accepted when approved by
the Board of Directors of NDA, and NDA shall not make any such changes or
material deviations to or from the Budget without such prior approval of the
Board of Directors of NDA.
SECTION 5.12. Compensation. NDA shall not pay to its management
compensation in excess of that compensation customarily
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paid to management in companies of similar size, of similar maturity, and in
similar businesses.
SECTION 5.13. By-laws. NDA shall at all times cause its By-laws to
provide that, (a) unless otherwise required by the laws of the State of
Delaware, (i) any two directors and (ii) any holder or holders of at least 20%
of the outstanding shares of Common Stock shall have the right to call a
meeting of the Board of Directors or stockholders, and (b) the number of
directors fixed in accordance therewith shall in no event conflict with any of
the terms or provisions of the Stockholders' Agreement. NDA shall at all times
maintain provisions in its By-laws and/or Certificate of Incorporation
indemnifying all directors against liability and absolving all directors from
liability to NDA and its stockholders to the maximum extent permitted under the
laws of the State of Delaware, or, if there is a reduction in the permitted
scope of indemnification under Delaware law, at the level existing prior to
such reduction for any actions occurring before such reduction.
SECTION 5.14. Employee Agreements. NDA shall obtain, and shall cause
its subsidiaries to use their best efforts to obtain, an Employee Agreement
from all future officers, key employees and other employees who will have
access to confidential information of NDA, upon their employment by NDA.
SECTION 5.15. Maintenance of Ownership of Subsidiaries. NDA shall not
sell or otherwise transfer any shares of capital stock of any Subsidiary,
except to NDA or another Subsidiary, or permit any Subsidiary to issue, sell or
otherwise transfer any shares of its capital stock or the capital stock of any
Subsidiary, except to NDA or another Subsidiary.
SECTION 5.16. Compliance with Laws. NDA shall comply, and cause each
Subsidiary to comply, with all applicable laws, rules, regulations and orders,
noncompliance with which could materially adversely affect its business or
condition, financial or otherwise.
SECTION 5.17. Keeping of Records and Books of Account. NDA shall
keep, and cause each Subsidiary to keep, adequate records and books of account,
in which complete entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all financial
transactions of NDA and such Subsidiary, and in which, for each fiscal year, all
proper reserves for depreciation, depletion, obsolescence, amortization, taxes,
bad debts and other purposes in connection with its business shall be made.
SECTION 5.18. Obligations and Taxes. NDA shall pay all of its
indebtedness and obligations promptly and in accordance with their terms and
pay and discharge promptly all taxes, assessments
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<PAGE> 28
and governmental charges or levies imposed upon it or its income or profits or
in respect of its property, before the same shall become in default, as well as
all lawful claims for labor and supplies or otherwise which, if unpaid, might
become a lien or charge upon such properties or any part thereof; provided
however, that NDA shall not be required to pay and discharge or to cause to be
paid and discharged any tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and NDA shall set aside on its books such reserves as are required
by generally accepted accounting principles with respect to any such tax,
assessment, charge, levy or claim so contested.
SECTION 5.19. Indemnification. NDA shall, with respect to the
representations and warranties made by NDA herein, indemnify, defend and hold
UniHolding harmless against all liability, loss or damage, together with all
reasonable costs and expenses related thereto (including legal and accounting
fees and expenses) (collectively, "Damages"), arising from the untruth,
inaccuracy or breach of any such representations, and warranties of NDA;
provided however, that UniHolding shall only be entitled to indemnification
hereunder if the aggregate of all Damages exceeds $50,000; provided further,
that if the aggregate of all Damages exceeds $50,000, UniHolding shall be
entitled to indemnification for all Damages beginning with the first dollar of
Damages suffered or incurred.
SECTION 5.20. Corporate Actions. Prior to a Designated Offering, NDA
will not take any of the following actions without the prior affirmative vote
of at least four directors, which vote shall not be unreasonably withheld or
unduly delayed;
(a) Authorize or issue shares of any class or series of equity
security or of any securities convertible into any class or series of equity
securities, except for grants of Common Stock pursuant to the Stock Option
Plan.
(b) Merge or consolidate into or with any other corporation or sell
all of substantially all of NDA's assets, or sell pledge, license or otherwise
dispose of assets (tangible or intangible) of NDA for consideration of more
than $100,000 (other than licenses granted or assets sold in the ordinary
course of business).
(c) Redeem, repurchase, retire or otherwise acquire any shares of
equity securities, except as contemplated by this Agreement or the
Stockholders' Agreement.
(d) Pay or declare any dividend or distribution on any shares of NDA's
capital stock.
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<PAGE> 29
(e) Voluntarily liquidate, dissolve or wind up NDA or conduct any form
of recapitalization or reorganization of NDA.
(f) Incur any obligation, involving payments or consideration of more
than $100,000 per year, except for short term borrowing for working capital or
borrowings to fund parts, materials, and labor costs to fill purchase orders.
(g) Sell any equity or debt securities in NDA's present or future
subsidiaries to third parties.
(h) Amend or repeal any provision of, or add any provision to, NDA's
Certificate of Incorporation or NDA's by-laws.
(i) Adopt any fundamental change to NDA's business, i.e. changes which
would result in more than 25% of NDA's assets being deployed in, or gross
revenues derived from, businesses other than clinical laboratories or blood
testing.
(j) Acquire any capital asset for more than $100,000 and or make any
investment in or acquire another business entity.
(k) Enter into any transaction with an Affiliate, except for
transactions on customary terms related to such person's employment with NDA.
(l) Make any investment in or acquire any other business entity.
(m) Sell or transfer any intangible property other than licenses
granted in the ordinary course of business.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby whether or not such
transactions shall be consummated.
SECTION 6.2. Survival of Agreements. All covenants, agreements,
representations and warranties made herein or in the Registration Rights
Agreement, the Stockholders' Agreement, or any certificate or instrument
delivered to UniHolding pursuant to or in connection with this Agreement, the
Registration Rights Agreement or the Stockholders' Agreement, shall survive the
execution and delivery of this Agreement, the Registration Rights Agreement,
the Stockholders' Agreement and the issuance, sale and delivery of the Shares
for a period of three (3) years from the date of this
29
<PAGE> 30
Agreement. All statements contained in any certificate or other instrument
delivered by NDA hereunder or thereunder or in connection herewith or therewith
shall be deemed to constitute representations and warranties made by NDA.
SECTION 6.3. Brokerage. Each party hereto will indemnify and hold
harmless the other party against and in respect of any claim for brokerage or
other commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
SECTION 6.4. Parties in Interest. All representations, covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. Without limiting
the generality of the foregoing, all representations, covenants and agreements
benefiting UniHolding shall inure to the benefit of any and all subsequent
holders from time to time of UniHolding's shares of Common Stock.
SECTION 6.5. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person
or mailed by certified or registered mail, return receipt requested, or telexed
in the case of non-U.S. residents, addressed as follows:
(a) if to NDA, at NDA Clinical Trial Services, Inc., 260 Smith
Street, Farmingdale, NY 11735, Attention: President, with a copy to
David I. Schaffer, Meltzer, Lippe, Goldstein, Wolf, Schlissel & Sazer,
P.C., 190 Willis Avenue, Mineola, NY 11501; and
(b) if to UniHolding, at the address set forth opposite its
name, with a copy to Mr. Paul Hoekfelt, Chief Operating Officer,
UniHolding Corp., 12, place de Cornavin, CH 1211 Geneva, Switzerland;
or, if any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
SECTION 6.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of New
York, except where by its terms the General Corporation Law of Delaware
applies, regardless of the jurisdiction of creation or domicile of NDA or its
successors or of UniHolding or its successors (without giving effect to the
choice of law principles of such State). Each party hereby consents to the
exclusive jurisdiction of the State and Federal courts in the State
30
<PAGE> 31
of New York in connection with any action arising out of the matters covered
hereby and any litigation commenced by any party arising from the transactions
provided for hereby or relating hereto shall only be commenced in such courts.
Notwithstanding the foregoing, NDA agrees that if Uniholding brings suit, and
its principal place of business has moved to another location in the United
States, NDA will consent to jurisdiction in the Federal and State Courts of the
location in that state that is then Uniholding's principal place of business.
Each party hereby irrevocably submits to the personal jurisdiction of the
above courts, irrevocably agrees not to interpose any defenses based on lack of
personal jurisdiction or forum non conveniens, and irrevocably agrees to
service of any process in connection with this agreement by certified or
registered mail, in addition to any other service permitted by law.
SECTION 6.7. Entire Agreement. This Agreement, including the
Schedules and Exhibits hereto, constitutes the sole and entire agreement of the
parties with respect to the subject matter hereof. All Schedules and Exhibits
hereto are hereby incorporated herein by reference.
SECTION 6.8. 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.
SECTION 6.9. Amendments. This Agreement may not be amended or
modified, and no provisions hereof may be waived, without the written consent
of NDA and UniHolding.
SECTION 6.10. Severability. If any provision of this Agreement shall
be declared void or unenforceable by any judicial or administrative authority,
the validity of any other provision and of the entire Agreement shall not be
affected thereby.
SECTION 6.11. Titles and Subtitles. The titles and subtitles used in
this Agreement are for convenience only and are not to be considered in
construing or interpreting any term or provision of this Agreement.
SECTION 6.12. 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 securities of NDA in an aggregate amount in excess of $5,000,000 at
a per share price at least equal to $364.05 per share, as adjusted for stock
splits, combinations and other
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<PAGE> 32
recapitalizations; provided, that immediately following the consummation of such
offering, NDA's shares are listed on a national stock exchange, the National
Association of Securities Dealers Automated Quotation National Market or the
National Association of Securities Dealers Automated Quotation SmallCap 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.
(c) "Subsidiary" shall mean, as to NDA and in connection with any
Subsidiary NDA may own subsequent to the date of this Agreement, any
corporation of which more than 50% of the outstanding stock having ordinary
voting power to elect a majority of the Board of Directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned by
NDA, or by one or more of its Subsidiaries, or by NDA and one or more of its
Subsidiaries.
SECTION 6.13. Assignment. This Agreement may not be assigned by
either party without the consent of the other. It is understood and agreed that
UniHolding may not, without NDA's prior written consent, under any
circumstances transfer its shares in NDA to a competitor of NDA.
IN WITNESS WHEREOF, NDA and UniHolding have executed this Stock
Purchase Agreement as of the day and year first above written.
NDA CLINICAL TRIAL
SERVICES INC.
By: /s/ David Deutsch
-----------------------------------
Name: David Deutsch
Title: CEO
[Corporate Seal]
Attest:
/s/ David Deutsch
- ---------------------------------------
Secretary
UNIHOLDING CORP.
By: /s/ Melanie Stapp
-----------------------------------
Name: Melanie Stapp
Title: Executive Secretary
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<PAGE> 33
SCHEDULE 2.4
Stockholders of Record
David Deutsch 8,261 shares of Class A Voting Common Stock
Ronald Gambardella 5,572 shares of Class A Voting Common Stock
Poly Ventures II,
Limited Partnership 9,874 shares of Class A Voting Common Stock
Cain Brothers & Company,
Incorporated 741 shares of Class A Voting Common Stock
Jeffrey Prisco 3,686 shares of Class A Voting Common Stock*
Ronald Gambardella Right to acquire from David Deutsch that number of
shares of Class A Voting Common Stock as will
restore the ratio of ownership by Deutsch and
Gambardella to 50:50 exercisable by February 1, 1996
by a cash payment to Deutsch of $75,000. (For this
purpose, David Deutsch's shares include those of
Brian and Derek Deutsch.)
Michael DiMarco 760 shares of Class B Non-Voting Common Stock
James Wagner 760 shares of Class B Non-Voting Common Stock
Janet Gambardella 760 shares of Class B Non-Voting Common Stock
Derek Deutsch 870 shares of Class A Voting Common Stock
Brian Deutsch 870 shares of Class A Voting Common Stock
Sanford Krieger 103 shares of Class A Voting Common Stock
Mark Markbreiter 822 shares of Class A Voting Common Stock
Robert Raucci 411 shares of Class A Voting Common Stock
Gail Schneider 205 shares of Class A Voting Common Stock
Melvin Novatt 205 shares of Class A Voting Common Stock
Davstar II 411 shares of Class A Voting Common Stock
- ---------------
* John Reinert and Jeffrey Prisco acknowledge that John Reinert has a
beneficial interest in 50% of Mr. Prisco's shares pursuant to an agreement
between them.
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<PAGE> 34
Steven Berman 164 shares of Class A Voting Common Stock
Arthur Fein 102 shares of Class A Voting Common Stock
Long Island Venture
Fund, L.P. 4,114 shares of Class A Voting Common Stock
Lawrence Karlin 102 shares of Class A Voting Common Stock
Dr. Merrill Goodman 205 shares of Class A Voting Common Stock
Devra Lee Davis and
Richard D. Morgenstern 205 shares of Class A Voting Common Stock
Eric Joss 102 shares of Class A Voting Common Stock
NYS Science &
Technology Foundation 2,057 shares of Class A Voting Common Stock
Peter Joseph 822 shares of Class A Voting Common Stock
Mark Schwartz 205 shares of Class A Voting Common Stock
Robert Weiner 102 shares of Class A Voting Common Stock
Steven Disman 205 shares of Class A Voting Common Stock
Stanley Asnis 102 shares of Class A Voting Common Stock
The Company has cancelled a previous issuance of 760 Class B shares to
Christopher Szustkiewicz as a result of the Company's position that due to
certain violation of Mr. Szustkiewicz's agreement with the Company, such shares
were forfeited.
SCHEDULE 2.6
Stock Purchase Agreement, Stockholders' Agreement and Registration Rights
Agreement dated December 15, 1994 by and among NDA, Poly Ventures II, L.P. and
the Purchasers or Stockholders, as the case may be, named therein.
Stock Purchase Agreement dated August 1, 1994 between NDA and Poly
Ventures II, L.P.
Cooperation Agreement, License Agreement and Marketing Agreement between NDA
and UniHolding Corp. dated March 1, 1995.
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<PAGE> 35
Warrant for 369 shares to Poly Ventures II, L.P.
Warrant for 185 shares to Long Island Venture Fund.
SCHEDULE 2.10
LEASEHOLD INTERESTS
The Company leases its premises at 260 Smith Street, Farmingdale, New
York, pursuant to a Lease dated August 1, 1994 (the "Lease") between the
Company and NDA Properties, Inc. ("Landlord"). The principals of Landlord
include Ronald Gambardella and Janet Gambardella.
The Lease by its terms is subordinate to any mortgage which may be in
force with respect to the building in which the leased premises are located,
including the mortgage currently outstanding. Landlord is obliged under the
Lease to use its best efforts to obtain a non-disturbance agreement from the
mortgagee for the benefit of the Company. Pursuant to an agreement which has
not yet been reduced to a definitive writing between the Landlord, Ronald and
Janet Gambardella, the current mortgage holders and NDA, NDA will lease the
entire 25,000 sq. ft. building (currently only 12,500 sq. ft. is leased) for an
additional 10-year period and will not be disturbed in its tenancy. The
mortgage holder may demand, and receive, title to the building which NDA leases
at any time. The lease payments will be $15,000 per month in the first year
escalating by year 10 to $26,765 per month.
SCHEDULE 2.13A and 2.13B
1. Lease Agreement No. 0603740 between NDA Clinical Trial Services, Inc.
and Copelco Leasing Corporation dated November 30, 1994.
2. Copier Maintenance and Supplies Plan Agreement (Agreement Numbers 060880
and 060890) between Acculab Medical Laboratories, Inc. and Pitney Bowes
Inc.
3. Lease Agreement between NDA Clinical Trial Services, Inc. and Oxford
Resources Corp.
4. Equipment Lease between Acculab Medical Laboratories, Inc. and Granrich
Capital Corp.
5. Insurance Policy between NDA Clinical Trial Services, Inc. and Zurich
Insurance Co. with Loveman, Kornreich Co., Inc., as broker.
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<PAGE> 36
6. Insurance Policy (Policy Nos. 135136B and D51922) between NDA Clinical
Trial Services, Inc. and St. Paul F & M Insurance Co. with Sterling &
Sterling Inc. Insurance as broker.
7. Insurance Policy (Policy No. RP06640641) between NDA Clinical Trial
Services, Inc. and St. Paul F & M Insurance Co.
8. Insurance Policy (Policy No. 12UUCCL5536) between NDA Clinical Trial
Services, Inc. and Sammis Insurance.
9. Clinical Laboratory Service Agreement between Mallinckrodt Medical,
Inc. and NDA Clinical Trial Services, Inc. dated December 2, 1993.
10. Clinical Laboratory Service Agreement between Salix Pharmaceuticals,
Inc. and NDA Clinical Trial Services, Inc. executed March 4, 1994.
11. Clinical Laboratory Service Agreement between Sonus Pharmaceuticals and
NDA Clinical Trial Services, Inc. executed May 20, 1994.
12. Clinical Laboratory Service Agreement between Amgen Inc. and NDA
Clinical Trial Services, Inc. executed August 20, 1993.
13. Clinical Laboratory Service Agreement between NDA Clinical Trial
Services, Inc. and Genzyme Corporation executed on November 21, 1994.
14. Master Agreement for the Performance of Reference Laboratory Testing
for Clinical Trials between The Upjohn Company and NDA Clinical Trial
Services, Inc. executed July 13, 1994.
