<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 5, 1996
-------------------
EuroMed, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 0-27720 88-031770
-------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
Wilhelminakanaal Noord 6, NL 4902VR Oosterhout, The Netherlands
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 011-31-16-203-7440
---------------------------
<PAGE> 2
Reference is made to the Current Report on Form 8-K (the "Form 8-K") filed
by EuroMed, Inc. on July 19, 1996. The Item 7 of the Form 8-K is hereby
amended to read in its entirety as follows:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of business acquired in the
Transaction.(1)
(i) Consolidated Balance Sheet.
(ii) Interim Consolidated Balance Sheet.
(iii) Consolidated Statement of Income.
(iv) Interim Consolidated Statement of Income.
(v) Consolidated Statement of Cash Flows.
(vi) Interim Consolidated Statement of Cash Flows.
(b) Pro forma Financial Information for the Transaction.(1)
(i) Pro forma Condensed Balance Sheet.
(ii) Pro forma Condensed Consolidated Statement of Income.
(c) Exhibits.
The following is a list of exhibits filed as part of this Current
Report on Form 8-K:
Exhibit No. Description
----------- -----------
2.1 Stock Purchase Agreement dated as of June 19, 1996,
by and among Registrant, Purchaser, Doets,
Roozekrans, Mutarestes, Pluripharm and FDNW.(4)
2.2 Stock Purchase Agreement, dated as of June 19, 1996,
by and among Registrant, Purchaser, Doets and
Roozekrans.(1)
4.1 Restated Articles of Incorporation of the Company.(2)
4.2 Bylaws of the Company.(2)
2
<PAGE> 3
4.3 Specimen of Common Stock Certificate.(3)
10.1 Consulting, Management and Noncompetition Agreement,
dated as of July 5, 1996, by and between Purchaser
and Doets.(1)
10.2 Consulting, Management and Noncompetition Agreement,
dated as of July 5, 1996, by and between Purchaser
and Roozekrans.(1)
10.3 Consulting, Management and Noncompetition Agreement,
dated as of July 5, 1996, by and between Purchaser
and Hinnen.(1)
- ------------------------------
(1) Filed herewith.
(2) Previously filed as an exhibit to Registration No. 33-80801 on
Form S-1 and incorporated herein by reference.
(3) Previously filed as an exhibit to Amendment No. 1 to
Registration No. 33-80801 on Form S-1 and incorporated herein
by reference.
(4) Previously filed.
3
<PAGE> 4
1/13
Financial statements prepared
under US-Generally accepted
accounting principles of
Mutarestes B.V.
at Heerhugowaard
Velsen-Noord,
June 10, 1996
<PAGE> 5
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at Heerhugowaard 3457202-1995-637bf-4
INDEX Page
FINANCIAL STATEMENTS PREPARED UNDER US-GAAP
Financial statements
o Auditors' report 4
o Consolidated balance sheet 5
o Consolidated statement of income 6
o Statement of shareholders' equity 7
o Consolidated statement of cash flows 8
o Notes to the consolidated financial statements 9
<PAGE> 6
June 10, 1996
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at Heerhugowaard 3457202-1995-637bf-4
FINANCIAL STATEMENTS PREPARED
UNDER US-GAAP
(included on pages
4-13)
o Financial statements
<PAGE> 7
[DELOITTE & TOUCHE LETTERHEAD]
Page 4/13
To the Board of Directors of
Mutarestes B.V. at Heerhugowaard,
The Netherlands
June 10, 1996 L.M. van der Pal RA
AUDITOR'S REPORT
We have audited the consolidated balance sheets of Mutarestes B.V. as of
December 31, 1995 and 1994, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1995 (all expressed in Dutch Guilders). These consolidated
financial statements are the responsibility of Mutarestes' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the Netherlands and the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Mutarestes B.V. as of December 31,
1995 and 1994, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1995 in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE
<PAGE> 8
June 10, 1996
Mutarestes B.V. Page 5/13
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CONSOLIDATED BALANCE SHEET
(after appropriation of result)
<TABLE>
<CAPTION>
Notes December 31, 1994 December 31, 1995
----- --------------------------------------- ------------------------------------
DFL DFL
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents 2,784,778 7,059,432
-------------------------
Accounts receivable-trade 4,646,379 4,676,034
Other receivables 1 557,421 223,817
---------- ----------
5,203,800 4,899,851
Inventory 1,840,889 2,144,310
FIXED ASSETS
Tangible fixed assets
---------------------
Machinery and equipment 22,735 179,200
---------- ----------
Total assets 9,852,202 14,282,793
========== ==========
LIABILITIES
CURRENT LIABILITIES
Accounts payable 2,678,083 2,794,160
Payable to shareholders 2 1,597,259 3,685,259
Current tax liability 1,131,196 1,544,077
Other liabilities 3 4,317,664 5,963,103
---------- ----------
9,724,202 13,986,599
SHAREHOLDERS' EQUITY 4
Paid-up share capital *) 128,000 40,000
Retained earnings 0 256,194
---------- ----------
128,000 296,194
---------- ----------
Total liabilities and
shareholders' equity 9,852,202 14,282,793
========== ==========
</TABLE>
*) 200 shares are authorized, par value of Dfl 1,000 per share,
128 shares issues and outstanding as of December 31, 1994.
200,000 shares and authorized, par value of Dfl 1 per share,
40,000 shares issued are outstanding as of December 31, 1995.