15. Net (Closed End) Lease between Country Ford, Ltd. and NDA Clinical
Trial Services, Inc. with an April 13, 1994 lease date.
16. Master Lease Agreement between NEC America Inc. and Acculab Medical
Laboratories, Inc. D/B/A NDA Laboratories executed April 28, 1992.
17. Clinical Laboratory Service Agreement and Addendum between Novo Nordisk
Pharmaceuticals Inc. and NDA Clinical Trial Services, Inc.
18. Clinical Laboratory Service Agreement between Univax and NDA Clinical
Trial Services, Inc. executed February 13, 1995.
19. Clinical Laboratory Service Agreement between Abbott Laboratories and
NDA Clinical Trial Services, Inc. executed April 27, 1995.
20. Clinical Laboratory Service Agreement between Warner Lambert and NDA
Clinical Trial Services, Inc. executed April 26, 1995.
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21. Clinical Laboratory Service Agreement between Hoffman-LaRoche and NDA
Clinical Trial Services, Inc. executed May 31, 1995.
22. Clinical Laboratory Service Agreement between RRI (for Glaxo) and NDA
Clinical Trial Services, Inc. executed June 14, 1995.
23. Stock Purchase Agreement dated as of December 23, 1993 among the Company,
David Deutsch and Christopher Szustkiewicz.
24. Assignment from Acculab, Inc. to the Company of rights to Laboratory
Information System.
25. Stock Purchase Agreement, Stockholders' Agreement and Registration Rights
Agreement dated December 15, 1994 by and among NDA, Poly Ventures II, L.P.
and the Purchasers or Stockholders, as the case may be, named therein.
26. Stock Purchase Agreement, Stockholders' Agreement and Registration Rights
Agreement dated August 1, 1994 between NDA and Poly Ventures II, L.P.
27. Cooperation Agreement, License Agreement and Marketing Agreement between
NDA and UniHolding Corp. dated March 1, 1995.
28. Employment Agreement with Michael Miller dated July 20, 1995.*
SCHEDULE 2.14
The Company has trade secret and copyright rights to the following
software:
(a) Software programs responsible for the operation of the Company's
laboratory testing services ("Laboratory Information System").
(b) Software programs responsible for organizing and reporting data
collected from the Laboratory Information System for the purpose of supporting
clinical trials ("Clinical Trial Information System").
The Company may also be entitled to obtain patent protection with
respect to the foregoing software.
- ---------------
* Mr. Miller has indicated he will be leaving NDA's employ to take another
position.
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SCHEDULE 2.15
Loans and Advances
Loans from David Deutsch in the amount of $337,000. Loan from Poly
Ventures II, L.P. in the amount of $225,000 and loan from the Long Island
Venture Fund in the amount of $112,500.
SCHEDULE 2.22
Officers of the Company
Chief Executive Officer and Secretary - David Deutsch
President and Treasurer - Ronald Gambardella
Assistant Secretary - David I. Schaffer
The total compensation anticipated to be paid to each of Messrs.
Deutsch and Gambardella by the Company in 1995 is $75,000 plus a car allowance.
SCHEDULE 2.23
Affiliate Transactions
Ronald Gambardella and Janet Gambardella, who are husband and wife, are
the owners of the corporation which owns the building at 260 Smith Street,
Farmingdale, New York, in which the Company's offices are located.
See Stockholder List - Schedule 2.4
See Schedule 2.15
SCHEDULE 4.1(a)
Opinion of Counsel
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<PAGE> 39
SCHEDULE 5.2
David Deutsch
Brian Deutsch
Derek Deutsch
Jeffery Prisco
Ron Gambardella
Poly Ventures II, L.P.
UniHolding Corp.
All investors participating in the Stock Purchase Agreement dated
December 15, 1994.
SCHEDULE 5.9
Source of Funds
- ---------------
August Accounts Receivable - $ 100,000
On Hand - 100,000
UniHoldings Investment - 1,188,000
----------
TOTAL $1,388,000
Use
- ---
Notes Payable Poly Ventures
and Long Island Venture
Fund - $ 337,500
Notes Payable Officer
(Deutsch) - 337,000
Past Due Accounts
Payable - 73,000
August Operating
Expenses - 150,000
1995 Anticipated Loss
(Sept. 1-Dec. 31) - 300,000
1996 Anticipated Loss
(Jan. 1-Mar. 31) - 100,000
Excess Working Capital - 90,500
----------
TOTAL $1,388,000
39
<PAGE> 1
Exhibit 10.2
===============================================================================
OPTION AGREEMENT
between
NDA CLINICAL TRIAL SERVICES, INC.
a Delaware Corporation,
and
UNIHOLDING CORP.
a Delaware Corporation.
Dated as of September 27, 1995
===============================================================================
<PAGE> 2
OPTION AGREEMENT
OPTION AGREEMENT (this "OPTION AGREEMENT"), dated as of September 27,
1995, by and between NDA CLINICAL TRIAL SERVICES, INC., a corporation formed
under the laws of the State of Delaware with its principal address at 260 Smith
Street, Farmingdale, New York, 11735 ("NDA"), and UNIHOLDING CORP., a
corporation formed under the laws of the State of Delaware, with its principal
address at 96 Spring Street, New York, New York, 10012 ("UNIHOLDING").
W I T N E S S E T H
WHEREAS, NDA and UniHolding have entered into a Stock Purchase
Agreement, dated as of September 27, 1995 (the "STOCK PURCHASE AGREEMENT"),
providing, inter alia, for the purchase by UniHolding of 8,932 shares of NDA's
Class A Voting Common Stock, (the "CLASS A STOCK"); and
WHEREAS, the parties hereto desire to set forth in this Option
Agreement certain terms and conditions concerning the option of UniHolding to
purchase additional shares of Class A Stock from NDA; and
WHEREAS, it is a condition precedent to the closing under the Stock
Purchase Agreement that this Option Agreement be executed and delivered
simultaneously with the closing thereunder; and
WHEREAS, each of the parties desires to enter into this Option
Agreement to satisfy the condition described in the preceding paragraph and for
the further purposes herein set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
1
<PAGE> 3
ARTICLE I
OPTION
SECTION 1.01. GRANT OF OPTION TO PURCHASE NDA COMMON STOCK. Subject to
Section 1.03, NDA hereby irrevocably grants to UniHolding the option to purchase
at any time after UniHolding's receipt of NDA's audited income statement and
balance sheet for the fiscal year ended December 31, 1996 until the Expiration
Date (as defined below), the Determined Number (as defined below) of shares of
Class A Stock, in the manner set forth below, at a price per share of Class A
Stock in cash equal to the Established Price Per Share (as defined below),
subject to the other terms and conditions set forth herein (such right is
sometimes referred to herein as the "OPTION").
SECTION 1.02. MANNER OF EXERCISE BY UNIHOLDING. (a) From and after
UniHolding's receipt of the financial statements referred to in subparagraph
(a) above and at any time prior to 5:00 P.M., New York City time on the
Expiration Date, UniHolding may exercise this Option in whole and not in part
for all of the Determined Number of shares of Class A Stock purchasable
hereunder. In order to exercise this Option, UniHolding shall send to NDA at
its address set forth in or provided pursuant to Section 5.02 an irrevocable
written notice of exercise (the "EXERCISE NOTICE"). For all purposes of this
Option Agreement the "EXPIRATION DATE" shall be thirty business days after NDA
has furnished to UniHolding its audited income statement and balance sheet for
the fiscal year ended December 31, 1996.
(b) The Exercise Notice shall be irrevocable and specify a date not
less than fifteen (15) nor more than thirty (30) business days after the date
of the Exercise Notice for the closing of the exercise of the Option (the
"CLOSING DATE"). Upon giving of the Exercise Notice, UniHolding shall be
entitled to receive at the Closing upon delivery of the funds referred to in
paragraph (c) of this Section the number of shares of NDA Class A Stock equal
to the Determined Number.
(c) In order to receive the Determined Number of shares of Class A
Stock upon exercise of the Option, UniHolding shall be required at or prior to
the Closing to pay to NDA an amount equal to the product of the Established
Price Per Share on the date of the Exercise Notice multiplied by the Determined
Number of shares of Class A Stock issuable upon exercise of the Option.
SECTION 1.03. CONDITION PRECEDENT TO GRANT OF OPTION. The obligation
of NDA to grant the Option to UniHolding hereunder is subject to the condition
precedent that a Closing shall have occurred under and as defined in the Stock
Purchase Agreement with respect to the sale of all of the Shares defined
therein.
2
<PAGE> 4
ARTICLE II
CLOSING OF EXERCISE OF OPTION; ETC.
SECTION 2.01. WHEN EXERCISE EFFECTIVE. The exercise of the Option
pursuant to Section 1.02 shall be deemed to have been effected immediately
prior to the close of business on the Closing Date and at such time UniHolding
shall be deemed to have become the holder of record of Class A Stock issued
pursuant to the Option on such date. Until such time, except as specifically
provided hereunder, UniHolding shall have no rights relating to the shares of
Class A Stock issuable pursuant to the Option, including but not limited to
voting rights in relation to such shares.
SECTION 2.02. CLOSING OF THE EXERCISE OF THE OPTION. The closing of
the exercise of the Option and purchase of the Determined Number of shares of
Class A Stock (the "CLOSING") shall be held at 10:00 A.M., New York time on the
Closing Date at the offices of Meltzer, Lippe, Goldstein, Wolf, Schlissel &
Sazer, P.C., 190 Willis Avenue, Mineola, New York, or during such other time or
at such other place as may be agreed upon in writing by NDA and UniHolding. At
the Closing, NDA shall deliver to UniHolding a duly executed certificate or
certificates representing the Determined Number of shares of Class A Stock.
The stock certificate or certificates so delivered shall be registered in the
name of UniHolding and shall contain such legends as NDA and its counsel shall
deem appropriate. At Closing, UniHolding will make payment to NDA for the
Determined Number of shares of Class A Stock in immediately available funds to
a designated account of NDA, in an amount equal to the product of the
Established Price Per Share, multiplied by the Determined Number of shares of
Class A Stock issuable upon exercise of the Option.
ARTICLE III
ESTABLISHED PRICE PER SHARE AND DETERMINED NUMBER
SECTION 3.01. DETERMINED NUMBER OF SHARES. The Determined Number of
shares of NDA Class A Stock issuable upon exercise of this Option shall be
defined as the number of shares of Class A Stock that, when added to all other
shares of Class A Stock beneficially owned by UniHolding and its affiliates
(as such term is defined in Rule 144 promulgated under the Securities Act of
1933) would result in UniHolding and its affiliates (as so defined) beneficially
owning 30% of all shares of NDA capital stock (including but not limited to
Class A Stock and Class B Non-Voting Common Stock ("CLASS B STOCK")) on a fully
diluted basis upon exercise of the Option.
SECTION 3.02. ESTABLISHED PRICE PER SHARE. The Established Price Per
Share shall be determined as follows:
3
<PAGE> 5
The value of the Company shall be equal to 2.8 times the
consolidated revenues of NDA and its subsidiaries as set forth in NDA's
audited, consolidated financial statements for the fiscal year ended
December 31, 1996, less any indebtedness for borrowed funds (excluding
trade debts and capitalized leases) of NDA and its subsidiaries. This
value shall then be divided by the total outstanding shares of NDA's
Class A Stock, Class B Stock and any other shares of NDA's capital
stock outstanding prior to the exercise of the Option. The quotient
shall be defined as the "ESTABLISHED PRICE PER SHARE"; provided
however, in no event shall the Established Price Per Share be less
than $240 per share, as adjusted for stock splits, dividends,
recapitalizations, reclassifications, combinations or similar events.
For sake of clarity, the parties make reference to point 2 of
the Memorandum annexed to the Letter of Intent dated June 16, 1995
executed between the parties, for an application of the above formula.
ARTICLE IV
CERTAIN COVENANTS AND WARRANTIES
SECTION 4.01. RESERVATION OF NDA COMMON STOCK. NDA will at all times
after the date of the Exercise Notice reserve and keep available, solely for
issuance pursuant to the exercise of the Option, the number of shares of NDA
Class A Stock from time to time issuable to UniHolding upon the exercise of the
Option.
SECTION 4.02. REQUIRED WAIVERS AND CONSENTS. NDA represents and
warrants that it has secured any required waivers and consents from its
stockholders in connection with the execution and delivery by NDA of this
Option Agreement and the performance by NDA of its obligations hereunder,
including, but not limited to the delivery of all shares of NDA Common Stock
issuable to UniHolding hereunder.
SECTION 4.03. UNIHOLDING REPRESENTATIONS. At the execution of this
Agreement and at the Closing Date, UniHolding represents and warrants to NDA
that:
(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 Option and the shares of Class A Stock issuable thereunder;
(b) it has sufficient knowledge and experience in investing in
companies similar to NDA in terms of NDA's stage of development so as to be
able to evaluate the risks and merits of its investment in NDA and it is able
financially to bear the risks thereof;
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(c) it has had an opportunity to discuss NDA's business, management
and financial affairs with NDA's management;
(d) the Option being purchased by it, and upon exercise the shares
of Class A Stock issuable thereunder, are being acquired for its own account
for the purpose of investment and not with a view to or for sale in connection
with any distribution thereof;
(e) it understands that (i) the Option, and upon exercise the shares
of Class A Stock issuable thereunder, has not been registered under the
Securities Act by reason of its issuance in a transaction exempt from the
registration requirements of the Securities Act, (ii) the Option and shares of
Class A Stock issuable thereunder must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration, (iii) the Option will bear a legend to such effect and
(iv) NDA will make a notation on its transfer books to such effect.
(f) it has made its own decision to purchase the Option and has not
relied on the decision of any other stockholder of the Company in deciding to
make its investment in NDA.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. COMPLETE AGREEMENT; AMENDMENT. This Option
Agreement contains the complete understanding of the parties with respect to
the subject matter hereof and supersedes any prior written or oral communication
or understanding concerning the subject matter hereof. This Option Agreement
may be amended only by a written instrument signed by the parties hereto.
SECTION 5.02. NOTICES. Any notice pursuant to this Option Agreement
to be given by either party shall be sufficiently given for purposes of this
Option Agreement if sent by first-class mail, postage prepaid, delivered by hand
or overnight internationally recognized courier or sent by facsimile with
confirmation of sending, addressed as follows:
(i) if to NDA, addressed to:
260 Smith Street
Farmingdale, New York 11735
Attention: David Deutsch
Facsimile Number: (516) 777-3904
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with a copy to:
David I. Schaffer, Esq.
Meltzer, Lippe, Goldstein, Wolf
Schlissel & Sazer, P.C.
190 Willis Avenue
Mineola, New York 11501
Facsimile Number: (516) 747-0653
(ii) if to UniHolding, addressed to:
Mr. Paul Hoekfelt, Chief Operating Officer
UniHolding Corp.
12 place de Cornavin
CH 1211 Geneva
Switzerland
or at such other address as shall be furnished in writing to the other parties
as set forth herein. All notices, opinions and other communications provided
for in this Agreement shall, unless submitted in the English language, be
accompanied by a certified English language translation thereof.
SECTION 5.03. ASSIGNMENT; SUCCESSORS. Neither party may assign its
rights under this Option Agreement without the prior written consent of the
other party. This Option Agreement shall be binding upon and shall inure to
the benefit of the successors and permitted assigns of the parties hereto. It
is understood and agreed that, unless prior thereto NDA otherwise consents in
writing, this Option shall not be valid if a majority of either voting control
or economic interest pertaining to the outstanding shares of UniHolding shall
have been transferred to a competitor of NDA. It is further understood and
agreed that, unless prior thereto NDA otherwise consents in writing, under no
circumstances may the shares of NDA issuable pursuant to this Option be
assigned or transferred to a competitor of NDA, and NDA shall not be obligated
to register such a transfer.
SECTION 5.05. HEADINGS. The Section headings herein are for
convenience only, are not part of this Option Agreement and shall not affect
the interpretation hereof.
SECTION 5.06. COUNTERPARTS. This Option Agreement may be executed in
any number of counterparts, each of which shall for all purposes be deemed to
be an original and all of which together shall constitute but one and the same
instrument.
SECTION 5.07. SEVERABILITY. If any provision of this Option Agreement
is found to be illegal or invalid for any reason, the
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remaining provisions of this Option Agreement shall remain in full force and
effect.
SECTION 5.08. ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Option Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breach of this Option
Agreement and to enforce specifically the terms and provisions hereof in any
Federal or State court located in Nassau County, New York, this being in
addition to any other remedy to which they are entitled at law or in equity.
SECTION 5.09. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of New
York, except where by its terms the General Corporation Law of Delaware
applies, regardless of the jurisdiction of creation or domicile of NDA or its
successors or of UniHolding or its successors (without giving effect to the
choice of laws principles of such States). Each party hereby consents to the
exclusive jurisdiction of the courts of the State of New York in Nassau County
and the United States District Court for the Eastern District of New York in
connection with any action arising out of the matters covered hereby and any
litigation commenced by any party arising from the transactions provided for
hereby or relating hereto shall only be commenced in such courts.
Notwithstanding the foregoing, NDA agrees that if UniHolding brings suit, and
its principal place of business has moved to another location in the United
States, NDA will consent to jurisdiction in the Federal and State Courts of the
location in that state that is then UniHolding's principal place of business.