<PAGE> 9
June 10, 1996
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at Heerhugowaard 3457202-1995-637bf-4
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Fiscal years ended
----------------------------------------------
Notes 1993 1994 1995
----- --------- --------- ---------
DFL DFL DFL
<S> <C> <C> <C> <C>
Sales 5 46,376,683 49,356,531 61,059,320
Discounts 7,251,626 7,755,417 10,395,751
Cost of sales 36,595,566 38,994,336 46,523,220
---------- ---------- ----------
2,529,491 2,606,778 4,140,349
Selling, general and 642,891 451,380 760,467
administrative expenses ---------- ---------- ----------
1,886,600 2,155,398 3,379,882
Net financial income and expenses 1,075,987 660,074 89,249
---------- ---------- ----------
OPERATING INCOME 2,962,587 2,815,472 3,469,131
Corporate income tax 1,063,553 1,004,175 1,212,937
---------- ---------- ----------
NET INCOME 1,899,034 1,811,297 2,256,194
========== ========== ==========
</TABLE>
<PAGE> 10
June 10, 1996
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STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Number of Total
ordinary Issued share Retained Unappropriated shareholders'
shares capitial earnings result equity
--------- ------------ -------- -------------- -------------
DFL DFL DFL DFL
<S> <C> <C> <C> <C> <C>
Balance at January
1, 1993 128 128,000 9,305,328 1,336,506 10,769,834
Appropriation result
1992 1,336,506 -1,336,506
Dividends paid to
shareholders -2,804,440 -2,804,440
Net income 1,899,034 1,899,034
------- ----------- ---------- -----------
Balance at December
31, 1993 128,000 7,837,394 1,899,034 9,864,428
Appropriation
result 1993 1,899,034 -1,899,034
Net income 1,811,297 1,811,297
Dividend paid to
shareholders -11,547,725 -11,547,725
------- ----------- ---------- -----------
Balance at December
31, 1994 128,000 - - 128,000
Return of capital -88,000 -88,000
Change in par value -128
of shares 40,000
Net income 2,256,194 2,256,194
Dividend paid to
shareholders -2,000,000 -2,000,000
------ ------- ----------- ---------- -----------
Balance at December
31, 1995 40,000 40,000 256,194 - 296,194
====== ======= =========== ========== ===========
</TABLE>
<PAGE> 11
June 10, 1996
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CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Fiscal years ended
-----------------------------------------
1993 1994 1995
-------- -------- --------
DFL 000 DFL 000 DFL 000
<S> <C> <C> <C>
Operating activities
- --------------------
Net income 1,899 1,811 2,256
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 47 41 50
Changes in assets and liabilities that
provided (used) cash:
Accounts receivable 161 (1,450) (30)
Inventory (182) (1,280) (303)
Other assets (70) 121 334
Accounts payable 99 295 116
Other accrued liabilities 32 2,167 2,058
--------- ---------- ----------
Cash provided by operating activities 1,986 1,705 4,481
--------- ---------- ----------
Investing activities
- --------------------
Increase in marketable securities (51) 7,711 -
Purchases of tangible fixed assets (2) (10) (206)
--------- ---------- ----------
Cash used in investing activities (53) 7,701 (206)
--------- ---------- ----------
Financing activities
- --------------------
Dividends paid to shareholders (2,804) (11,548) -
--------- ---------- ----------
(2,804) (11,548) -
--------- ---------- ----------
Increase (decrease) in cash and cash
equivalents (871) (2,142) 4,275
========= ========= ========
Summary
- -------
Increase in cash and cash equivalents (871) (2,142) 4,275
Cash and cash equivalents at beginning
of year 5,797 4,926 2,784
-------- -------- --------
Cash and cash equivalents at end of
year 4,926 2,784 7,059
======== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest - - -
Income taxes 694 249 550
</TABLE>
<PAGE> 12
June 10, 1996
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DESCRIPTION OF BUSINESS
- -----------------------
Mutarestes' operating company Pluripharm International has a primary business
of wholesale distribution of medicines. The companies' customers are primarily
located in the Netherlands. The companies' products are readily available and
the company is not dependent on a single supplier or a few suppliers.
GENERAL ACCOUNTING PRINCIPLES
- -----------------------------
The financial statements of Mutarestes B.V. have been prepared under the
historical cost convention.
PRINCIPLES OF CONSOLIDATION
- ---------------------------
The financial statements of Mutarestes B.V. and its wholly-owned subsidiaries
have been included in the consolidation. The consolidated financial statements
are prepared in accordance with the accounting principles as applied to
Mutarestes B.V. which are substantially the same as US-Generally accepted
accounting principles (US-GAAP). Included in the consolidation are:
- - Pluripharm International B.V. (Krommenie, The Netherlands)
- - B.V. Financieringsmaatschappij De Nieuwe Wereld (Amsterdam, The Netherlands)
All significant intercompany profits, transactions and balances have been
eliminated upon consolidation.
PRINCIPLES FOR THE VALUATION OF ASSETS AND LIABILITIES
- ------------------------------------------------------
ASSETS AND LIABILITIES
Current assets
Cash and cash equivalents
- -------------------------
Cash equivalents consist primarily of highly liquid investments, such as bank
deposits, with insignificant interest rate risk and original maturities of
three months or less on the date of acquisition.
Accounts receivable-trade
- -------------------------
The accounts receivable-trade are recorded at face value.
<PAGE> 13
June 10, 1996
Mutarestes B.V. Page 10/13
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Inventory
- ---------
Inventory is stated at the lower of cost (first-in, first-out method) or market
value.
Cost includes the net prices paid for materials purchased and freight
charges for freight.
Tangible fixed assets
- ---------------------
The tangible fixed assets of the subsidiaries have been valued at cost less
depreciation.
Depreciation is based on the estimated useful lives of the
corresponding assets and is calculated by applying fixed percentages to their
historical cost or historical book value.
The estimated useful lives are:
- - cars 4 years
- - furniture and equipment 4-5 years
Other assets and liabilities
- ----------------------------
Other assets and liabilities are stated at face value, unless otherwise
mentioned in the notes to the accounts. An evaluation of the fair market value
of the Company's debt and other liabilities does not result in a value
significantly different from face value.
Income taxes
- ------------
The Company's income tax liability has been determined under the provisions of
Statement of Financial Accounting Standards No.109 - Accounting for Income
Taxes. There are no net operating losses carried forward or temporary
differences between the book carrying amounts and the tax basis of assets and
liabilities at the relevant balance sheet date. If any of these two elements
occurs in the future a deferred tax amount will be calculated at the enacted
rate of taxation in The Netherlands.
PRINCIPLES FOR DETERMINATION OF FINANCIAL RESULTS
- -------------------------------------------------
The results are determined as the difference between sales and cost of sales
after deduction of the expenses for the year, calculated on the basis of the
aforementioned valuation principles. Revenues from sales are recognized upon
shipment.
Sales
Sales consist of the revenue of goods and services supplied exclusive of VAT.
<PAGE> 14
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Use of estimates
The preparation of the Company's consolidated financial statements in
conformity with generally accepted accounting principles necessarily requires
Management to make estimates and assumptions that affect the amounts of assets
and liabilities reported and disclosure of contingent assets and liabilities at
the balance sheet dates and the amounts of revenue and expense reported during
the fiscal year. Actual results could differ from these estimates.
<PAGE> 15
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NOTES TO SPECIFIC ITEMS OF THE FINANCIAL STATEMENTS
1 Tangible fixed assets
The accumulated depreciation amounts to Dfl 123,232 as of December 31, 1994 and
Dfl 68,448 as of December 31, 1995.
2 Payable to shareholders
<TABLE>
<CAPTION>
1994 1995
--------- ---------
DFL DFL
<S> <C> <C>
Dividend 1994 1,597,259 1,597,259
Dividend 1995 - 2,000,000
Return of paid-up
share capital - 88,000
--------- ---------
1,597,259 3,685,259
========= =========
3 Other liabilities
1994 1995
-------- --------
DFL DFL
Payable to customers 4,285,197 5,918,923
Other 32,467 44,180
--------- ---------
4,317,664 5,963,103
========= =========
</TABLE>
The amount payable to customers are volume-discounts which are payable
annually. A separate agreement has been made regarding these discounts, which
does not allow customers to offset amounts payable to the company by such
discounts.
4 Shareholders' equity
During 1995 the legal structure of the Company changed from a Dutch N.V.
(public limited) into Dutch B.V. (private limited company). This change of
legal structure was followed by a repayment of paid-up share capital and a
change of the nominal value of the shares. As of December 31, 1995 the issued
and fully paid-up share capital is Dfl 40,000.
<PAGE> 16
June 10, 1996
Mutarestes B.V. Page 13/13
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5 Sales
The sales are entirely realized in the Netherlands. No single customer
accounted for more than 10% of the company's sales in 1995, 1994 or 1993.
6 Contingent liabilities
Lease commitments involve an amount of Dfl 4,124 per month. The contract can
be cancelled taking into account a four month notice. The lease commitment for
1996 will be Dfl 49,500, 1997 Dfl 49,500, 1998 Dfl 49,500, 1999 Dfl 49,500,
2000 and following years Dfl 49,500 each year. The company and its
subsidiaries constitute a fiscal entity for corporate income taxes. Both the
company and its subsidiaries are liable for obligations which result from this
fiscal entity.
7 Subsequent events
Due to regulation of the Dutch Department of Health the selling prices of
pharmaceuticals decreased significantly as of June 1, 1996. Currently
management is not able to estimate the effect of this regulation, although
management does not expect no significant decrease of the gross margin, since
the majority of the price change will be transferred to the suppliers.
<PAGE> 17
EUROMED, INC.
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
(UNAUDITED)
In July 1996, EuroMed, Inc. (EuroMed) acquired all the outstanding
shares of Mutarestes B.V. (Mutarestes), a wholesale distributor of medicines in
the Netherlands, for $5,857,00 cash and 850,000 shares of EuroMed. The
acquisition of Mutarestes will be accounted for by EuroMed as a purchase
whereby the basis for accounting for the Mutarestes assets and liabilities will
be based upon their fair market values at the date of the acquisition.
The unaudited Pro Forma Condensed Combined Statement of Operations (Pro
Forma Income Statements) for the year ended December 31, 1995 and the six
months ended June 30, 1996 give pro forma effect to the acquisition of
Mutarestes (and other adjustments as described in the accompanying notes) as if
it had occurred on January 1, 1995. The Pro Forma Income Statements are based
on the historical results of operations of EuroMed and Mutarestes for the year
ended December 31, 1995 and the six months ended June 30, 1996. The Pro Forma
Condensed Combined Balance Sheet as of June 30, 1996 (Pro Forma Balance Sheet)
gives pro forma effect to the acquisition of Mutarestes as if it had occurred
on that date. The Pro Forma Income Statements and the Pro Forma Balance Sheet
and the accompanying notes (Pro Forma Financial Information) should be read in
conjunction with and are qualified by the historical financial statements of
EuroMed included in its Form 10-K for the year ended December 31, 1995 and Form
10-Q for the quarter ended June 30, 1996, and the historical financial
statements of Mutarestes and notes thereto appearing elsewhere herein.