Each party hereby irrevocably submits to the personal jurisdiction of the above
courts, irrevocably agrees not to interpose any defenses based on lack of
personal jurisdiction or forum non conveniens, and irrevocably agrees to
service of any process in connection with this agreement by certified or
registered mail, in addition to any other service permitted by law.
SECTION 5.10 TIME OF THE ESSENCE. It is understood that with respect
to the period during which UniHolding may exercise the Option, time shall be of
the essence.
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IN WITNESS WHEREOF, the parties hereto have caused this Option
Agreement to be duly executed, all as of the day and year first written above.
NDA CLINICAL TRIAL SERVICES, INC.
By: /s/ David Deutsch
-------------------------------
UNIHOLDING CORP.
By: /s/ Melanie Stapp
-------------------------------
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Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
September 27, 1995
To: NDA, and the NDA Stockholders as
their interests appear ("Investors")
RECITALS
WHEREAS: As a condition to the purchase by the Investors of shares of the
Company's Ordinary Shares, the Company has agreed to grant to the
Investors and to any additional stockholder who becomes a party hereto
in the manner set forth herein, registration rights with respect to
all securities of Unilabs Clinical Trials, Ltd. (the "Company") held
by the Investors.
WHEREAS: Additional persons may become shareholders of the Company and in
connection therewith may become parties to this Agreement and thereby
obtained the benefits conferred hereby if they execute the Instrument
of Accession in the form attached as Exhibit A hereto.
AGREEMENT
NOW, THEREFORE, it is agreed as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings.
"Commission" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Ordinary Shares" shall mean the Ordinary Shares, par value One
Pound Sterling per share, of the Company, as constituted as of the date of this
Agreement.
"Company" shall mean Unilabs Clinical Trials, Ltd., a United
Kingdom private limited company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
commission thereunder, all as the same shall be in effect at the time.
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"Registrable Stock" shall mean all shares of any class of equity
security issued to the Investors or their assignees.
"Registration Expenses" shall mean the expenses so described in
Section 6.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 6.
2. Required Registration. (a) At any time beginning six (6) months
after the earlier of a registration statement on (i) covering a public offering
of securities of the Company under the Securities Act shall have become
effective, the holder(s) of at least 25% of the shares of Registrable Stock
issued and outstanding at that time may request the Company to register under
the Securities Act all or any portion of the shares of Registrable Stock held by
such requesting holder or holders for sale in the manner specified in such
notice. Notwithstanding anything to the contrary contained herein, no request
may be made under this Section 2 within 120 days after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering in which the holders of Registrable Stock shall
have been entitled to join pursuant to Section 3 or 4 and in which there shall
have been effectively registered all shares of Registrable Stock as to which
registration shall have been requested.
(b) Following receipt of any notice under this Section 2, the Company
shall immediately notify all holders of Registrable Stock from whom notice has
not been received and shall use its best efforts to register under the
Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of shares of
Registrable Stock specified in such notice (and in all notices received by the
Company from other holders within 30 days after the giving of such notice by
the Company). The Company shall be obligated to register Registrable Stock
pursuant to this Section 2 on two occasions only; provided, however, that such
obligation shall be deemed satisfied only when a registration statement
covering at least 75% of the shares of Registrable Stock specified in notices
received as aforesaid, for sale in accordance with the method of disposition
specified by the requesting holders, shall have become effective
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and, if such method of disposition is a firm commitment underwritten public
offering, such shares shall have been sold pursuant thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 2, for sale in accordance with the method
of disposition specified by the requesting holders, Ordinary Shares to be sold
by the Company for its own account or for sale by others, except as and to the
extent that, in the opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such inclusion would
adversely affect the marketing of the Registrable Stock to be sold, and except
that if the number of Ordinary Shares so included for the account of the Company
and others exceeds the number of shares of Registrable Stock of the holder or
holders of outstanding Registrable Stock requesting such registration, then
such registration shall be deemed to be a registration in accordance with and
pursuant to Section 3. Except for registration statements on Form S-4, S-8,
F-4, F-11, F-12 or any successor thereto, the Company will not file with the
Commission any other registration statement with respect to its Ordinary Shares,
whether for its own account or that of other stockholders, from the date of
receipt of a notice from requesting holders pursuant to this Section 2 until the
completion of the period of distribution of the registration contemplated
thereby.
3. Incidental Registration. If the Company at any time (other than
pursuant to Section 2 or Section 4) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms S-4, S-8, F-4, F-11, F-12 or another form not
available for registering the Registrable Stock for sale to the public), each
such time it will give written notice to all holders of outstanding Registrable
Stock of its intention so to do. Upon the written request of any such holder,
received by the Company within 30 days after the giving of any such notice by
the Company, to register any of its Registrable Stock (which request shall state
the intended method of disposition thereof), the Company will use its best
efforts to cause the Registrable Stock as to which registration shall have been
so requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the holder (in accordance with its
written request) of such Registrable Stock so registered. In the event that any
registration pursuant to this Section 3 shall be, in whole or in part, an
underwritten public offering of Ordinary Shares, the number of shares of
Registrable Stock to be included in
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such an underwriting may be reduced; provided, however, that in no event may
less than one-third of the total number of Ordinary Shares to be included in
such underwriting be made available for shares of Registrable Stock.
Notwithstanding the foregoing provisions, the Company may withdraw any
registration statement referred to in this Section 3 without thereby incurring
any liability to the holders of Registrable Stock.
4. Registrable on Form S-3. If at any time (i) a holder or holders of
Ordinary Shares issued request that the Company file a registration statement on
Form S-3 or Form F-3 or any successor thereto for a public offering of all or
any portion of the shares of Registrable Stock held by such requesting holder or
holders, and (ii) the Company is a registrant entitled to use Form S-3 or F-3 or
any successor thereto to register such shares, then the Company shall use its
best efforts to register under the Securities Act on Form S-3 or F-3 or any
successor thereto, for public sale in accordance with the method of a
disposition specified in such notice, the number of shares of Registrable Stock
specified in such notice. Whenever the Company is required by this Section 4 to
use its best efforts to effect the registration of Registrable Stock, each of
the procedures and requirements of Section 2 (including but not limited to the
requirement that the Company notify all holders of Registrable Stock from whom
notice has not been received and provide them with the opportunity to
participate in the offering) shall apply to such registration, provided,
however, that the requirements contained in the first sentence of Section 2(a)
shall not apply to any registration on Form S-3 or Form F-3 which may be
requested and obtained under this Section 4.
5. Registration Procedures. If and whenever the Company is required
by the provisions of Sections 2, 3 or 4 to use its best efforts to effect the
registration of any shares of Registrable Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which in the case of an underwritten public offering pursuant to
Section 2, shall be on Form S-1 or F-1 or F-6 or other form of
general applicability satisfactory to the managing underwriter
selected as therein provided) with respect to such securities and
use its best efforts to cause such registration statement to become
and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);
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(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and
comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Stock covered by such registration
statement in accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(c) furnish to each seller of Registrable Stock and to each underwriter
such number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus) as such persons
reasonably may request in order to facilitate the public sale or other
disposition of the Registrable Stock covered by such registration
statement;
(d) use its best efforts to register or qualify the Registrable Stock
covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as the sellers of Registrable Stock or,
in the case of an underwritten public offering, the managing underwriter
reasonably shall request; provided, however, that the Company shall not
for any such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it is not so
qualified or to consent to general service of process in any such
jurisdiction;
(e) use its best efforts to list the Registrable Stock covered by such
registration statement with any securities exchange on which the Common
Stock of the Company is then listed;
(f) immediately notify each seller of Registrable Stock and each
underwriter under such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event of which the Company has
knowledge as a result of which the prospectus contained in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
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(g) if the offering is underwritten and at the request of any seller of
Registrable Stock, use its best efforts to furnish on the date that
Registrable Stock is delivered to the underwriters for sale pursuant to
such registration: (i) an opinion dated such date of counsel
representing the Company for the purposes of such registration,
addressed to the underwriters and to such seller, stating that such
registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated
under the Securities Act, (B) the registration statement, the related
prospectus and each amendment or supplement thereof comply as to form
in all material respects with the requirements of the Securities Act
(except that such counsel need not express any opinion as to financial
statements or other financial data contained therein) and (C) to such
other effects as reasonably may be requested by counsel for the
underwriters or by such seller or its counsel and (ii) a letter dated
such date from the independent public accountants retained by the
Company, addressed to the underwriters and to such seller, stating that
they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereof,
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information
as to the period ending no more than five business days prior to the
date of such letter) with respect to such registration as such
underwriters reasonably may request; and
(h) make available for inspection by each seller of Registrable Stock,
any underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriters,
attorney, accountant or agent in connection with such registration
statement.
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For purposes of Section 5(a) and 5(b) and of Section 2(c), the period of
distribution of Registrable Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of all securities purchased by it, and the period of distribution of Registrable
Stock in any other registration shall be deemed to extend until the earlier of
the sale of all Registrable Stock covered thereby and 90 days after the
effective date thereof.
In connection with each registration hereunder, the sellers of
Registrable Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably
shall be necessary in order to assure compliance with federal and applicable
state securities laws.
In connection with each registration pursuant to Sections 2, 3 or 4
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
6. Expenses. All expenses incurred by the Company in complying with
Sections 2, 3 and 4, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of insurance and reasonable fees
and disbursements of one counsel for the sellers of Registrable Stock, but
excluding any Selling Expenses, are called "Registration Expenses". All
underwriting discounts and selling commissions applicable to the sale of
Registrable Stock are called "Selling Expenses".
The Company will pay all Registration Expenses in connection with (i)
one registration statement under Section 2, (ii) all registration statements
under Section 3 and (iii) one registration statement under Section 4. All
Selling Expenses in connection with each registration statement under Sections
2, 3, or 4 shall be borne by the participating sellers in proportion to the
number of shares sold by each, or by such participating sellers other than the
Company (except to the extent the Company shall be a seller) as they may agree.
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7. Indemnification and Contribution. (a) In the event of a
registration of any of the Registrable Stock under the Securities Act pursuant
to Sections 2, 3 or 4, the Company will indemnify and hold harmless each seller
of such Registrable Stock thereunder, each underwriter of such Registrable Stock
thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any registration
statement under which such Registrable Stock was registered under the
Securities Act pursuant to Sections 2, 3 or 4, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each such seller, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by any such seller, any such
underwriter or any such controlling person in writing specifically for use in
such registration statement or prospectus.
(b) In the event of a registration of any of the Registrable Stock
under the Securities Act pursuant to Sections 2, 3 or 4, each seller of such
Registrable Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Registrable Stock
was registered under the Securities Act pursuant to Sections 2, 3, or
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4, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such,
furnished in writing to the Company by such seller specifically for use in such
registration statement or prospectus; provided, further, that the liability of
each seller hereunder shall be limited to the proportion of any such loss,
claim, damage, liability or expense which is equal to the proportion that the
public offering price of the shares sold by such seller under such registration
statement bears to the total public offering price of all securities sold
thereunder, but not in any event to exceed the proceeds received by such seller
from the sale of Registrable Stock covered by such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 7 and shall only relieve
it from any liability which it may have to such indemnified party under this
Section 7 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent
it shall wish, to assume and undertake the defense thereof with counsel
reasonably satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 7 for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation and of liaison with counsel so selected;
provided, however, that, if the defendants in any such action include both the
indemnified
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party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred. No indemnifying party,
in defense of any such action, shall, except with the consent of each
indemnified party, consent to the entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving,
by the claimant or plaintiff, to such indemnified party of a release from all
liability in respect to such action.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder
of Registrable Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 7 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section 7
provides for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any such selling holder or any
such controlling person in circumstances for which indemnification is provided
under this Section 7; then, and in each such case, the Company and such holder
will contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) in such proportion
so that such holder is responsible for the portion represented by the
percentage that the public offering price of its Registrable Stock offered by
the registration statement bears to the public offering price of all securities
offered by such registration statement, and the Company is responsible for the
remaining portion; provided, however, that, in any such case, (A) no such
holder will be required to contribute any amount in excess of the public
offering price of all such Registrable Stock offered by it pursuant to such
registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty
of such fraudulent misrepresentation.
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8. Changes in Ordinary Shares. If, and as often as, there is any
change in the Ordinary Shares by way of stock split, stock dividend,
combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Ordinary Shares as
so changed.
9. Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Stock to the public without registration, at all
times after 90 days after any registration statement covering a public offering
of securities of the Company under the Securities Act shall have become
effective, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and
(c) furnish to each holder of Registrable Stock forthwith upon
request a written statement by the Company as to its compliance with
the reporting requirements of such Rule 144 and of the Securities Act
and the Exchange Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by
the Company as such holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing such holder to
sell any Registrable Stock without registration.
10. Representations and Warranties of the Company. The Company
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement
by the Company 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 Charter or Articles of
Association of the Company or any provision of any indenture, agreement
or other instrument to which it or any of its properties or assets is
bound, 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 or encumbrance of any nature
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<PAGE> 12
whatsoever upon any of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, reorganization and moratorium laws
and other laws of general application affecting enforcement of
creditors' rights generally and (ii) the availability of equitable
remedies as such remedies may be limited by equitable principles of
general applicability (regardless of whether enforcement is sought in a
proceeding in equity or at law).
11. Miscellaneous. (a) All covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including without limitation transferees of any Registrable Stock),
whether so expressed or not; provided, however, that registration rights
conferred herein on the holders of Registrable Stock shall only inure to the
benefit of a transferee of Registrable Stock if (i) there is transferred to such
transferee at least 20% of the total shares of Registrable Stock originally
issued to the Investor or (ii) such transferee is a partner, shareholder or
affiliate of a party hereto.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be effective upon receipt when mailed by
certified or registered mail, return receipt requested, postage pre-paid, or,
in the case of non-U.S. residents, telecopied and sent by air mail, addressed
as follows:
if to the Company or any other party hereto, at the address of
such party set forth in the UCT Option Agreement, executed between the
parties of even date herewith;
if to any subsequent holder of Registrable Shares, to it at
such address as may have been furnished to the Company in writing by
such holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Registrable
Stock) or to the holders of Registrable Stock (in the case of the Company) in
accordance with the provisions of this paragraph.
12
<PAGE> 13
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, provided, however, that such laws do
not constitute an illegal or unconscionable act under the governing law of the
Company's incorporation or subject the Company to liability for breach or
violation of any such applicable rule, regulation or industry standard in the
jurisdiction of operations.
(d) 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.
(e) The obligations of the Company to register shares of Registrable
Stock under Sections 2, 3 or 4 shall terminate on the fifteenth anniversary of
the date of this Agreement, unless such obligations terminate earlier in
accordance with the terms of this Agreement.
(f) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, each holder of
Registrable Stock who is a party to this Agreement shall agree not to sell
publicly any shares of Registrable Stock or any of Ordinary Shares (other than
shares of Registrable Stock or other Ordinary Shares being registered in such
offering), without the consent of such underwriters, for a period of not more
than 180 days following the effective date of the registration statement
relating to such offering; provided, however, that all persons entitled to
registration rights with respect to Ordinary Shares who are not parties to this
Agreement, all other persons selling Ordinary Shares in such offering and all
executive officers and directors of the Company shall also have agreed not to
sell publicly their Ordinary Shares under the circumstances and pursuant to the
terms set forth in this Section 11(f).
(g) Notwithstanding the provisions of Section 5(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period not
to exceed 90 days in any 24-month period if there exists at the time material
non-public information relating to the Company which, in the reasonable opinion
of the Board of Directors of the Company, should not be disclosed.
(h) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be
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<PAGE> 14
carried out as if any such illegal, invalid or unenforceable provision were not
contained herein.
(i) Except as otherwise provided herein, neither this Agreement nor
any provision hereof can be modified, changed, discharged, waived or terminated
except by an instrument in writing signed by the party against whom the
enforcement of any modification, change, waiver, discharge or termination is
sought or by the agreement of holders representing at least 51% of the shares
owned by the Investors at the time of said action.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
effective as of this 27th day of September, 1995.
UNILABS CLINICAL TRIALS, LTD.
By: /s/ Melanie K. Stapp
--------------------
Name: MELANIE K. STAPP
Title: AGENT, BY POWER OF ATTORNEY
NDA Clinical Trial
Services, Ltd.
- --------------------
NDA Stockholders to sign by Instrument of Accession annexed hereto.