The Pro Forma Information is intended for informational purposes only and is
not necessarily indicative of the future position or results of operations of
EuroMed after the acquisition of Mutarestes, or the financial position or the
results of operations of EuroMed that would have actually occurred had the
acquisition of Mutarestes been effected as of the date or for the periods
presented.
<PAGE> 18
EuroMed, Inc.
Pro Forma Condensed Combined Balance Sheet (Unaudited)
As of June 30, 1996
<TABLE>
<CAPTION>
Euromed
Euromed Mutarestes Pro forma Inc. on a pro
Inc. B.V. (A) adjustments forma basis
------- ---------- ----------- -------------
(in thousands)
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents 3,426 1,518 4,944
Trade accounts receivable 1,421 3,754 (108) (B) 5,067
Loan receivable 710 -- 710
Due from affiliated
companies and other
related parties 536 -- 536
Inventory 5,162 1,421 6,583
Other receivables and
prepaid expenses 275 359 634
Total current assets 11,530 7,052 (108) 18,474
Tangible fixed assets 382 87 469
Intangible assets 539 -- 10,796 (C) 11,335
------ ------ ------ ------
Total assets 12,451 7,139 10,688 30,278
====== ====== ====== ======
Liabilities
Current Liabilities
Loan payable 293 -- 293
Bank overdraft
Trade accounts payable 3,963 2,647 (108) (B) 6,502
Taxes payable 530 893 1,423
Due to affiliated companies
controlling interests and
other related parties 8 -- 8
Other payables and accrued
expenses 247 2,686 5,857 (C) 8,790
Total current liabilities 5,041 6,226 5,749 17,016
Long term debts 146 -- 146
Shareholders equity 7,264 913 4,939 13,116
0
0
------ ------ ------ ------
Total liabilities and
stockholders equity 12,451 7,139 10,688 30,278
====== ====== ====== ======
</TABLE>
<PAGE> 19
EUROMED, INC. AND SUBSIDIARIES
NOTES TO THE PRO FORMA BALANCE SHEET
(UNAUDITED)
(A) Represents the historical balance sheet information of Mutarestes. The
financial position of Mutarestes as of June 30, 1996 was translated
into US dollars using the exchange rate as of June 30, 1996 of
Dfl 1.7075 = US$1.00.
(B) Represents the elimination of intercompany balances between EuroMed and
Mutarestes.
(C) Adjusts the assets acquired and liabilities assumed in the acquisition
of Mutarestes to reflect the allocation of the estimated purchase
price. The resulting goodwill was calculated as follows:
<TABLE>
<S> <C>
Estimated purchase price: (in thousands)
Amount paid to be paid in cash 5,857
Issuance of 850,000 shares of EuroMed
with a fair market value at the date of
acquisition of $6.75 per share 5,737
Direct costs of acquisition 115
------
11,709
Less assets acquired:
Current assets 7,052
Other assets 87
Plus liabilities assumed:
Current liabilities 6,226
------
10,796
======
</TABLE>
<PAGE> 20
EUROMED INC.
PRO FORMA CONDENSED INCOME STATEMENT
YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Euromed
Euromed Mutarestes Pro forma Inc. on a pro
Inc. b.v. (A) adjustments forma basis
------- ---------- ----------- -------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Sales 32,978 31,539 (2,914) (B) 61,603
Cost of goods sold 29,622 28,962 (2,914) (B) 55,670
Gross profit 3,356 2,577 5,933
Selling, general and 540 (C)
administrative expenses 2,100 473 249 (F) 3,362
0
1,256 2,104 (789) 2,571
Interest (net) (48) 56 8
Income before income
taxes 1,208 2,160 (789) 2,579
Income taxes 372 755 (87) (D) 1,040
----- ------ ----- ------
Net income 836 1,405 (702) 1,539
===== ====== ===== ======
Pro forma earnings
per share 0.38
======
Average shares 4,000 (E)
======
</TABLE>
<PAGE> 21
EUROMED, INC.
PRO FORMA CONDENSED COMBINED INCOME STATEMENT
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Euromed Mutarestes Pro forma Euromed
Inc. b.v. (A) adjustments Inc on a pro
forma basis
-------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Sales 17,876 17,704 (1,798) (B) 33,782
Cost of goods sold 16,185 16,177 (1,798) (B) 30,564
------ ------ ------ ------
Gross profit 1,691 1,527 -- 3,218
Selling, general and
administrative expenses 1,091 373 270 (C) 1,734
600 1,154 (270) 1,484
Interest (net) (48) 28 (20)
Income before income
taxes 552 1,182 (270) 1,464
Income taxes 189 427 616
------ ------ ------ ------
Net income 363 755 (270) 848
====== ====== ====== ======
Pro forma earnings
per share 0.21
======
Average shares 4,000(E)
======
</TABLE>
<PAGE> 22
EUROMED, INC. AND SUBSIDIARIES
NOTES TO THE PRO FORMA INCOME STATEMENT
(UNAUDITED)
(A) Represents the historical income statement information of Mutarestes.
The results of operations of Mutarestes for the year ended December 31,
1995 were translated into US dollars using the average exchange rate
for the year ended December 31, 1995 of Dfl 1.6064 = US$1.00. The
results of operations of Mutarestes for the six months ended June 30,
1996 were translated into US dollars using the average exchange rate
for the six months ended June 30, 1996 of Dfl 1.6740 = US$1.00.
(B) Represents the elimination of intercompany transactions between EuroMed
and Mutarestes.