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<PAGE> 15
Instrument of Accession
The terms of provisions of the Registration Rights Agreement dated as
of September 27, 1995, among Unilabs Clinical Trials, Ltd. and the stockholders
signatory thereto 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)
15
<PAGE> 1
Exhibit 10.4
DATED SEPTEMBER 27, 1995
NDA CLINICAL TRIAL SERVICES INC. AND OTHERS
and
UNILABS CLINICAL TRIALS LIMITED
and
UNIHOLDING CORP
-------------------------------
UCT OPTION AGREEMENT
-------------------------------
Barnett Alexander Chart
---------SOLICITORS------------
34-35 Dean Street, London W1V 5AP
Telephone: 0171-434 4011, 0171-434 0771 Fax: 0171-434 1269
DX 44716 Soho Square
Ref:26191
<PAGE> 2
CONTENTS
CLAUSES
1. Definitions & Interpretation
2. Grant of Option
3. Exercise of Option
4. Completion
5. Warranties
6. Company's Obligations
7. UniHolding's Obligations
8. Transfer of Option Shares & Allotment
9. General
10. Confidentiality
11. Assignment
12. Announcements
13. Time of the Essence
14. Whole Agreement & Variation
15. Waiver
16. No Partnership or Agency
17. Notice
18. Counterparts
19. Governing Law
20. First Optionholder's and Second Optionholders' Representations
SCHEDULES
1. Optionholders
2. Information Concerning the Company
3. Particulars of UniHolding
4. Calculation of Option Shares and Option Price
5. Warranties
6. Warranty Limitations
7. Exercise Notice
8. List of Contractual Commitments
<PAGE> 3
ANNEXURES
1. Company's Articles of Association
2. Deed of Adherence
3. Sample calculations relating to Schedule 4
4. Opinion to be given by the Company's legal advisors pursuant to
clause 6.2(a) of this Agreement
<PAGE> 4
THIS AGREEMENT is made the ______________ day of _______________ 1995
BETWEEN:
1. NDA CLINICAL TRIAL SERVICES INC. a Delaware corporation having its
principal place of business at 260 Smith Street, Farmingdale, New York
11735, United States of America ("the First Optionholder")
2. THOSE PERSONS, PARTNERSHIPS OR CORPORATIONS whose details are set out
in Schedule 1 (together "the Second Optionholders")
3. UNILABS CLINICAL TRIALS LIMITED a company incorporated in England and Wales
(Registered No 2626808) whose registered office is at Bewlay House, 32
Jamestown Road, Camden, London NE1 7BY England ("the Company")
4. UNIHOLDING CORP a Delaware corporation having its principal place of
business at 96 Spring Street, New York, New York 10012, United States of
America ("UniHolding").
WHEREAS:
(A) The First Optionholder and UniHolding have entered into a stock purchase
agreement dated September 27, 1995 ("the Stock Purchase Agreement")
providing for the purchase by UniHolding of certain common stock in the
capital of the First Optionholder and have entered into an option agreement
("the NDA Option Agreement") of the same date providing UniHolding with an
option to purchase certain additional common stock in the capital of the
First Optionholder;
(B) It is a condition precedent to the completion of the Stock Purchase
Agreement and the NDA Option Agreement that the Company simultaneously sign
this Agreement in favour of the Optionholders;
(C) The Company has agreed to grant the Options upon the terms and subject to
the conditions of this Agreement to the Optionholders.
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<PAGE> 5
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, the Recitals, the Schedules and the Annexures
hereto unless the context requires otherwise:
"ACCOUNTS" means the Annual Accounts for the year ended 31 May 1997;
"ACCOUNTS DATE" means 31 May;
"ANNUAL ACCOUNTS" means the audited (and consolidated if applicable)
balance sheet and profit and loss account and cash flow statement of
the Company in relation to each financial year of the Company as at
the Accounts Date and the directors' report and notes annexed thereto
prepared in accordance with UK generally accepted accounting
principles;
"ARTICLES" means the Articles of Association of the Company at the
date hereof attached hereto as Annexure 1;
"BALANCE SHEETS" means the audited balance sheet of the Company as at
31 May 1994 and the unaudited balance sheet of the Company as at 31
May 1995;
"BUSINESS DAY" means a day other than a Saturday, Sunday or public
holiday on which banks in England are open for business;
"COMPLETION" means the completion of one of the Options pursuant to
Clause 4;
"COMPLETION DATE" means, in relation to the Exercise, the first
Business Day next falling after the expiry of 30 days from the
Exercise Date;
"DEED OF ADHERENCE" means the deed of adherence in the form set out in
Annexure 2;
"DIRECTORS" mean the directors of the Company;
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<PAGE> 6
"EXERCISE" means the exercise of an Option by the First Optionholder
or the Second Optionholders (as the case may be);
"EXERCISE DATE" means the date upon which either the First
Optionholder or the Second Optionholders issue an Exercise Notice in
respect of the Exercise;
"THE EXERCISED OPTION SHARES" means the Option Shares in relation to
which an Option has been exercised;
"EXERCISE NOTICE" means a notice substantially in the form of Schedule
7;
"FIRST DISCLOSURE LETTER" means the Disclosure Letter to be delivered
to the Optionholders at the date of this Agreement;
"FIRST EXERCISE PERIOD" means the period commencing on the date on
which the Company shall deliver to all of the Optionholders the
Accounts and ending on the First Termination Date;
"THE FIRST OPTION" means the Option granted by the Company to the
First Optionholder in clause 2.1;
"THE FIRST OPTION SHARES" means the number of Ordinary Shares in the
Company calculated in accordance with paragraph 1(a) of Schedule 4;
"THE FIRST TERMINATION DATE" means 17.00 hours (London time) on the
day falling 30 days after the commencement of the First Option Period;
"GROUP MEMBER" means, in relation to the Company, the Company, any
other body corporate which is its holding company or subsidiary and
any other body corporate which is a subsidiary of that holding company
as defined in Section 53 Companies Act 1989, or in relation to Clause
7.2, any shareholder thereof or family member of a shareholder or
person or entity associated therewith;
"INTELLECTUAL PROPERTY" means patents, trade marks, service marks,
design
3
<PAGE> 7
rights (whether registerable or otherwise) applications for any of the
foregoing, copyright, know how, confidential information, trade or
business names and other similar rights or obligations whether
registrable or not in any country (including but not limited to the
United Kingdom);
"AN OPTION" means the First Option or the Second Option (as the case
may be);
"THE OPTIONS" means the First Option and the Second Option;
"OPTION PRICE" means the sum calculated in accordance with Schedule 4
payable by either the First Optionholder or the Second Optionholders
in respect of each Option Share;
"OPTION SHARE" means a share in the capital of the Company which is
subject to an Option;
"THE OPTIONHOLDERS" means the First Optionholder and the Second
Optionholders;
"QUARTERLY ACCOUNTS" means an unaudited quarterly balance sheet,
profit and loss account and cash flow statement (consolidated if
applicable) for the Company prepared in accordance with UK generally
accepted accounting principles and certified by the Company's
financial director such balance sheet to be as of the end of such
financial quarter and such profit and loss account and cash flow
statement to be for such financial quarter and for the period from the
beginning of the financial year to the end of such financial quarter,
in each case with comparative statements for the corresponding period
in the previous financial year;
"SECOND DISCLOSURE LETTER" means the disclosure letter to be delivered
to either the First Optionholder or the Second Optionholders no later
than 10 Business Days after receipt by the Company of the Exercise
Notice;
"THE SECOND OPTION" means the Option granted by the Company to the
Second Optionholders in clause 2.2;
4
<PAGE> 8
"THE SECOND EXERCISE PERIOD" means the period commencing on the day
after the First Termination Date and ending on the Second Termination
Date;
"THE SECOND TERMINATION DATE" means 17.00 hours (London time) on the
day falling 30 days after the commencement of the Second Exercise
Period;
"SHARES" means all of the issued ordinary shares in the Company for
the time being;
"THE SECOND OPTION SHARES" means the number of Ordinary shares in the
capital of the Company calculated in accordance with paragraph 1(b) of
Schedule 4;
"STOCK EXCHANGE" means The International Stock Exchange of the United
Kingdom and the Republic of Northern Ireland Limited;
"SUBSIDIARY" means any subsidiary of the Company (if any) as defined
under Section 736 Companies Act 1985 (as amended);
"TOTAL OPTION PRICE" means the Option Price multiplied by the Option
Shares;
"WARRANTIES" has the meaning attributed thereto in Clause 5.1 and 5.2
and set out in Schedule 5;
1.2 References to persons include bodies corporate.
1.3 References to Clauses, Schedules and Annexures are references to Clauses,
Schedules and Annexures to this Agreement.
1.4 The Schedules hereto form part of and are incorporated in this Agreement.
1.5 Headings are included for ease of reference only and shall not affect the
interpretation of this Agreement.
2. GRANT OF OPTION
5
<PAGE> 9
2.1 Subject to Clause 2.3, in consideration of the sum of 1.00 pound sterling
(receipt of which the Company hereby acknowledges) the Company hereby
grants to the First Optionholder an option exercisable by the First
Optionholder at any time during the First Exercise Period to subscribe
for the whole of the First Option Shares at the Option Price in
accordance with the terms of this Agreement.
2.2 Subject to clause 2.3 and clause 18 (second sentence), in consideration of
the sum of 1.00 pound sterling (receipt of which the Company hereby
acknowledges) the Company hereby grants to the Second Optionholders an
option exercisable by the Second Optionholders at any time during the
Second Exercise Period to subscribe for the Second Option Shares at the
Option Price in accordance with the terms of this Agreement if the First
Optionholder shall not have exercised the First Option. For the avoidance
of doubt the Second Optionholders shall have no right to subscribe for
any Option Shares in the event of the First Optionholder exercising the
First Option.
2.3 The Exercise of either Option by either the First Optionholder or the
Second Optionholders shall be subject to the following conditions having
been fulfilled in each case prior to the Exercise Date:
(a) the sale and allotment of the Shares under and as defined in the Stock
Purchase Agreement in accordance with the terms therein; and
(b) UniHolding exercising its option under the NDA Option Agreement in
accordance with the terms therein.
3. EXERCISE OF OPTION
3.1 Subject to the provisions of clause 2.3 the First Optionholder may at any
time during the First Exercise Period exercise the First Option by
delivering an Exercise Notice in respect of all the Option Shares to the
Company at its registered office for the time being detailing the Option
Price, such Option Price being calculated in accordance with Schedule 4.
3.2 Subject to the provisions of clauses 2.2, 2.3 and 3.3 the Second
Optionholders may at any time during the Second Exercise Period exercise
the Second Option by delivering an Exercise Notice in respect of all or any
of the Option Shares to the Company at its registered office for the time
being detailing the number of Option
6
<PAGE> 10
Shares in relation to which the Second Option is being exercised and the
Option Price, such number of Option Shares and such Option Price being
calculated in accordance with Schedule 4.
3.3 The following provisions shall apply in relation to any exercise of the
Second Option:
(a) The Second Option shall be exercisable by the Second Optionholders,
pro-rata to their respective holdings of issued Class A Voting Common
Stock in the First Optionholder at the Exercise Date as follows (such
method of calculation is hereafter referred to as "Pro Rata"): Should
any Second Optionholder wish to exercise its Pro Rata portion of the
Second Option (hereinafter, a "Participant") the Participant shall
give notice to the other Second Optionholders and David I Schaffer Esq
of Meltzer Lippe Goldstein Wolf Schlissel & Sazer PC of this intention
("the Participant's Notice") not later than 10 days after the rights
of the Second Optionholders shall have arisen under Clause 2.2. In
such notice the Participant shall advise that it is willing to
exercise its Pro Rata portion of the Second Option and that it has the
means to do so.
(b) If any Second Optionholder has not sent in a Participant's Notice
within the 10 day period referred to in Clause 3.3 (a), his right
shall be apportioned to the other Participants who have agreed to
purchase their own Pro Rata portion and wish to participate in such
further apportionment. Such further apportionment shall be in
proportion to each such other Participant's percentage interest in the
First Optionholder as compared to the percentage of all such other
Participants. If not all the Option Shares have been taken up by this
apportionment, successive apportionments shall be effected until the
earlier of (i) a commitment to take up all of the Option Shares is
achieved or (ii) one day prior to the Second Termination Date. Prior
to the Second Termination Date, the Participants shall then coordinate
the dispatch of the Exercise Notice to the Company.
(c) If on or prior to the Second Termination Date the Company has received
an Exercise Notice by some or all the Participants to purchase not
less than the minimum number of Option Shares which each Participant
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<PAGE> 11
intends to purchase under Clause 3.3 (a) the Company shall issue the
Exercised Option Shares to each Participant and effect Completion
under Clause 4 below in accordance with the Pro Rata proportion of
Option Shares to which he is entitled.
3.4 Subject to Clause 6.2 any Exercise Notice shall be irrevocable.
4. COMPLETION
4.1 Subject to the terms and conditions of this Agreement and the prior receipt
in full by the Company of the Total Option Price in cleared sterling funds
as provided for in this Agreement to such bank account as the Company shall
notify to the First Optionholder or Second Optionholders as the case may be
as soon as practicable following receipt of the Exercise Notice the
Exercise shall be completed on the Completion Date at 10.00 am (London
time) at the registered office of the Company when the Company shall issue
and allot to the First Optionholder or the Second Optionholders (as the
case may be) the Exercised Option Shares and deliver to the First
Optionholder or the Second Optionholders the share certificate(s) in
respect thereof and register the First Optionholder or the Second
Optionholders (as the case may be) as the holder(s) of the Exercised Option
Shares.
4.2 All the Option Shares allotted pursuant to this Agreement shall be sold
free of all liens, charges, equities and encumbrances.
4.3 The Exercise of an Option pursuant to Clause 3 shall be deemed to have been
effected immediately prior to the close of business (London time) on the
Completion Date and at such time the First Optionholder or the Second
Optionholders (as the case may be) shall be deemed to have become the
registered holder of the Exercised Option Shares to be allotted hereunder
with all rights attaching thereto including the right to all dividends and
distributions declared in relation to such Exercised Option Shares.
4.4 The delivery of share certificates pursuant to Clause 4.1 shall be made
without charge to the First Optionholder or Second Optionholders for any
tax chargeable on the allotment of shares (if any) in respect thereto,
provided that the Company shall not be required to pay any tax which may
be chargeable in respect of any
8
<PAGE> 12
transfer involved in the issue and delivery of any share certificate in a
name other than that of the First Optionholder or Second Optionholders.
5. WARRANTIES
5.1 With the intent that the Optionholders shall enter into this Agreement at
the date hereof the Company warrants as at the date hereof in the terms of
the Warranties.
5.2 Subject to Clause 5.4 with the intent that the First Optionholder or the
Second Optionholders shall Exercise one of the Options on the Exercise
Date the Company warrants as at the Exercise Date in respect of the period
from the date of this Agreement to the Completion Date in the terms of the
Warranties which warranties shall be deemed to be repeated immediately
prior to the Completion Date.
5.3 Subject to Clause 5.4 the Company hereby acknowledges that the
Optionholders are entering into this Agreement in reliance on the
Warranties as given as at the date of this Agreement and that the First
Optionholder or the Second Optionholders will Exercise one of the Options
in reliance on the Warranties as given for the period from the Exercise
Date to the Completion Date in accordance with the terms of this
Agreement.
5.4 Each of the Warranties given as at the date of this Agreement are given
subject to matters disclosed in this Agreement and the First Disclosure
letter and each of the Warranties as given for the period from the
Exercise Date to the Completion Date are given subject to matters
disclosed in this Agreement and the Second Disclosure letter. The First
Disclosure Letter and the Second Disclosure Letter shall be delivered to
either the First Optionholder or the Second Optionholders. The Second
Disclosure Letter may be updated by the Company at any time up to and
including the Completion Date.
5.5 The Optionholders shall not be entitled to make any claim under or
pursuant to the Warranties to the extent such claims are excluded by
Schedule 6.
6. COMPANY'S OBLIGATIONS
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<PAGE> 13
6.1 If at any time prior to the Termination Date:
(a) the Company shall declare any discretionary scrip dividend upon its
Shares or make any special dividend or other distribution;
(b) the Company shall offer for subscription pro rata to the holders of
its Shares any additional securities of any class or other rights;
(c) there shall be any capital reorganisation or reclassification of the
Company's share capital, or consolidation or merger of the Company
with, or sale of all or substantially all its assets or share capital
to any other company;
(d) there shall be a voluntary or involuntary arrangement, liquidation or
winding-up of the Company; or
(e) the Company shall enter into an agreement or adopt a plan for the
purpose of effecting a consolidation, merger or sale of all or
substantially all of its assets or share capital, other than a merger
where the Company is the surviving corporate entity and the terms of
the Company's share capital remain unchanged;
then, in any one or more of such cases, the Company shall give notice to
the Optionholders of the date on which (a) the books of the Company shall
close or a dividend or distribution shall be declared or subscription
rights offered or (b) such reorganisation, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up shall
take place, as the case may be. Such notice shall also specify the date
as of which the registered owners of any class of share in the capital of
the Company shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their share for
securities or other property deliverable upon such reorganisation,
reclassification, consolidation, merger, sale, dissolution, liquidation
or winding-up, as the case may be. Such written notice shall be given at
least 30 days prior to the action in question if practicable and not less
than 10 days prior to the declaration or offer date or the date on which
the Company's transfer books are closed in respect thereto if practicable.
10
<PAGE> 14
6.2 The Optionholders may give notice to the Company once prior to the
Exercise (save in relation to 6.2(a) below which opinion may be requested
twice) that the Company should deliver the information or documents
referred to in this Clause 6.2 as soon as reasonably practicable and that
the Company perform the actions below at the time specified. The Company
shall only be obliged to comply with the obligations in this Clause 6.2
when the First Optionholder or Second Optionholders entitled to 51% or
more of the Option Shares notify the Company of a request hereunder. If
the Company shall fail to comply with its obligations under this Clause
and such non-compliance is not waived by the Optionholders giving the
notice then the First Optionholder or Participants holding a majority
interest in the Option Shares may by notice require that the First and
Second Termination Dates and the Completion Date be extended until 10 days
after the earlier of such compliance or until the Managing Director of the
Company certifies that the Company has complied to the extent possible.