(C) Represent the amortization of goodwill on a straight line basis over 20
years.
(D) Represents the income tax adjustments related to the pro forma
adjustments.
(E) Adjusted to reflect the issuance of 1,150,000 shares in the initial
public offering that occurred in March 1996 and the 850,000 shares
issued in the acquisition of Mutarestes as if it occurred in the
beginning of fiscal year 1996 and 1995, respectively.
(F) As of January 1, 1996, the management of Mutarestes receives a
management fee (included in the income statement ended June 30, 1996).
For comparison reasons a pro forma adjustment in 1995 has been made.
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EUROMED, INC.
Date: October 9, 1996 By: /s/ JAN BOUWMAN
------------------------------
Jan Bouwman
Chief Financial Officer,
Secretary & Treasurer
4
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
2.1 Stock Purchase Agreement dated as of June 19, 1996, by and among
Registrant, Purchaser, Doets, Roozekrans, Mutarestes, Pluripharm and
FDNW.(4)
2.2 Stock Purchase Agreement, dated as of June 19, 1996, by and among
Registrant, Purchaser, Doets and Roozekrans.(1)
4.1 Restated Articles of Incorporation of the Company.(2)
4.2 Bylaws of the Company.(2)
4.3 Specimen of Common Stock Certificate.(3)
10.1 Consulting, Management and Noncompetition Agreement, dated as of July
5, 1996, by and between Purchaser and Doets.(1)
10.2 Consulting, Management and Noncompetition Agreement, dated as of July
5, 1996, by and between Purchaser and Roozekrans.(1)
10.3 Consulting, Management and Noncompetition Agreement, dated as of July
5, 1996, by and between Purchaser and Hinnen.(1)
</TABLE>
- ------------------------------
(1) Filed herewith.
(2) Previously filed as an exhibit to Registration No. 33-80801 on
Form S-1 and incorporated herein by reference.
(3) Previously filed as an exhibit to Amendment No. 1 to
Registration No. 33-80801 on Form S-1 and incorporated herein
by reference.
(4) Previously filed.
5
<PAGE> 1
EXHIBIT 2.2
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement"), dated as of June 19, 1996, by
and among Dr. A. Doets ("Doets"), Dr. N. Th.P. Roozekrans ("Roozekrans")
(Doets and Roozekrans together hereinafter "the Shareholders"), EuroMed Europe
B.V., a Netherlands corporation ("Purchaser") and wholly-owned subsidiary of
EuroMed, Inc., a Nevada corporation ("EurOMed") and EuroMed.
W I T N E S S E T H:
WHEREAS, Shareholders hold together all of the issued and outstanding shares of
capital stock ("the Stock") of the Netherlands corporation Nydima B.V.
("Nydima") and N.T.P. Consult B.V. ("Consult") (Nydima and Consult together
also referred to as the "Companies"), which together hold all of the issued and
outstanding stock of the Netherlands corporation Mutarestes B.V.
("Mutarestes"), which in turn owns all of the issued and outstanding stock of
Pluripharm International B.V. ("Pluripharm"), which in turn owns all of the
issued and outstanding stock of De Nieuwe Wereld B.V. ("DNW") (Mutarestes,
Pluripharm and DNW together hereinafter to be referred to as the
"Subsidiaries"), and the Shareholders desire to sell and Purchaser desires to
purchase the Stock;
WHEREAS, this Agreement sets forth the conditions subject to which Purchaser
will purchase from the Shareholders all of the Stock;
<PAGE> 2
- 2 -
WHEREAS, in addition to this Agreement the Shareholders have in a separate
agreement (the Pluripharm Stock Purchase Agreement) agreed to sell to
Purchaser, by means of the present sale of the Companies, the stock in the
Subsidiaries;
WHEREAS, the Shareholders have personally assumed certain liabilities vis-a-vis
Purchaser and Purchaser and EuroMed have accepted certain liabilities vis-a-vis
the Shareholders as set out in the Pluripharm Stock Purchase Agreement in
relation to the Subsidiaries.
NOW, THEREFORE, in consideration of the mutual representations, warranties and
covenants herein contained, and on the terms and subject to the conditions
herein set forth, the parties hereto hereby agree as follows:
ARTICLE 1 PURCHASE OF THE STOCK
1.1 Subject to the terms and conditions contained herein and the
conditions precedent included in the Pluripharm Stock Purchase
Agreement, Purchaser agrees to purchase the Stock from the
Shareholders, and the shareholders agree to sell the Stock to
Purchaser at the Closing (as defined in the Pluripharm Stock Purchase
Agreement).
<PAGE> 3
- 3 -
1.2 The Stock consists of 40 shares with a par value of NLG 1,000 in the
capital stock of each of Nydima and Consult, which shares represent
all of the outstanding stock of Nydima and Consult.
ARTICLE 2 PURCHASE PRICE
The purchase price amounts to the aggregate of:
- - NLG 10,000,000;
- - 850,000 shares of EuroMed stock with a par value of $0.01;
- - the intrinsic value of the Stock decreased with the value of the
Subsidiaries as such value appears from the balance statement of the
Companies per 1 July 1996.
ARTICLE 3 THE PLURIPHARM STOCK PURCHASE AGREEMENT
3.1 In addition to the present agreement the parties have entered in the
Pluripharm Stock Purchase Agreement, which agreement sets out the
terms and conditions agreed between the parties in respect of the
Subsidiaries.
<PAGE> 4
- 4 -
ARTICLE 4 CLOSING
4.1 At the Closing:
- the Shareholders will deliver the Stock to Purchaser, by means
of the execution of a notarial deed to be executed by civil
law notaries Van Apeldoorn/Taselaar at Ede, the Netherlands,
- the purchase price will be paid and the EuroMed Stock will be
delivered to the Shareholders; such other actions will be
taken as have been agreed in the Pluripharm Stock Purchase
Agreement and as will be necessary to complete the
transactions envisaged by this Agreement and the Pluripharm
Stock Purchase Agreement.
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
5.1 With respect to the Subsidiaries the Shareholders make such
representations and warranties as have been set out in the Pluripharm
Stock Purchase Agreement,
5.2 With respect to the companies the Shareholders make such
representations and warranties and such promises to Purchaser as will
be required from Purchaser by B.V. Holding Maatschappij "De Hondsrug"
under paragraphs 3, 4, 5 and 6.5 of the draft
<PAGE> 5
- 5 -
"overeenkomst tot koop en verkoop van registeraandelen", which is
attached as Schedule 1 hereto.
ARTICLE 6 INDEMNIFICATION
The indemnification clauses in the Pluripharm Stock Purchase Agreement apply
equally to this Agreement, be it that in respect of the representations,
warranties and promises made by the Shareholders with respect to the Companies,
the restrictions of Article 12.03.(d) of the Pluripharm Stock Purchase
Agreement do not apply.
ARTICLE 7 ACKNOWLEDGEMENT
7.1 The parties acknowledge that the structure of the present transaction
is favoured by Doets and Roozekrans and has been chosen on their
request. Accordingly the Purchaser has agreed to acquire indirectly
the stock in the Subsidiaries by means of acquiring the stock in the
Companies, under the assumption that it will be able to sell and
transfer immediately upon completion of the present transaction the
Stock in the Companies at the intrinsic value thereof, after having
arranged for the divestment of the Subsidiaries by the Companies.
<PAGE> 6
- 6 -
7.2 It is acknowledged that any additional costs resulting from the fact
that the structure favoured by Doets and Roozekrans has been chosen
will be charged to Doets and Roozekrans and Doets and Roozekrans
undertake to reimburse Purchaser for such additional costs.
ARTICLE 8 CONSENT AS REFERRED TO IN ARTICLE 1:88 OF THE DUTCH
CIVIL CODE
8.1 By undersigning this Agreement the spouses of Doets and Roozekrans
hereby consent to Doets and Roozekrans entering into the present
transactions and to the entering into by Doots and Roozekrans of the
obligations and the making of the representations and warranties as
mentioned therein, such obligations including indemnification and hold
harmless provisions.
ARTICLE 9 PHARDIS
9.1 The parties acknowledge that Doets and Roozekrans each hold 20% shares
in the capital stock of the Netherlands corporation Phardis B.V.
Purchaser and EuroMed do not object to such shareholding.
<PAGE> 7
- 7 -
9.2 Doets and Roozekrans will consult with Purchaser before taking any
action in respect of their shares in Phardis B.V., such action to
include the sale of and the voting on such shares.
ARTICLE 10 ENTIRE AGREEMENT
10.1 This Agreement, together with the Pluripharm Stock Purchase Agreement
supersedes all previous agreements and understandings between the
parties concerning the subject matter thereof (including the letter of
intent dated 7 May, 1996 and the amendment thereto dated 23 May, 1996)
and constitutes the entire agreement between the parties with respect
to the subject matter thereof.
ARTICLE 11 CHOICE OF LAWS
11.1 This Agreement and the rights and obligations of the parties hereto
are governed by and construed and enforced in accordance with the
substantive laws of the Netherlands. Any dispute arising under this
Agreement shall be exclusively settled by the competent Court of
Arnhem, the Netherlands.
ARTICLE 12 NO RESCISSION
<PAGE> 8
- 8 -
12.1 All parties waive their rights to rescind the Agreement,
ARTICLE 13 TERMINATION
13.1 This Agreement shall automatically terminate upon the termination of
the Pluripharm Stock Purchase Agreement,
ARTICLE 14 GUARANTEE OF EUROMED
14.1 EuroMed guarantees the proper performance by Purchaser of its
obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first written above,
- -----------------------------------------
Dr. A. Doets
- -----------------------------------------
Dr. N. Th.P. Roozekrans
<PAGE> 9
- 9 -
- -----------------------------------------
EuroMed Europe B.V.
- -----------------------------------------
EuroMed, Inc.
For consent in accordance with Article 1:88 Dutch Civil Code
- -------------------------------------- -------------------------------------
spouse Mr. A. Doets spouse Mr. N. Th.P. Roozekrans
<PAGE> 1
EXHIBIT 10.1
Doc 2/
ref.: MS/MANAGEMENT.USU
MANAGEMENT AGREEMENT
The undersigned:
1. the closed corporation EUROMED EUROPE B.V., with registered office in
Oosterhout, legally represented in this matter by its statutory
director B.V. Wisteria, (hereafter called: "EuroMed B.V.");
2. the closed corporation in formation USUS NOTUS B.V. i.o., with
registered office in Westzaan, legally represented in this matter by
its organizer, Mr. A. Doets, (hereafter called: "Usus");
3. a. the closed corporation MUTARESTES B.V., with registered office
in Heerhugowaard, legally represented in this matter by its
statutory directors, Mr. A. Doets and Mr. N. Th. P.