Any Participant may, notwithstanding its Exercise of the Second Option,
withdraw that part of the Exercise Notice relating to its part of the
Second Option without liability therefor if the Company fails to comply
with this Clause 6.2 or if the representations made in Clause 6.2 (b) are
not, in such Participant's reasonable opinion, adequate for such
Participant to complete the Exercise of the Second Option. The information
or documents as the case may be which may be the subject of a request
under this Clause are as follows:
(a) an opinion in the form attached as Annexure 4 as at the date
requested from the Company's solicitors certifying their opinion as
a condition of Completion that so far as they are aware based solely
on enquiry of the Company's directors the Company is duly
incorporated, the authorised and issued share capital of the Company
as at that time, brief details of the relevant resolutions that have
been passed in relation to the allotment hereunder and that the
Agreement has been validly executed;
(b) the Company shall have performed and complied with all the agreements
contained herein and required to be performed or complied with by it
prior to or at the Completion Date and the Managing Director of the
Company shall have certified to Optionholders in writing to such
effect provided that nothing herein contained shall be construed so
as to compel UniHolding to exercise its rights under the NDA Option
Agreement;
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<PAGE> 15
(c) all corporate and other proceedings to be taken by the Company
hereunder and all documents incident thereto shall be in a form and
substance reasonably satisfactory to the Optionholders and the
Optionholders shall at their own expense have received all such
counterpart originals or certified or other copies of such documents
as they may reasonably request;
(d) (i) the Memorandum and Articles certified as of a recent date by the
Company's secretary together with confirmation by him of the
Company's due incorporation, good standing and the payment of
all due taxes;
(ii) a certificate of the said secretary dated as at the Completion
Date certifying that attached thereto is a true and complete
copy of the Company's Memorandum and Articles on the date of
such certification and that the Memorandum and Articles
attached thereto are in full force and effect and has not been
amended and that no notice has been received directly
attributable to the Exercise of any default, or occurrence or
omission which with notice or the passage of time or both would
result in an event of default under any material agreement to
which the Company is a party and as to the authority and
specimen signature of each officer of the Company executing the
share certificates relating to the Exercised Option Shares.
6.3 The Company shall provide within the time periods specified below:
(a) to the First and Second Optionholders within ninety (90) days after
each financial year end of the Company commencing 31 May 1995 the
Annual Accounts together with a certificate executed by the Company's
secretary stating that such officer has caused this Agreement to be
reviewed and has no knowledge of any default by the Company in the
performance or observance of any of the provisions of this Agreement
or, if such officer has such knowledge, specifying such default and
the nature thereof;
(b) for the relevant period following the date of this Agreement to the
First Optionholder within forty-five (45) days after the end of each
fiscal quarter
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<PAGE> 16
in each fiscal year (other than the last quarter in each fiscal year)
the Quarterly Accounts;
(c) following the date of this Agreement to the First Optionholder as
soon as reasonably practicable upon sending, making available or
filing the same, all press releases, reports and financial statements
that the Company sends or makes available to its shareholders or
directors or filed with the Stock Exchange or any other international
stock exchange;
provided that in the event that the Second Optionholders shall Exercise
the Second Option pursuant to Clause 3.2 the Company shall deliver copies
of the information referred to at 6.3(b)-(c) above to them as soon as
reasonably practicable following receipt of the Exercise Notice.
In addition to the information to be provided under Clause 6.3(a)-(c) the
Company shall deliver to the First Optionholder as soon as reasonably
practicable such of the information referred to in Clause 6.2(e)-(g) as
the Company shall in its absolute discretion consider to materially affect
the Optionholders or any of them:
(e) after the commencement thereof, notice of all actions, claims,
proceedings, investigations and inquiries of the type described in
paragraph 6 of the Warranties that could materially adversely affect
the Company;
(f) from time to time, such other information regarding the business
prospects, financial condition, operations, property or affairs of
the Company as the First Optionholder may reasonably request; and
(g) all minutes and consents of the board of directors of the Company as
soon as reasonably practicable after a meeting has occurred or a
consent signed.
6.4 The Company further covenants with the Optionholders that for the period
from the Exercise to the Second Termination Date:
(a) it shall maintain during the First or Second Exercise Period (as the
case may be) sufficient unissued Shares to satisfy the Exercise of
either of the Options; and
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<PAGE> 17
(b) notwithstanding the provisions of the Articles the Company shall
procure the waiver of all pre-emption provisions contained in the
Articles or elsewhere in respect of an allotment of the Exercised
Option Shares pursuant to the terms of this Agreement and the
registration of all allotments made in accordance with the terms
hereof.
6.5 The Company shall maintain and cause any Subsidiaries to maintain their
respective corporate existence and rights in full force and effect save
that the Company may dispose of or dissolve any Subsidiary where such
action shall in the reasonable opinion of the Company be in the Company's
best commercial interests. The Company shall as soon as it commences
trading maintain and cause each of its Subsidiaries to maintain as to
their respective properties and business, with reputable insurers,
insurance of the type and in such amounts as is usual for companies
carrying on businesses similar to the Company, including without
limitation employers liability, public liability, medical malpractice,
damage to property, personal injury or death and such other risks normally
insured against by other companies in the same or similar business, and
such other insurance as may be required by law.
6.6 Subject to the applicability of Clause 10 which is hereby acknowledged by
the First Optionholder and the Second Optionholders the Company shall
permit and cause any Subsidiaries to permit once only and in the period
prior to the Exercise one designated representative together with such
professional advisors as shall be reasonably required by and on behalf
of all the Optionholders (and not for the avoidance of doubt in respect of
each or any individual Optionholder) at their own expense to visit and
inspect any of the Company's properties and any Subsidiaries, examine
their books and take copies and extracts therefrom, discuss the affairs,
finances and accounts of the Company and its Subsidiaries with the
directors of the same at reasonable times and upon reasonable notice.
6.7 Neither the Company nor any Subsidiary shall become a party to any
agreement which by its terms restricts the Company's performance of this
Agreement or any other agreement to which it is a party referred to
herein.
6.8 Unless agreed otherwise between the parties hereto the Company shall not
pay to its management remuneration materially in excess of that
customarily paid to management in companies in businesses similar to the
Company provided that the
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<PAGE> 18
Company shall not be in breach of this obligation where such remuneration
is being paid in the best commercial interests of the Company in the
reasonable opinion of the Directors at the Exercise Date and has been
disclosed to the Optionholders under the provisions of this Agreement.
In the event, notwithstanding the foregoing, that remuneration materially
in excess of that customarily paid to management in companies in
businesses similar to the Company shall be paid to a Group Member or to an
employee, officer or shareholder of a Group Member, then the Company will
make a commensurate adjustment to the Valuation Multiple as set forth in
paragraph 1 of Schedule 4 hereto.
6.9 The Company shall use its reasonable endeavours to comply and cause any
Subsidiary to comply with all applicable laws, rules, regulations and
orders, noncompliance with which could materially adversely affect its
business or condition, financial or otherwise.
6.10 The Company shall use its reasonable endeavours to keep, and cause any
Subsidiary to keep, adequate records and books of account, in which
complete entries will be made in accordance with UK generally accepted
accounting principles consistently applied, reflecting all material
financial transactions of the Company and any Subsidiary, and in which,
for each financial year, all proper reserves for depreciation,
obsolescence, amortisation, taxes, bad debts and other purposes in
connection with its business shall be made.
6.11 The Company shall pay its creditors and meet its obligations in
accordance with the standard terms of payment and pay and discharge on
the due date all taxes, assessments and governmental charges or levies
imposed upon it or its income or profits or in respect of its property,
before the same shall become in default, as well as all lawful claims
for labour and supplies or otherwise which, if unpaid, might become a
lien or charge upon such properties or any part thereof provided however,
that the Company shall not be required to pay and discharge or cause to
be paid and discharged any tax assessment charge, levy or claim so long
as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and the Company shall set aside on its book such
reserves as are required under UK generally accepted accounting
principles with respect to any such tax, assessment, charge, levy or
claim so contested.
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<PAGE> 19
6.12 To the extent permitted by law or any rules of the Stock Exchange until
the Completion Date, the Company shall notify the Optionholders of the
following events as soon as reasonably practicable following the relevant
board approval of each such intended event:
(a) If the Company shall authorise or issue shares of any class or
series of equity securities convertible into any class or series
of equity securities.
(b) If the Company shall merge or consolidate into or with any other
company or sell all or substantially all of the Company's
assets, or sell pledge, license or otherwise dispose of assets
(tangible or intangible) of the Company for consideration of
more than 100,000 pounds sterling (other than licenses granted
or assets sold in the ordinary course of business).
(c) If the Company shall redeem, purchase or otherwise acquire any
shares of equity securities.
(d) If the Company shall pay or declare any dividend or
distribution, in cash, property or otherwise, on any shares in
the capital of the Company.
(e) If the Company shall voluntarily liquidate, dissolve or wind up
the Company or conduct any form of recapitalisation or
reorganisation of the Company.
(f) If other than in the ordinary course of its business the Company
shall incur any obligation involving payments or consideration of
more than 100,000 pounds sterling per year, except for short term
borrowings for working capital or borrowings to fund parts,
materials and labour costs to fill purchase orders.
(g) If the Company shall sell any equity or debt securities in any
Subsidiary of the Company to third parties.
(h) If the Company shall adopt any fundamental change to the Company's
business being changes which would result in more than 25% of the
Company's assets being deployed in, or gross revenues derived from,
businesses other than clinical laboratories or blood testing.
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<PAGE> 20
(i) If other than in the ordinary course of its business the Company
shall acquire any capital asset for more than 100,000 pounds
sterling and or make any investment in or acquire another business
entity in each case for consideration in excess of 500,000 pounds
sterling.
(j) If the Company shall sell or transfer any intangible property valued
in the Company's books for sums in excess of 100,000 pounds sterling
other than licenses granted in the ordinary course of business.
7. UNIHOLDING'S OBLIGATIONS
7.1 (a) For so long as the Company remains a Subsidiary of UniHolding,
UniHolding warrants and undertakes that the Company shall be the
only entity performing centralised European or multi national
clinical trials testing of UniHolding or any Group Member.
(b) The parties hereto hereby acknowledge that UniHolding may continue to
perform testing for non-centralised clinical trials testing, but
only as currently performed by UniHolding or its Subsidiaries other
than the Company, being tests not performed using the NDA Software
or NDA Concept as defined in the Cooperation Agreement dated
1 March 1995 made between the First Optionholder and UniHolding
including (without limitation) services provided by the CT plus
trading division of JS Pathology PLC, a Group Member. UniHolding
hereby acknowledges its intention to direct all its clinical trials
testing to the Company.
7.2 (a) Subject to Clause 7.2(b), UniHolding shall use its reasonable
endeavours to procure that the Company shall only enter into any
legally binding contract or other obligation with any Group Member
at a price which is broadly competitive in relation to the goods or
services the subject of such contract or obligation as that
generally available in the UK market place.
(b) In the event that the Company shall enter into any legally binding
contract or other obligation with any Group Member at a price which
is not broadly competitive in relation to the goods or services the
subject of such contract or obligation as that generally available
in the UK market place (or to the extent the contract or obligation
is to be performed outside the UK then
17
<PAGE> 21
in that market place) or exercises any power of control
exercisable by it in relation to the transfer of monies from the
Company to any Group Member in relation to the purchase and supply of
goods and services other than on an arms length basis at UK market
value or on terms more favourable to that Group Member than would be
reasonable to expect if such company had not been a Group Member then
the Company will make a commensurate adjustment to the Valuation
Multiple as set forth in paragraph 1 of Schedule 4.
7.3 UniHolding shall use its reasonable endeavours to procure that the
director appointed by it to the board of directors of the First
Optionholder pursuant to the Stock Purchase Agreement shall vote in
accordance with the then majority of that board (not counting in relation
to the constitution of any such majority the director appointed by
UniHolding) in relation to the exercise of the First Optionholders's
Option rights under this Agreement.
7.4 UniHolding warrants and undertakes that in the event of a distribution in
specie of the Company's shares to the shareholders of UniHolding or listing
of any share capital of the Company on the Stock Exchange or any other
recognised stock exchange or in any event where UniHolding is no longer the
majority shareholder of the Company, UniHolding will not and shall procure
that no other Group Member shall compete with the Company to provide
centralised European or multi national clinical trials testing for a period
of seven years from the date UniHolding has ceased to be the majority
shareholder of the Company or the date of such distribution in specie or
public offering of the Company to the shareholders of UniHolding as the
case may be.
8. TRANSFER OF OPTION SHARES AND ALLOTMENT
8.1 The Directors shall have the right to refuse to register the transfer of
any Shares to any person who in the absolute discretion of the Company is
deemed to be a competitor of the Company. Following the Completion Date
save as provided in Clause 8.2 no Optionholder shall be entitled to
transfer any Exercised Option Shares by way of sale or otherwise except
in accordance with the provisions of this Clause 8 or with the consent of
UniHolding.
8.2 Any Optionholder being a corporate or partnership entity may transfer all
but not
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<PAGE> 22
part only of its Exercised Option Shares in the Company to any partner or
shareholder of the partnership or corporate entity or to any other such
entity it controls, is controlled by or which is under common control
provided that if the transferee shall in less than a twelve month period
thereafter cease to be so associated (other than by means of a voluntary
solvent liquidation) then the transferring Optionholder shall procure that
the transferee forthwith transfers back to that Optionholder all of its
Exercised Option Shares. If such transfer is not made forthwith then,
without prejudice to any other rights and remedies hereunder, unless and
until such breach is rectified the Exercised Option Shares registered in
the name of the transferee which has ceased to be so associated as
aforesaid shall carry no rights whatsoever (whether under this Agreement,
the Articles or otherwise). If an Optionholder is an individual the same
provisions shall apply mutatis mutandis to any family member or corporate
entity or partnership controlled by the individual or relevant family
member of that Optionholder.
8.3 If any Optionholder desires to transfer its Exercised Option Shares
("the Transferor") to another person ("the Transferee") in accordance
with this Agreement then:
(a) in respect of any transfer made in accordance with Clause 8.2:
(i) the Transferor shall not be in any way relieved from any of its
obligations and liabilities under this Agreement and shall
procure that such the Transferee complies with all the
provisions of this Agreement as if it were party hereto; and
(ii) if there is a breach of this Agreement the Transferor will be
liable (without prejudice to the obligations of the Transferee
pursuant to the Deed of Adherence) as principal as if it
remained a party to the Agreement.
(b) on any transfer of Exercised Option Shares, the Transferor shall
procure that the Transferee enters into the Deed of Adherence with
the other Optionholder.
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<PAGE> 23
8.4 (a) If at any time other than pursuant to Clause 8.2, the Transferor
desires to sell all or any part of his Exercised Option Shares to any
person ("the Proposed Transferee"), the Transferor shall submit a
written offer ("the Transfer Notice") to sell such Exercised Option
Shares ("the Offered Shares") to the Company and UniHolding and,
subject to the right of first refusal of UniHolding in Clause 8.4(b),
to all the Optionholders other than the Transferor ("the Other
Optionholders") on terms and conditions, including price, not less
favourable to such offerees than those on which the Transferor
proposes to sell such Offered Shares to the Proposed Transferee. The
Transfer Notice shall be delivered simultaneously to the Company,
UniHolding and the Other Optionholders and shall disclose the
identity of the Proposed Transferee, the number of Offered Shares
proposed to be sold, the total number of Exercised Option Shares
owned by the Transferor, and all other terms and conditions,
including price, material to be known by a purchaser for value in
relation the proposed sale. The Transfer Notice shall further be
deemed to state that UniHolding or the Other Optionholders may
acquire, in accordance with the provisions of this Agreement, all but
not less than all of the Offered Shares for the price and upon the
other terms and conditions, including deferred payment (if
applicable), set forth therein.
(b) Subject to the first sentence of sub-clause (d) below, UniHolding
shall have the first right to purchase all of the Offered Shares, and
if UniHolding does not elect to purchase the Offered Shares, the
Other Optionholders shall have the right to purchase all of the
Offered Shares offered by the Transferor in accordance with the terms
of this section. In the event that any of the Other Optionholders
notify the Transferor of its intent not to purchase the Offered
Shares or does not respond within the time period provided in this
Clause, it or they shall not be entitled to purchase any of the
Offered Shares. Each of the Other Optionholders shall each have the
right to purchase its Pro Rata Share (hereafter defined) of the
Offered Shares provided however, that in the case where one or more
of the Other Optionholders do not complete the purchase of its or
their Pro Rata Share of the Offered Shares, then such of the Other
Optionholders who wish to so purchase shall have the right to
purchase its or their Pro Rata Share of
20
<PAGE> 24
the balance of the said Offered Shares and for this purpose, the
denominator of the fraction contained in the definition set forth
below of Pro Rata Share shall not include the holdings of any Other
Optionholder who does not purchase any of the Offered Shares. For
purposes of this Clause, "Pro Rata Share" shall mean the amount of
Offered Shares obtained by multiplying the total number of Offered
Shares times a fraction, the numerator of which shall be the number
of Shares then owned by the Other Optionholders entitled to purchase
the Offered Shares and the denominator of which shall be the
aggregate number of Shares then owned by all of the Other
Optionholders. For the purpose of this Clause, all of the Shares
which the Other Optionholders have the right to acquire from the
Company upon the conversion, exercise or exchange of any of the
securities of the Company then owned by the Other Optionholders shall
be deemed to be shares then owned by the Other Optionholders.