Roozekrans, (hereafter called: "Mutarestes");
b. the closed corporation PLURIPHARM INTERNATIONAL B.V., with
registered office in Heerhugowaard, legally represented in
this matter by its statutory director, Mutarestes, (hereafter
called: "Pluripharm");
c. the closed corporation FINANCIERINGSMAATSCHAPPIJ DE NIEUWE
WERELD B.V., with registered office in Heerhugowaard, legally
represented in this matter by its statutory director,
Mutarestes, (hereafter called: "DNW");
Parties numbered 3.a. through 3.c. hereafter also indicated as: "the
Corporations"
TAKING INTO CONSIDERATION:
a. EuroMed B.V., as 100% subsidiary of the corporation under the laws of
the state of
11
<PAGE> 2
Nevada, United States, EUROMED INC. ("EuroMed"), is the Netherlands
holding company of EuroMed's operating companies;
b. EuroMed B.V. holds 100% of the shares in the closed corporations
Confedera B.V. ("Confedera") and Galenica B.V. ("Galenica") and 100%
of the shares in Mutarestes, which corporation in turn holds 100% of
the shares in Pluripharm, which corporation in turn holds 100% of the
shares in DNW;
c. Confedera, Galenica, and Pluripharm are the operating companies within
the EuroMed group which engage in the wholesaling of medicines;
d. EuroMed B.V. wishes to ensure, by entering into management agreements,
that executives are available who are responsible for the daily
management of its operating companies during a specified time;
e. In that connection, Usus is prepared and able to fulfill this need for
the benefit of Mutarestes and its subsidiaries Pluripharm and DNW, by
making a qualified executive available to Mutarestes on the following
conditions;
HAVE AGREED AS FOLLOWS:
Article 1 Activities
1.1 For the duration of this agreement (the "Agreement"), Usus shall make
a manager available to Mutarestes, i.e. Mr. A. Doets (hereafter
called: "Manager"). Mutarestes states that it agrees to this Manager
and to let him perform the activities which are specified in the
Agreement.
1.2 In the event that the Manager, for whatever reason, cannot perform his
activities, Usus can propose a replacement manager to Mutarestes.
Mutarestes shall inform Usus within
12
<PAGE> 3
one week in writing whether it agrees to the proposed replacement.
1.3 If it should be necessary for Mutarestes' conduct of business, EuroMed
B.V. shall consult with Usus if it is of the opinion that the nature
of the Manager's activities should be adjusted.
1.4 In view of the fact that the Manager is made available to Mutarestes
by Usus, the parties recognize expressly that the Manager is not in
the employ of Mutarestes, nor can be considered in any manner as an
employee of Mutarestes.
1.5 For the execution of its activities, Usus shall be named a statutory
director of Mutarestes, which corporation during the duration of this
Agreement shall continue to function as a statutory director of
Pluripharm and DNW. With regard to its activities as statutory
director, NTP shall be represented by the Manager, or by his
replacement.
1.6 Mutarestes pledges to grant to the Manager that authority and
cooperation which are required for the proper performance of his
activities.
Article 2 Compensation
2.1 Mutarestes shall compensate Usus for its activities f 200,000 per
year, excluding value added tax. Mutarestes shall pay the compensation
in four equal installments per year. Usus shall send an invoice to
Mutarestes once per quarter in which the activities of the Manager are
also explained. Mutarestes shall pay the invoice within 30 days.
It shall be further agreed among EuroMed B.V. and the Corporations, to
which of the Corporations the payment obligations arising from the
Agreement shall be charged.
2.2 Usus shall see to strict compliance with all obligations incumbent
upon it with regard to added tax and with regard to payroll tax and
social insurance premiums relating to the
13
<PAGE> 4
Manager. Usus shall indemnify Mutarestes with regard to all possible
claims by the tax authorities and/or the trade association against
Mutarestes in the event that they should take the position that
Mutarestes has a withholding or payment obligation with regard to the
Manager for payroll tax and/or social insurance premiums, including
increases, fines and interest.
2.3 If the Manager for whatever reason, during a period longer than two
weeks, cannot perform any activities for Mutarestes and no appropriate
replacement is provided, Mutarestes shall be released from its
obligation for payment of the compensation, effective the third week,
for the duration of the default, with the exception of compensation
for reasonably incurred expenses which have occurred despite the
absence of the Manager and which can no longer be reversed, provided
these expenses fall within the ordered activities.
Article 3 Duration of the Agreement
3.1 The Agreement shall take effect retroactively as of 1 January 1996 for
a period of 5 years and shall therefore terminate by action of law on
31 December 2000, without a requirement for any further action of the
parties.
3.2 Extension of the Agreement shall only be possible if the parties
decide on it in writing.
3.3 EuroMed B.V. and Usus can each cancel the Agreement in the interim,
with observance of a notice period of 6 months. Cancellation shall
occur by means of a registered letter addressed to the management of
the other party.
3.4 The Agreement can be cancelled with immediate effect if:
a. Usus or Mutarestes is declared bankrupt or if suspension of
payment is granted to Usus or Mutarestes;
14
<PAGE> 5
b. the Manager dies, is declared bankrupt or the Manager is
granted suspension of payment or, in the event of illness or
otherwise during a period of three consecutive months, the
Manager has not been able, for more than thirty-five days, to
fulfill the obligations of article 1 and Mutarestes has not
accepted Usus' offer pursuant to article 1.2.
3.5 Usus and Mutarestes shall have the authority to dissolve the Agreement
if a party to the Agreement does not comply with, or comply with on
time, or properly comply with, an obligation from the Agreement.
Article 4 Liability
4.1 Usus and the Manager shall not be liable to Mutarestes, as well as to
third parties, for damage which arises from the action or failure to
act of the Manager, performed within the formal sphere of his
authority, without prejudice to liability which arises from the
intentional or gross fault of Usus and/or the Manager.