(c) Within 15 days after its receipt of the Transfer Notice, UniHolding
shall notify the Transferor by facsimile and, in any case, by
overnight express delivery in accordance with Clause 17 if it wishes
to purchase the Offered Shares. If UniHolding does not elect to
purchase the Offered Shares within such period, it shall promptly and
in no event later than two days after its decision not to accept the
Transfer Notice, notify the Transferor and the Other Optionholders as
to the availability of Offered Shares for purchase by the Other
Optionholders. The Other Optionholders shall, within 15 days of the
date of such notice, each notify the Transferor as to whether or not
they wish to buy the Offered Shares. Any failure on the part of
UniHolding or the Other Optionholders to provide a notice within the
respective periods set forth above shall be construed as a rejection
of the Transfer Notice by such party. Sales of the Offered Shares to
be sold to UniHolding or the Other Optionholders pursuant to this
Clause shall be completed at the offices of the Company on the
twenty-fifth day after the Transfer Notice was made if UniHolding
agrees to purchase the Offered Shares or on the fortieth day after
the date the Transfer Notice was submitted if the Other Optionholders
agree to purchase the Offered Shares, but if the said day is not a
Business Day, then on the next succeeding Business Day. Such sales
shall be effected by the Transferor's delivery to each purchaser of a
duly executed stock transfer form in respect of the Offered Shares
together with the share certificates in respect thereof
21
<PAGE> 25
and the free and clear of all claims by others, against payment to
the Transferor of the purchase price therefor in cash, by bankers
draft or telegraphic transfer from such purchaser.
(d) If UniHolding or the other Optionholders do not purchase the Offered
Shares, the Offered Shares may be sold by the Transferor at any time
within 90 days after the date the Transfer Notice was made, subject
to the provisions of this Agreement, including but not limited to
this Clause. Any such sale shall be to the Proposed Transferee at not
less than the price specified in the Transfer Notice and upon other
terms and conditions, if any, not more favourable to the Proposed
Transferee than those specified in the Transfer Notice. Any Offered
Shares not sold within such 90-day period shall continue to be
subject to the requirements of this Clause and shall be offered to
UniHolding or the Other Optionholders as above prior to the sale to
any purchaser.
8.5 The Directors shall refuse to register any proposed transfer of Exercised
Option Shares other than a transfer made pursuant to or permitted by the
foregoing provisions of this Clause 8.
8.6 Subject to the Exercise of either of the Options and until any listing of
the Shares on the Stock Exchange or any other international stock exchange
UniHolding shall procure that no special resolution is passed by UniHolding
waiving any rights of pre-emption attaching to the Shares of the Company.
Any of the Optionholders shall be entitled to renounce any rights to
allotment of Shares in favour of any other Optionholder.
9. GENERAL
9.1 Neither of the Options shall entitle the owner thereof to any voting
rights or other rights as a shareholder of the Company or to any other
rights whatsoever save for the express rights herein, and no dividends
shall be payable or accrue in respect of either of the Options or the
owners rights herein or the Option Shares until or unless, and except to
the extent that, such Option shall be exercised. No provision hereof, in
the absence of positive action by the Optionholders to Exercise either of
the Options, nor setting out of the Optionholders rights or privileges
hereunder shall give rise to any liability on any Optionholder as a
22
<PAGE> 26
shareholder of the Company whether such liability is asserted by the
Company or by its creditors.
9.2 In the event of any conflict between the terms of this Agreement and the
Articles the provisions of this Agreement shall prevail to the extent that
UniHolding shall if necessary in any case procure the amendment of the
Articles to the extent required to enable the Company and its affairs to
be administered as provided herein.
9.3 Each of the parties hereto shall pay its own costs incurred in the
preparation and implementation of this Agreement.
9.4 If an Optionholder dies prior to the Second Termination Date the Second
Option may be exercised after the date of his death at any time prior to
the Second Termination Date in accordance with the terms of this Agreement
and the parties hereto acknowledge that this Agreement shall be deemed to
bind the successors, heirs and personal representatives of the parties
hereto.
10. CONFIDENTIALITY
Save as shall be required by law or by the rules or regulations of the
Stock Exchange or any other international stock exchange the Optionholders
and any of them hereby undertake with the Company and UniHolding that they
will not without the prior written consent of UniHolding at any time
hereafter use, divulge or communicate to any third party other than their
respective professional advisors whose province it is to know the same,
any confidential information (other than information which may properly
come into the public domain through no fault of the Optionholders or any
of them) concerning the business, accounts, finance or contractual
arrangements or other dealings, transactions or affairs of the Company or
of UniHolding which may come to their knowledge as a result of entering
into this Agreement and they shall use their best endeavours to prevent
the publication or disclosure of any such confidential information
concerning such matters and on ceasing to be a shareholder of the Company
shall return all documents and copies of any such confidential information
that it has obtained to UniHolding.
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11. ASSIGNMENT
(a) Subject to Clause 11(b) this Agreement may be assigned by the
Optionholders to any other Optionholder, or any partner or shareholder of
such Optionholder where such Optionholder is a partnership or corporate
entity, in whole or in part prior to the Exercise Date without the prior
written consent of UniHolding but shall not otherwise be assigned.
UniHolding and the Company shall not be entitled to assign their rights
hereto except with the prior written consent of persons holding not less
than a majority in interest of the Options Shares.
(b) NDA and the Second Optionholders hereby warrant and undertake that in no
event shall the number of Second Optionholders exceed 49 which
restriction, warranty and undertaking is hereby acknowledged by NDA and
all the Second Optionholders and NDA and the Second Optionholders shall
fully indemnify and keep indemnified the Company for all costs, expenses
and liabilities whatsoever attributable to any breach of this clause 11(b).
12. ANNOUNCEMENTS
No announcement or circular in connection with the subject matter of this
Agreement shall be made by or on behalf of any party hereto without the
prior consent in writing of a majority in interest of the Optionholders and
the Company and UniHolding save that in the event that any party hereto is
required by law or by the rules or regulations of the Stock Exchange or
any other international stock exchange or by the Panel on Take-Overs and
Mergers to make any announcement or issue any circular any party hereto
may do so.
13. TIME OF THE ESSENCE
Time shall be of the essence as regards any date or period mentioned in
relation to the Exercise save only to the extent that any date or period
may be altered by mutual consent of a majority in interest of the
Optionholders and the Company and UniHolding whereupon time shall be of
the essence as regards such date or period as so altered.
14. WHOLE AGREEMENT & VARIATION
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<PAGE> 28
This Agreement and any document referred to herein constitutes the whole
agreement between the parties hereto and no modification, variation or
amendment of this Agreement shall be effective unless such modification,
variation or amendment is in writing and has been signed by or on behalf
of a majority in interest of the Optionholders and the Company
and UniHolding.
15. WAIVER
No waiver of any breach or default under this Agreement or any of the
terms hereof shall be effective unless such waiver is in writing and has
been signed by the party or parties against which it is asserted. No
waiver of any such breach or default shall constitute a waiver of any
other or subsequent breach or default.
16. NO PARTNERSHIP OR AGENCY
Save as expressly provided herein nothing in this Agreement shall
constitute a partnership between the parties hereto or constitute any one
the agent of another and none of the parties shall do or suffer anything
to be done whereby it shall or may be represented that it is the partner
or agent of a party hereto (save as aforesaid) unless such party is
appointed partner or agent of that other party subject to the consent in
writing of that party to this Agreement.
17. NOTICE
17.1 Any notice, information, document or consent as the case may be required
or authorised to be given or delivered hereunder (hereinafter called
"Notice") shall be in writing and shall be served personally or sent by
pre-paid registered airmail letter or facsimile transmission addressed to
the address or facsimile number of the relevant party or parties as
specified below or to such other address or facsimile number as any one of
the parties may from time to time notify to the other parties hereto for
this purpose by Notice:
(a) if to the First Optionholder:
Address: 260 Smith Street, Farmingdale, New York
11735, United States of America
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<PAGE> 29
Facsimile number: (516) 777 3904
Attention: President
(b) if to the Second Optionholders:
Address: Meltzer, Lippe, Goldstein, Wolf,
Schlissel & Sazer, P.C.
190 Willis Avenue
Mineola
New York
New York 11501
United States of America
Facsimile number (516) 747 0653
Attention: David I Schaffer Esq
(c) if to the Company:
Address: Bewlay House, 32 Jamestown Road, Camden,
London, England NW1 7BY
Facsimile number: 0171 333 8437
Attention: Managing Director
(d) if to UniHolding:
Address: 96 Spring Street
New York
New York
10012
United States of America
Facsimile number: (212) 925 2184
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<PAGE> 30
Attention: President
17.2 Any Notice served personally shall be deemed to have been given upon
such service, any Notice so posted by first class registered airmail
post shall be deemed to have been given 7 Business Days after the same
shall have been posted and any Notice by facsimile transmission shall
be deemed to have been given upon transmission and receipt of the
appropriate answerback. In proving delivery of any Notice hereunder it
shall be sufficient to prove that the letter or facsimile transmission
containing such Notice was properly addressed and as the case may be put
into the post as a pre-paid registered letter or despatched.
18. COUNTERPARTS
This Agreement may be entered into in any number of counterparts and by
the parties to it on separate counterparts, each of which when so
executed and delivered shall be an original, but all the counterparts
shall together constitute one and the same agreement. Any of the Second
Optionholders who do not so execute a counterpart within 60 days of this
Agreement being signed by the Company and UniHolding shall have no
rights hereunder.
19. GOVERNING LAW
This Agreement shall be governed by English law and the parties hereto
hereby submit to the non-exclusive jurisdiction of the English Courts.
20. FIRST OPTIONHOLDER'S AND SECOND OPTIONHOLDERS' REPRESENTATIONS
The First Optionholder and the Second Optionholders represent and
warrant to the Company that:
(a) they each are an "accredited investor" within the meaning of Rule
501 under the Securities Act of 1933 and each were not organised
for the specific purpose of acquiring the Option Shares;
(b) they have sufficient knowledge and experience in investing in
companies similar to the Company in terms of the Company's stage
of development
27
<PAGE> 31
so as to be able to evaluate the risks and merits of
their investment in the Company and they are able to financially
bear the risks thereof upon any investment so made;
(c) they have had the opportunity to discuss the Company's business,
management and financial affairs with the Company's management and
have taken such opportunity;
(d) if either of the Optionholders shall exercise one of the Options the
Option Shares being purchased by either the First Optionholder or the
Second Optionholders will be acquired for its or their own account
for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof;
(e) that each Optionholder understands that (i) the Option Shares have
not been registered under the Securities Act of 1933 by reason of
their issuance in a transaction exempt from the registration
requirements of the Securities Act of 1933 pursuant to Section 4(2)
thereof or Rule 505 or 506 promulgated under the Securities Act of
1933, (ii) the Exercised Option Shares must be held indefinitely
unless a subsequent disposition thereof is registered under the
Securities Act of 1933 or is exempt from such registration, (iii)
the Exercised Option Shares will bear a legend to such effect and
(iv) the Company will make a notation on its transfer books to such
effect.
(f) each Optionholder has made its own decision to execute this
Agreement and/or exercise any Option granted hereunder to purchase
any Option Shares and has not relied on the decision of any other
shareholders of the Company to execute this Agreement and/or
exercise any Option granted hereunder to purchase any Option Shares
in making its investment.
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<PAGE> 32
SCHEDULE 1
SECOND OPTIONHOLDERS
1 David Deutsch
2 Ronald Gambardella
3 Poly Ventures II Limited Partnership
4 Cain Brothers & Company, Incorporated
5 Jeffrey Prisco and John Reinert
6 Michael DiMarco
7 James Wagner
8 Janet Gambardella
9 Derek Deutsch
10 Brian Deutsch
11 Sanford Krieger
12 Mark Markbreiter
13 Robert Raucci
14 Gail Schneider
15 Melvin Novatt
16 Davstar II
17 Steven Berman
18 Arthur Fein
19 Long Island Venture Fund, L.P.
20 Lawrence Karlin
21 Dr. Merrill Goodman
22 Devra Lee Davis and Richard D Morgenstern
23 Eric Joss
24 NYS Science & Technology Foundation
24 Peter Joseph
26 Mark Schwartz
27 Robert Weinner
28 Steven Disman
29 Stanley Asnis
<PAGE> 33
SCHEDULE 2
INFORMATION CONCERNING THE COMPANY
The Company:
- -----------
Registered No: 2626808
Registered Office: Bewlay House, 32 Jamestown Road,
Camden, London NW1 7BY
Date and Place
of Incorporation: Cardiff: 5 July 1991
Class of Company: Private Limited
Directors: Paul Hoekfelt
James O'Donnell
Dominic Gibb
Name Commencement Date Remuneration Job Title Benefits
- ---- ----------------- ------------ --------- --------
James
O'Donnell 10 Aug 1995 Salary: 110,000 Chief Variable salary
pounds sterling Executive based bonus
pa subject
to achieving
performance
targets
Paul
Hoekfelt 10 Aug 1995 Consultancy Chief N/A
fee of 4,000 Operating
pounds sterling Officer
pm + expenses
Dominic Gibb 11 November 1993 N/A Director N/A
<PAGE> 34
Secretary: Dominic Gibb
Authorised Share Capital: 5,000,000 pounds sterling divided into
5,000,000 ordinary shares of 1.00 pounds
sterling each.
Issued Share Capital: 500,000 pounds sterling
Loan Capital: nil
Auditors: Arthur Andersen and Co, 1 Surrey Street,
London WC2R 2PS
Accounting Reference
Date: 31 May
Tax Residence: United Kingdom
<PAGE> 35
SCHEDULE 3
PARTICULARS OF UNIHOLDING
Name: UniHolding Grp.
Address: 96 Spring Street, New York, NY 10012
No of Ordinary Shares 500,000
held by the Sole
Shareholder:
<PAGE> 36
SCHEDULE 4
CALCULATION OF OPTION SHARES AND THE OPTION PRICE
1. Number of Option Shares for which the First Optionholder or Second
Optionholders shall be entitled to subscribe:
(a) First Optionholder:
The Option Shares to be allotted to the First Optionholder hereunder
shall be calculated as the number of Shares of the Company that
represents:
(i) the lower of twenty (20) per cent of the aggregate number of
Shares in the capital of the Company outstanding immediately
after the exercise of the Option (this number of Option Shares
being referred to as "the Maximum Option Shares"); or
(ii) the same percentage of the aggregate number of Shares in the
capital of the Company immediately after the Exercise as is
equivalent to the percentage arrived at by dividing (i) that
amount which is five sevenths of the aggregate value of the
investment made in the First Optionholder by UniHolding
pursuant to the Stock Purchase Agreement and NDA Option
Agreement ("the Company Investment") by (ii) that amount which
is the sum of (a) 2.688 ("the Valuation Multiple") times the
consolidated revenues of the Company and its Subsidiaries as set
forth in the Company's audited consolidated financial statements
for the fiscal year ended May 31 1997 (or if the fiscal year is
changed, to the fiscal year ended on the date which is closest
to, and not later than May 31 1997), less any indebtedness for
borrowed funds (excluding inter-group financing otherwise than
on arms length, trade creditors and capitalized leases of the
Company and its subsidiaries as set forth in such statements),
plus (b) the amount of the Company Investment (this number of
Option Shares being referred to as "the First Calculated
Option Shares").
For the avoidance of doubt the First Optionholder acknowledges that
in no circumstances shall it be entitled to a percentage shareholding
in the
<PAGE> 37
Shares of the Company in excess of twenty (20) per cent of the whole.
Sample calculations relating to the application of paragraph 1 hereof
are attached as Annexure 3 for information purposes.
(b) (Subject to Clause 2.2 of the Agreement) Second Optionholders:
The Option Shares to be allotted hereunder shall be calculated as the
number of Shares of the Company that represents:
(i) the lower of the Maximum Option Shares; or
(ii) the same percentage of the aggregate number of Shares in the
capital of the Company immediately after the Exercise as is
equivalent to the percentage arrived at by dividing (i) that
amount which is one half of the aggregate value of the
investment made in the First Optionholder by UniHolding
pursuant to the Stock Purchase Agreement and NDA Option
Agreement ("the Company Investment") by (ii) that amount which
is the sum of (a) the Valuation Multiple times the consolidated
revenues of the Company and its Subsidiaries as set forth in the
Company's audited consolidated financial statements for the
fiscal year ended May 31 1997 (or if the fiscal year is
changed, to the fiscal year ended on the date which is closest
to, and not later than May 31 1997), less any indebtedness for
borrowed funds (excluding inter-group financing otherwise than
on arms length, trade creditors and capitalized leases of the
Company and its Subsidiaries as set forth in such statements),
plus (b) the amount of the Company Investment (this number of
Option Shares being referred to as "the Second Calculated
Option Shares").
For the avoidance of doubt the Second Optionholders acknowledge that
in no circumstances shall they be entitled to an aggregate percentage
shareholding in the Shares of the Company in excess of twenty (20) per
cent of the whole Sample calculations relating to the application of
paragraph 1 hereof are attached as Annexure 3 for information
purposes.
2. Option Price per Option Share:
<PAGE> 38
(a) In the event that the Option Shares represent less than the
Maximum Option shares the Option Price shall be equal to the
Company Investment divided by the Option Shares.
(b) In the event that the Option Shares represent the Maximum Option
Shares the Option Price shall be calculated to the nearest 9th
digit as follows:
Option Price = A x (Nm / Nc)
-------------
Nm
where:
A is the Company Investment
Nm is the Maximum Option Shares
Nc is the First Calculated Option Shares if paragraph 1(a)
above applies or the Second Calculated Option Shares if
paragraph 1(b) above applies.
3. Adjustments:
(a) If, after the exercise of the Option and before the Termination
Date (provided this Option has not been theretofore exercised),
shares of any class of the Company other than Shares is delivered
as a scrip dividend on outstanding shareholdings, then in
addition to any shares issuable upon exercise of the Option the
holder thereof shall upon such exercise be entitled to receive
the same number of the shares of scrip dividend shares plus any
shares, securities or property issued upon any subsequent
exchange, replacement, subdivision or combination thereof, to
which the holder would have been entitled had the Option been
exercised immediately prior to such scrip dividend. No adjustment
in the Option Price shall be made merely by virtue of the payment
of a stock dividend specified in this paragraph.
(b) If after the exercise of the Option and before the Termination
Date (provided the Option has not been theretofore exercised),
the Company shall, by dividend or otherwise, distribute to
holders of its capital stock assets in liquidation or partial
liquidation, the Option Price shall be adjusted so that the same
shall equal the price determined by multiplying the Option Price
by a fraction of which the numerator shall be the current
<PAGE> 39
fair market value per share of all of the Shares of the Company on
the date fixed for the determination of shareholders entitled to
receive such distribution less then applicable fair market value
of the portion of the assets so distributed applicable to one Share
and the denominator shall be such current fair market value per
Share, such adjustment to become effective simultaneously with the
determination of the shareholders entitled to receive such
distribution.
(c) In case of any reclassification or change of the Company's Shares
(other than a change in par value, or from par value to no par value)
after the date of this Agreement but before the Termination Date
(provided the Option has not been theretofore exercised), or in case
of any consolidation or merger of the Company with or into another
corporation (other than a merger with another corporation in which
the Company is the surviving corporation and which does not result in
any reclassification or change of the Company's Shares other than a
change in any reclassification or change of Shares other than a
change in par value, or from par value to no par value, or from no
par value to par value) after the date of this Agreement and before
the Termination Date (provided the Option has not theretofore been
exercised), the Company or such successor corporation shall execute
and deliver to the holder hereof a new Option giving such holder the
right to exercise such new Option and procure upon such exercise, in
lieu of each Share theretofore to be issued and allotted upon
Exercise of the predecessor Option, the number and type of securities
into which the Shares theretofore issuable upon Exercise immediately
prior to such reclassification, change, consolidation or merger would
have been converted upon such reclassification, change, consolidation
or merger. Such new Option shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments
provided for in this paragraph 3(a). The provisions of this
paragraph 3(a) shall similarly apply to successive reclassification,
changes, consolidations and mergers.
(d) Upon each adjustment in the Option Price, the Option Shares into
which this Option may be converted shall be adjusted to the product
obtained by multiplying the number of Shares subject to the Exercise
of this Option immediately prior to the adjustment in the Option
Price by a fraction the numerator of which shall be the Option Price
immediately prior to such adjustment and the denominator of which
shall be the Option Price
<PAGE> 40
immediately thereafter.
(e) In the event of the occurrence of any event or transaction after the
date of this Agreement not contemplated by subparagraphs (a) through
(c) of this paragraph 3 that would require an adjustment to the
Option Price to remain consistent with the intent and purpose of this
paragraph 3 then the board of Directors shall make such adjustment
to the Option Price as they shall deem reasonable and consistent with
the intentions and purposes of this paragraph 3 and general
principles of equity.
(f) The Company will promptly send to each Optionholder upon request a
statement, certified by the Company's finance director setting forth
the Option Price as then adjusted, describing all adjustments in
number of Shares purchasable, and setting forth a brief statement of
the facts requiring such adjustments.
(g) In any case in which the provisions of this paragraph 3 shall require
that an adjustment shall become effective immediately after the
occurrence of any relevant event ("record date") the Company may
defer until the occurrence of such event allotting to the
Optionholder to the extent exercised after such record date and
before the occurrence of such event, the additional Shares to be
allotted upon such conversion by reason of the adjustment required
by such event over and above the Shares to be allotted upon such
Exercise before giving effect to such adjustment provided, however,
that the Company shall deliver to such Optionholder a due bill or
other appropriate instrument evidencing such Optionholder's right
to receive such additional Shares upon the occurrence of the event
requiring such adjustment, provided further that if such event does
not occur, the adjustment required by such event will be revoked,
effective as of such record date, and will have no effect.
4. Notice of Adjustments
Upon any adjustment of the Option Price or other adjustment pursuant to
paragraph 3, then and in each such case the Company shall give notice
thereof, by first class mail, postage prepaid, to the Optionholder, which
notice shall state the Option Price resulting from such adjustment, or
specify such other adjustment pursuant to paragraph 3, setting forth in
reasonable detail the method of
<PAGE> 41
calculation and the facts upon which such calculation is based, provided,
however, that such notice may be included in the notice to be sent
pursuant to Clause 6.1 of the Agreement.
<PAGE> 42
SCHEDULE 5
THE WARRANTIES
1. CAPACITY
1.1 The Company is duly incorporated and validly existing under the laws of
England and Wales.
1.2 The Company has power to enter into this Agreement and to perform the
obligations expressed to be assumed by it and has taken all necessary
corporate action to authorise the execution, delivery and performance of
this Agreement.
1.3 This Agreement has been duly executed by the Company.
1.4 The performance of the terms of this Agreement or any other agreement
referred to herein by the Company will not violate any provision of:
(a) any known law or regulation or any known order or decree of any
authority, agency or court binding on the Company;
(b) the Memorandum and Articles of Association of the Company;
(c) any loan stock, bond, debenture or other deed, mortgage, contract or
other undertaking or instrument to which the Company is a party and
each such agreement referred to in this paragraph 1.4 constitutes a
legal valid and binding obligation on the Company enforceable in
accordance with its respective terms.
2. SUBSIDIARIES, PARTNERSHIPS AND JOINT VENTURES
2.1 The Company has not now and has not since its incorporation had any
Subsidiary nor has it agreed that it will at any time in the future have
any Subsidiary.
2.2 The Company has not since its incorporation been a subsidiary of any body
corporate (wherever incorporated) other than UniHolding.
2.3 The Company is not the owner or the registered holder of any share in or
other
<PAGE> 43
security of any body corporate wherever incorporated nor has it agreed to
become the owner or registered holder of any such share or security.
2.4 The Company is not a party to any partnership, joint venture, agency or
distributorship agreement.
3. CONDUCT OF BUSINESS, CONTRACTS, ETC.
3.1 No alteration will pending the Exercise be made to the Memorandum and
Articles of the Company, true and complete copies of which are attached
hereto as Annexure 1.
3.2 The Company has not acted or engaged in any transaction otherwise than
within the powers and in accordance with the provisions of its Memorandum
and Articles.
3.3 The Company is not a party to or subject to any agreement, transaction,
obligation, commitment, understanding, arrangement (contractual or
otherwise) or liability:
(a) which is of unusual or long term nature or involves obligations of a
material nature or magnitude; nor
(b) which is outside the ordinary and/or proper course of business of the
Company; nor
(c) which was entered into by the Company otherwise than by way of
bargain at arm's length; nor
(d) which it is incapable of performing or the performance of which is
likely to result in a loss to the Company or require undue or unusual
expenditure of money or effort; nor
(e) the duration, validity or terms of which will in accordance with its
terms be terminated or prejudicially affected by the sale of the
Option Shares pursuant to this Agreement or compliance with any other
provision hereof; nor
<PAGE> 44
(f) which is between the Company and any major distributor, customer or
supplier of the Company which is not terminable by the company on
less than 90 days notice without cost or other liability to the
Company;
(g) which is an agency or distributorship agreement which is not
terminable by the company on less than 90 days notice without cost
or other liability to the Company;
(h) which in relation to the Company's assets is a lease or a contract
for hire, rent, hire purchase or purchase by way of credit sale or
periodical payment or maintenance agreement by which the Company is
incurring an individual annual liability in excess of 75,000 pounds
sterling;
(i) which in respect of each individual contract requires an aggregate
consideration in excess of 75,000 pounds sterling per annum but
excluding any contract or contracts entered into by the Company in
the normal course of its business.
(j) which restrict the freedom of the Company to carry on its business
in any part of the United Kingdom or any other part of Europe in such
manner as it thinks fit, or purchase or supply or sell its materials
and services or products by such means and to such persons, and to
acquire materials, services and plant and equipment from such
persons, as it may from time to time;
(k) which gives or creates any option, right to acquire, mortgage,
charge, pledge, lien, (other than a lien arising by operation or law
in the ordinary course of trading) or other form of security of
encumbrance or equity on over or affecting the whole or any part of
the undertaking or assets of the Company and no claim has been made
by any person to be entitled to any of the same;
(l) by which the Company has contracted to guarantee any obligation for
borrowed money or otherwise;
(m) which, in relation to the purchase of fixed assets or for the future
purchase of materials, supplies or equipment is in excess of the
Company's normal or projected operating requirements.
<PAGE> 45
3.4 The Company is not a party to any joint venture, consortium or partnership
arrangement or agreement or a member of any unincorporated association
other than a recognised trade association.
3.5 The Company is not aware without having made any specific enquiry of any
breach of, or any invalidity or grounds for determination, recision,
avoidance or repudiation of, any agreement which the Company is a party
and the Company is not aware without having made any specific enquiry of
any breach or any anticipated breach of the other party to any contract
or agreement to which it is a party.
3.6 Since 31 May 1994 the Company has received no notice from any customer or
supplier terminating or threatening to terminate or materially reducing or
threatening to materially reduce its purchases from or the provision of
goods or services to the Company.
3.7 As at the date of this Agreement only, save as set out in Schedule 8
comprising a list of all the contractual commitments of the Company the
Company has not at the date of this Agreement entered into any material
binding contractual obligation, arrangement or liability with any third
party or Group Member.
4. SHARE CAPITAL
4.1 The Option Shares to be issued and allotted pursuant to this Agreement
will subject to the terms hereof be duly issued free of any pre-emption
rights.
4.2 The entire allotted and issued share capital of the Company at the date
hereof is as set out in Schedule 2 and all such shares are fully paid up.
4.3 Save as disclosed none of the Shares are subject to any encumbrance and
there are no agreements or arrangements or commitments to create any such
encumbrance.
4.4 Save as provided in this Agreement there are no agreements or instruments
in force to which the Company is a party which (whether conditionally or
unconditionally) require or confer the right to require the allotment or
issue of any share capital, stock, debenture, debenture stock, loan stock,
bonds or any other securities of any description of the Company now or at
any time in the
<PAGE> 46
future and no person is entitled to any option or other right in respect
of any of the Option Shares.
4.5 Save as provided in this Agreement there are no holders of shares,
warrants, options, convertible securities or any other current or
contingent rights to purchase or otherwise acquire equity securities or
other securities of any description.
4.6 Save as set out in the Accounts the Company has not since 31 May 1995 made
or paid, and is not proposing to make or pay, any dividend or distribution
and none of the reserves appearing in the Accounts are undistributable
reserves except to the extent stated in the Accounts.
5. ACCOUNTS AND RECORDS
5.1 The Balance Sheet (save as disclosed therein or in any note thereto) has
been prepared in accordance with UK generally accepted accounting
principles and practices for companies carrying on similar businesses and
the Balance Sheet gives a true and fair view of the state of affairs of
the Company at the dates and for the period to which it relates.
5.2 Since 31 May 1995 other than in the ordinary course of business there has
been no material and adverse change in the financial or trading position
of the Company and none of the turnover, the expenses (direct or indirect)
or the margin of profitability of the Company shows and material
deterioration by comparison with the turnover, expenses and margin of
profitability for the corresponding period in the last completed financial
period of the Company.
5.3 Since 31 May 1995 other than in the ordinary course of business the
Company has not made:
(a) any commitment made involving material capital expenditure by the
Company;
(b) any agreement or arrangement entered into or liability whether actual
or contingent incurred by the Company otherwise than for full value;
(c) any asset acquired or agreement entered into by the Company to
acquire
<PAGE> 47
any asset for a consideration higher than the market value thereof at
the time of acquisition.
(d) any acquisition or agreement for the acquisition by the Company of
any other business or body corporate or any part thereof or any share
or shares therein;
(e) except for full value any disposal of, or agreement entered into for
the disposal of, any of the assets of the Company;
(f) any repayment wholly or in part by the Company of any loan except
upon the due date for repayment;
(g) any issue of share or loan capital, stock, debenture, debenture
stock, bonds or any other securities, any increase in the authorised
share capital of the Company, any purchase or redemption by the
Company of any shares or other securities in the Company or any
reduction of the capital of the Company;
(h) any distribution by the Company (whether of capital of income) or
dividend or bonus declared or paid on any part of its share capital.
6. LITIGATION AND COMPLIANCE WITH LAW
6.1 There are not any claims or actions known to be pending against the
Company and the Company has received no notice that the Company or any
person for whose acts or omissions the Company is liable is involved in
any litigation, arbitration, prosecution or other legal proceedings or
threatened (except for debt collection of sums not exceeding in total
30,000 pounds sterling or for a sum not exceeding 10,000 pounds sterling
in the case of any one debt) therewith nor are there any circumstances
known to the Company likely to give rise thereto.
6.2 No notice has been received by the Company of any violation of any law,
order, ruling or regulation of the United Kingdom or any local laws in
consequence whereof an unfavourable judgment, decision, ruling or findings
would materially and adversely affect the business operations or financial
condition or income of the Company and in particular, but without
prejudice to the generality of the foregoing, the Company has received no
notice that it has committed any breach
<PAGE> 48
of the provisions of any of the Companies Acts or any regulation made
thereunder.
6.3 So far as the Company is aware without having made enquiry, no
investigation or enquiry is being or has been conducted by any UK
Governmental or other body in respect of the affairs of the Company.
6.4 All necessary licenses, consents, permits and authorities (public and
private) have been obtained by the Company to enable the Company to carry
on its business effectively in the places and in the manner in which such
business is now carried on and all such licences, consent, permits and
authorities are valid and subsisting and the Company has received no
notice that any of them may be suspended, cancelled or revoked or not
renewed in the ordinary course whether as a result of this Agreement or
for any other reason whatsoever.
7. TITLE TO PROPERTIES AND ASSETS
Save in respect of any properties and assets disposed of by the Company
in the ordinary course of its business since 31 May 1995 the Company has
good and marketable title to each of the properties and assets set out on
the Balance Sheet or acquired by it since 31 May 1995 and all such
properties and assets are free from all mortgages, charges, liens,
debentures (whether fixed or floating), leases, tenancies, options,
licences, conditions, agreements and claims or any other encumbrance
except for liens arising by operation of law in the normal course of
business or minor imperfections of title, if any, not material in nature
or amount and not materially detracting from the value or impairing the
use of the said properties or assets subject thereto or having a material
adverse impact on the operations of the Company.
8. CONTRACT COMMITMENTS AND OTHER ARRANGEMENTS
The Company has received no notice that it is in material breach of any
property lease or any credit sale, conditional sale or hire purchase
agreement or agreement reserving title to any other person or for payment
on hiring or deferred terms in relation to assets used in connection with
the Company's business and so far as the Company is aware without having
made any enquiry no other contracting party to any such lease or agreement
is in breach thereof and the Company has received no notice of any matters
or things which would materially adversely affect
<PAGE> 49
the Company's use and enjoyment of any such leasehold property or assets
for the purpose of the business now being carried on.
9. INSURANCE
The Company has in force insurances in respect of its property, assets and
business against such risks as are normally insured against by such
companies carrying on similar businesses.
10. TAXATION
10.1 The returns or computations which ought to have been made by or in respect
of the Company for any Taxation purposes have been made within the relevant
time limits and all such returns and any other notices, accounts and
information supplied to the Inland Revenue or HM Commissioners of Customs
and Excise or other fiscal authority concerned for any such purposes are up
to date, correct in all material respects and have been made on a proper
basis and the Company has received no written notice that any such returns,
notices, accounts or information is disputed in any material respect by any
fiscal authority concerned and there is no material fact known to the
Company which is likely to give rise to any such dispute or of any
liability to Taxation not provided for in the Accounts. For the purposes of
this Warranty "Taxation" means any liability to any form of taxation levied
or imposed and whether of the United Kingdom or elsewhere (and, without
limitation, includes income tax, corporation tax, advance corporation tax,
capital gains tax, inheritance tax, stamp duty, stamp duty reserve tax,
value added tax, withholding tax, customs and excise duties, National
Insurance contributions, social security and other similar liabilities or
contributions) and generally any amount payable to revenue, customs or
other fiscal authorities whether of the United Kingdom or elsewhere.
10.2 All Taxation for which the Company is liable and which ought to have been
paid at the Exercise Date has been paid and, without prejudice to the
generality of the foregoing, all income tax deductible and payable under
the PAYE system has so far as required been deducted from all payments
made by the Company and all amounts due to be paid by the Inland Revenue
and all deductions and payments required to be made by the Company in
respect of National Insurance contributions (including employer's
contributions) have been made.
<PAGE> 50
11. DIRECTORS AND EMPLOYEES
11.1 There are not outstanding any recognition or other agreements or
arrangements with any trade union or other body representing the
Company's employees.
11.2 There is no subsisting contract of service between the Company and any
director or employee or consultant which cannot be terminated without
giving rise to a claim for damages or compensation (other than a statutory
redundancy payment or statutory compensation for unfair dismissal) other
than normal termination payments and accrued holiday pay.
11.3 No director or employee of the Company is remunerated on a profit sharing,
incentive, bonus or commission basis and no such director or employee
receives the benefit of any life assurance or permanent health insurance
provided by the Company other than as provided to all directors or
employees of the Company.
11.4 Schedule 2 includes a list of the names of all the directors of the
Company including the date of commencement of their continuous period of
employment and all material terms of general application applicable to
their employment including any profit sharing incentive and bonus
arrangements to which the Company is a party.
11.5 No director, officer, employee or shareholder of the Company or any wife
or child of any such director, officer, employee or shareholder owns for
investment purposes more than 5% of any class of stock, shares or
debentures of any company whose shares are listed or dealt with on the
Stock Exchange, the Alternative Investment Market or a recognised
investment exchange as such term is defined in the Financial
Services Act 1986.
11.6 Since the date of this Agreement no director, officer or employee of the
Company has given or received notice terminating his employment.
11.7 The Company has not received any written notice that the Company has not
in relation to each of its employees complied with all obligations imposed
on it by Article 119 of the Treaty of Rome and all statutes, regulations
and codes of conduct relevant to the arrangements between it and its
employees or any recognised trade union if any, and there are no current
claims against the Company by or with respect to any of its employees.
<PAGE> 51
12. INTELLECTUAL PROPERTY
12.1 The Company does not own any Intellectual Property other than copyright
material arising in the normal course of its business and without
prejudice to the generality of the foregoing no employee is entitled to
any award or compensation in respect thereof under the Patents Act 1977.
12.2 All Intellectual Property used by the Company in connection with its
business is registered in the name of the Company as proprietor if such
Intellectual Property is capable of registration and no licences,
registered user or other rights in respect thereof have been granted to
any third party.
12.4 As regards any trade marks of the Company the Company has paid all renewal
and other fees or expenses which it is required to pay to ensure the
continuance in force of the registrations of the said trade marks.
12.5 All know-how and technical information used by the Company in connection
with its business is its sole property and no rights to the disclosure or
use thereof have been granted to any third party. Save in relation to the
Optionholders the Company has not disclosed (except in the ordinary course
of its business) any of its confidential know-how, trade secrets or list
of customers to any third party.
12.6 The Company has not received any notice that by carrying on its business
in the ordinary and usual course the Company infringes any industrial
property rights or Intellectual Property rights of any third party, become
liable to make any payment of any royalty or fee or become involved in the
unlicensed use of confidential information disclosed to the Company by any
third party in circumstances which entitle that person to make a claim
against the Company.
12.7 The Company does not use on its letterhead, brochures, sales literature or
vehicles, or otherwise carry on its business under, a name other than its
corporate name.
12.8 The Company has received no notice that any of the Intellectual Property
is being used, claimed, opposed or attached by any person.
<PAGE> 52
13. LOANS, GUARANTEES
13.1 Full and accurate details of all overdrafts, loans or other financial
facilities outstanding or available to the Company (other than advances or
loans made to employees of the Company in respect of reimbursement of
business expenses incurred in connection with their employment) will be
contained in the Second Disclosure Letter.
13.2 Other than in the ordinary course of its business no guarantee or
indemnity has been given or granted by the Company in respect of the
discharge of the liabilities or the performance of any of the obligations
(whether present or future) of any other person or any suretyship in
respect thereof.
<PAGE> 53
SCHEDULE 6
WARRANTY LIMITATIONS
The provisions of this Schedule shall operate to limit the liability of
the Company under and in respect of a claim under the provisions of
Clause 5 and Schedule 5 of this Agreement and references in this Schedule
to "hereof" and to "liability hereunder" shall be construed to refer to
such liability as appropriate.
1. The Company shall only be liable in respect of any claims brought by the
Optionholders for a breach of the Warranties if the liability in respect
of such claim or claims (together with the aggregate amount of liability
of the Company arising from previous claims if any) would exceed in
aggregate 35,000 pounds sterling (THIRTY FIVE THOUSAND POUNDS) in which
case the Company shall be liable for the whole and not just the excess
over that amount. No single claim may be made against the Company for a
breach of the Warranties where the amount so claimed in respect of that
claim does not exceed 3,500 pounds sterling (THREE THOUSAND FIVE
HUNDRED POUNDS) and that claim shall be disregarded for all purposes.
2. No liability shall attach to the Company in respect of a breach or claim
under the Warranties to the extent that:
2.1 such breach or claim arises as a consequence of a change in the law
or interpretation of the law or a change or withdrawal of any
previously published practice or concession of any tax authority
after the date hereof whether or not such has retrospective effect;
2.2 such breach or claim arises as the result of any provision or reserve
made in respect thereof in the Accounts being insufficient by reason
of any increase in rates of taxation after the date hereof or arises
as the result of the retrospective imposition of taxation as a
consequence of a change in the law enacted after the date hereof;
2.3 such breach or claim or the events giving rise to such breach or
claim would not have arisen but for an act, omission or transaction
of the Optionholders or any person connected with them affected after
the date hereof otherwise than in their ordinary course of business
as presently carried on;
<PAGE> 54
2.4 a provision, reserve or allowance in respect thereof is made in the
Accounts or to the extent that the subject matter of the breach or
claim was taken into account in computing the amount of any such
provision or reserve or such matter was specifically referred to in
the notes to the Accounts;
2.5 the amount by which any asset of the Company shall have been
understated in the Balance Sheet or Accounts less:
(a) any amount by which other assets have been over-stated in the
Accounts, and
(b) any amount by which any liabilities shall have been under-stated
therein;
2.6 any amount by which any liabilities of the Company shall have been
over-stated in the Balance Sheet or Accounts less:
(a) any amount by which any other liabilities shall have been
understated in the Accounts, and
(b) any amount by which any assets shall have been over-stated
therein;
3. In assessing the liability of the Company under the Warranties there shall
be taken into account any benefit accruing to the Optionholders as a
consequence of the relevant breach and further there shall be taken into
account the amount of any provision or reserve for liability within the
Accounts which has not been fully utilised at the date of claim but to the
extent so taken into account shall not thereafter be available as a
provision or reserve.
4. The Optionholders shall not be entitled to recover any sum in respect of
any claim for breach of any of the Warranties or otherwise obtain
reimbursement or restitution more than once in respect of any one breach
of the Warranties.
5. In the event of the Company having paid to the Optionholders an amount in
respect of a claim under the Warranties and at any time past, present or
in the future the Optionholders recover from a third party (including any
taxation authority or other competent authority) a sum which is referable
to that payment
<PAGE> 55
(whether by payment discount or otherwise) then the Optionholders shall
forthwith repay to the Company of so much of the amount paid by the third
party as does not exceed the sum paid by the Company to the Optionholders.
6. In the event that the Optionholders shall be in receipt of any claim which
might constitute or give rise to claim under the Warranties the
Optionholders shall as soon as reasonably practicable notify the Company
in writing giving full details as far as practicable and further any such
claim or anticipated claim which may be made shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to be withdrawn and
shall become fully barred and unenforceable in respect of the Warranties
at the expiration of twelve months from the date of giving notice of such
claim or anticipated claim unless legal proceedings in respect thereof
have been commenced by the issuing and service of such proceedings against
the Company. The Company shall be entitled to require the Optionholder
to take such reasonable steps or proceedings as the Company may reasonably
consider necessary in order to mitigate any claim under the Warranties and
the Optionholders shall act in accordance with any such requirements of
the Company subject to the Optionholders being indemnified by the Company
against all reasonable costs and expenses incurred in connection
therewith, provided that no claim hereunder shall be capable of being
brought by any Optionholder after the expiry of the limitation period
provided for in the statute of limitations applicable under Delaware Law.
7. Where a breach of the Warranties shall be in respect of a matter where the
Company shall be insured against any loss or damage arising therefrom, the
Optionholders shall not make any claim against the Company under the
Warranties without first allowing the Company a reasonable time to make a
claim against its insurers for compensation for such loss or damage
suffered and thereafter any claim against the Company shall be limited (in
addition to all other limitations on the Company's liability elsewhere
referred to herein) to the amount by which the amount of the loss or
damage suffered by the Optionholders as a result of such breach shall
exceed the compensation paid by the said insurers to the Company and
subsequently paid to the Optionholders.
8. If any claim under the Warranties shall arise by reason of some liability
of the Company which, at the time the claim is notified to the Company, is
contingent only, the Company shall not be under any obligation to make any
payment to the Optionholders in respect of such claim until the expiry of
12 months from the date
<PAGE> 56
on which such claim shall have been made and then only if after such time
the contingent liability shall become an actual liability save where the
Optionholders can prove that they have suffered loss notwithstanding that
the loss against the Company shall be contingent only in which case the
provisions of paragraph 10 below shall apply.
9. The Optionholders warrant to the Company that they have not relied on any
representation, warranty, covenant or undertaking of the Company or any
other person save for any representation, warranty, covenant or
undertaking expressly specified in this Agreement and that in relation
only to the period commencing with the First or Second Exercise Period and
expiring on the First or Second Termination Date (as the case may be) they
are not aware of any matter or thing which in their reasonable opinion may
be inconsistent with any of the Warranties or which would or may give rise
to any liability on the part of the Company pursuant to the Warranties.
The Optionholders acknowledge that no representation, warranty, covenant
or undertaking (whether express or implied, statutory or otherwise) made
or alleged to have been made by or on behalf of the Company in connection
with or arising out of the granting of the Option and which is not
contained in this Agreement shall give rise to any liability on the part
of the maker or makers thereof.
10. Nothing in this Schedule or in the Warranties shall be deemed to relieve
the Optionholders of any common law duty to mitigate any loss or damage
which they may respectively suffer in consequence of any breach by the
Company of the terms of this Agreement or in consequence of any matter
giving rise to a claim against the Company and without prejudice to the
generality of this Clause where the loss claimed by the Optionholders
relates to a diminution in the value of the Option Shares as a result of
any breach of warranty the Optionholders shall not take any action in
respect of such breach for a period of 3 months to allow such damages to
be reduced.
11. The Optionholders shall not be entitled to claim that any fact or
circumstances constitutes a breach of any of the Warranties if such fact
or circumstance has been disclosed in this Agreement, the Balance Sheet
and Accounts, the First Disclosure Letter (if any) or the Second
Disclosure Letter or any other letter, document or communication referred
to in this Agreement or in the First or Second Disclosure Letters provided
that it shall not be a defence to the Company to rely on a disclosure
at any subsequent date to the date the disclosure should
<PAGE> 57
have been made unless no loss has been occasioned by the lack of
disclosure in relation to the matter in question.
12. The Optionholders acknowledge and confirm that they have entered into this
Agreement solely on the basis of the Warranties and that all other
warranties and representations whether express or implied by statute,
common law or otherwise are excluded.
13. The Optionholders hereby warrant that at the Exercise Date when the
Warranties are deemed to be repeated, subject to the terms of this
Agreement, a liability shall only attach to the Company in respect of a
claim under the Warranties to the extent that the Optionholders have been
denied material adverse information in relation to the Company or that the
information provided to the Optionholders is misleading.
<PAGE> 58
SCHEDULE 7
FORM OF EXERCISE NOTICE
Company
Registered Office
Date
Dear Sirs
We, First Optionholder/Second Optionholders, refer to the Company Option
Agreement dated 19 and made between yourselves and ourselves and
to the Option granted by you to us thereunder.
We hereby give notice under and pursuant to clause 3 of the Company Option
Agreement that we exercise the Option granted by you to us in respect of
______ Option Shares at an Option Price of pounds sterling per
ordinary share.
Yours faithfully
For and on behalf of
First Optionholder/Second Optionholders
<PAGE> 59
SCHEDULE 8
LIST OF CONTRACTUAL COMMITMENTS
1. Sub-license Agreement dated 28 April 1995 made between Pharmasoft S.A. and
the Company (therein referred to as Uni Clinical Trials Ltd)
2. Assignment dated 19 September 1995 made between UniHolding and the Company
relating to the Marketing Agreement dated 28 February 1995 and made
between UniHolding and the First Optionholder together with that Marketing
Agreement.
3. Master Equipment Lease to be made between the Company and Barclays
Mercantile Business Finance Limited relating to Sun computer equipment.
4. Service Agreement dated 5 April 1995 made between the Company and Dr James
O'Donnell.
5. Service Agreement dated 16 May 1995 made between the Company and Paul
Hoeckfelt.
6. Service Agreements have been or are to be made between the following
employees and the Company: Sally Osmond, David Taylor, Nigel Bassindale,
Nicola Clark, Susan Lewis, Jamie McIver, Sanjiv Kanwar and Tim Saint.
(Where any of the employees are employed by J S Pathology PLC, a Group
Member, the costs are re-charged to the Company on a cost recovery basis).
<PAGE> 60
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto or
by their duly authorised representative the day and year first above written.
EXECUTED BY )
/s/ David Deutsch )
a duly authorised officer of )
NDA CLINICAL TRIAL SERVICES INC )
SIGNED BY )
DAVID DEUTSCH )
in the presence of: )
Name
Address
Occupation
SIGNED BY )
RONALD GAMBARDELLA )
in the presence of: )
Name
Address
Occupation
<PAGE> 61
SIGNED BY )
STANLEY ASNIS )
in the presence of: )
Name
Address
Occupation
EXECUTED BY )
/s/ Melanie Stapp )
a duly authorised officer of )
UNILABS CLINICAL TRIALS LIMITED )
EXECUTED BY )
/s/ Melanie Stapp )
the duly authorised officer of )
UNIHOLDING CORP. )
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE QUARTER ENDED AUGUST 31, 1995 AS
SUBMITTED IN ITS QUARTERLY REPORT ON FORM 10Q AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-START> JUN-1-1995
<PERIOD-END> AUG-31-1995
<CASH> 2,297
<SECURITIES> 0
<RECEIVABLES> 15,535
<ALLOWANCES> 0
<INVENTORY> 1,819
<CURRENT-ASSETS> 23,468
<PP&E> 32,843
<DEPRECIATION> 1,526
<TOTAL-ASSETS> 115,525
<CURRENT-LIABILITIES> 38,559
<BONDS> 0
<COMMON> 243
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 115,525
<SALES> 22,063
<TOTAL-REVENUES> 22,063
<CGS> 18,636
<TOTAL-COSTS> 18,636
<OTHER-EXPENSES> 585
<LOSS-PROVISION> (0)
<INTEREST-EXPENSE> (473)
<INCOME-PRETAX> 1,522
<INCOME-TAX> (403)
<INCOME-CONTINUING> 804
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 804
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
<PAGE> 1
Exhibit 99
PRESS RELEASE
From: UniHolding Corp.
New York, New York
For further information:
Melanie K. Stapp (New York)
(212) 219-9496
Bruno Adam (Geneva)
+(41) (22) 732-9411
FOR IMMEDIATE RELEASE
October 17, 1995
UNIHOLDING CORP. ANNOUNCES FURTHER EXPANSION
INTO CLINICAL TRIALS TESTING
New York, New York, October 17, 1995 -- UniHolding Corp. (NASDAQ: UHLD)
announced today that it has acquired a 17% equity interest in NDA Clinical Trial
Services Inc., a Delaware corporation ("NDA"), through a Stock Purchase
Agreement for an aggregate cash consideration of $1.2 million. UniHolding has an
option to increase its equity stake to 30% on or before May 31, 1998, based on a
formula linked to NDA's revenues.
Simultaneously, Unilabs Clinical Trials Ltd. ("UCT"), United Kingdom corporation
wholly owned by UniHolding, granted an option to NDA and NDA's stockholders to
subscribe to shares of UCT. The exercise of such option will be within certain
limits based on a formula linked to UCT's revenues, and will be contingent upon
UniHolding exercising its own option to purchase the additional 13% of NDA.
UniHolding, through UCT, together with NDA, provides a global service to the
pharmaceutical industry through their joint efforts in conducting clinical
trials evaluations on pharmaceutical products, utilizing similar procedures and
data management for use in clinical studies in the US and Europe.
Mr. Edgard Zwirn, Chairman and CEO, commented that, "Our investment in NDA is
reflects our belief that the clinical trials business offers a very significant
potential in Europe, and that it must however be approached as a global service
on both sides of the Atlantic. It further reinforces the alliance of two
strongly-committed partners with similar views and goals." Mr. Zwirn then went
on to say "Because we want UniHolding to continue concentrating on the European
clinical laboratory industry, and with a view to maximize present and future
values, we have concluded that the best financial strategy for both parties and
their shareholders is to effect a spin-off of the clinical trials business. We
are now working on the details of such an operation, including legal and tax
aspects, and I expect further details to be announced shortly."
UniHolding Corp. owns Unilabs Group Limited which provides laboratory testing
services in the United Kingdom and Switzerland through its principle operating
subsidiaries, United Laboratories Limited (UK) and Unilabs SA (Switzerland).
UniHolding also owns laboratories in Italy and Spain.