4.2 Mutarestes releases Usus and the Manager in the event of liability of
Usus and/or the Manager to third parties for actions or failure to act
of the Manager, performed within the formal sphere of his authority,
unless the liability arises from the intentional or gross fault of
Usus and/or the Manager.
Article 5 Competition clause
5.1 Neither Usus nor its direct or indirect shareholder shall, during the
period from the effective date of the Agreement until five years after
the termination of the Agreement, conduct any activity, direct or
indirect, by means of a legal entity or otherwise, alone or in
cooperation with others, within the Benelux, which in any manner could
be in competition with the activities of Mutarestes, other than
activities with regard to having pharmacies. Neither Usus nor its
direct or indirect shareholder shall make any
15
<PAGE> 6
investments in competing companies. Interests existing at the time of
entering into this Agreement can be maintained.
5.2 Upon violation of the competition clause in article 5.1, Usus shall
owe a fine of f 1,000,000 per violation, with an increase of f 10,000
per day that the violation continues after notice of default. The
Manager shall be jointly and severally liable with Usus for this fine.
Article 6 Confidentiality requirement
6.1 Usus shall observe strict confidentiality during the period of the
Agreement and thereafter regarding all that which it shall learn
regarding the business and interests of Mutarestes and the companies
connected with Mutarestes, including particularly (but not limited to)
knowledge regarding the pricing used by Pluripharm and discounts and
relationships with customers.
6.2 Usus shall be required to impose this confidentiality requirement upon
the Manager and his replacements unabridged.
6.3 Regardless of the manner in which this Agreement is terminated, Usus
shall return all property of the Corporations to the Corporations,
including (but not limited to) all data carriers, copies, books and
documents which contain data from the Corporations.
Article 7 Obligation of the Manager
7.1 Usus shall guarantee that the provisions of articles 5, 6 and 8 shall
be correspondingly applicable to the Manager. As a sign of his
agreement to be bound by these articles, the Manager shall co-sign the
Agreement.
Article 8 Intellectual property
16
<PAGE> 7
8.1 The intellectual property rights with regard to new products developed
during the period of the Agreement by or in cooperation with Usus
shall rest with Pluripharm and, insofar as necessary, Usus shall
transfer these unconditionally to Pluripharm and they shall be
unconditionally accepted by Pluripharm.
8.2 Usus shall not in any manner, directly or indirectly, by means of
legal entities or otherwise, make use of the industrial property
rights which have been in the past or are now used by Pluripharm for
the conduct of Pluripharm's business.
Article 9 Invalid provisions
9.1 If one or more articles of the Agreement should be invalid or in
another manner not binding, the validity of the remaining articles of
the Agreement shall not thereby be affected. The parties shall then
adjust the Agreement in mutual consultation, such that the non-binding
articles shall be replaced by other provisions which differ as little
as possible from the relevant non-binding articles.
Article 10 Applicable law and choice of forum
Netherlands law shall be applicable to the Agreement. Any dispute which shall
arise from the Agreement shall be subject exclusively to judgment by the
authorized court in the District of Arnhem.
Article 11 Supplementary clauses
11.1 The Corporations accept joint and several liability for the payment
obligations of Mutarestes under the Agreement.
11.2 In the performance of the management activities, the reasonable
interests of the other operating companies of EuroMed B.V. will
continually be observed, such that the activities to be performed in
respect of the Agreement shall not be damaging to the other
17
<PAGE> 8
operating companies.
11.3 a. The Manager shall agree to consult regularly, but at least
once a month, with the management of Galenica and Confedera
regarding the state of affairs within the Corporations and the
policy to be carried out regarding the Companies.
11.3 b. Usus shall annually, at the latest on 1 December of a fiscal
year, develop a business plan in consultation with and for the
approval of the management of Galenica and Confedera, in which
the commercial objectives for the Corporations for the
following fiscal year shall be established (the "Business
Plan").
11.3 c. During a fiscal year, Usus shall carry out management and
policy with regard to the Corporations as much as possible in
accordance with the Business Plan.
11.3 d. If and insofar as Usus notices that the actual developments of
the Corporations are going to deviate from the Business Plan,
Usus shall notify the management of Galenica and Confedera of
this as quickly as possible. Then, in mutual consultation,
measures to be taken shall be decided on and, if necessary,
the Business Plan for the relevant year shall be modified.
11.4 Manager accepts that, with regard to the actions named below
concerning the Corporations, the express approval of the management of
Galenica and Confedera shall be required:
a. any substantial and/or fundamental change in the conduct of
business of the relevant Corporation, such as change in the
distribution and/or production strategy;
b. contracting with or dismissal of employees, or the adjustment
or changing of conditions of employment, other than providing
for the replacement of existing employees;
c. changing of bank relationships or of the conditions thereof
which have already
18
<PAGE> 9
been entered into by the relevant corporation;
d. entering into transactions which exceed the amount of f
100,000;
e. settling any claim which exceeds the amount of f
30,000;
f. acquiring or disposing of investments in other
corporations.
11.5 EuroMed B.V. agrees not to make any change in the statutory management
of the Corporations during the period of this Agreement.
11.6 EuroMed B.V. agrees, in its capacity of sole shareholder of
Mutarestes, that this Agreement shall be signed on behalf of
Mutarestes by its statutory directors A. Doets and N. Th. P.
Roozekrans.
Drawn up and signed in duplicate in Amsterdam on 5 July 1996.
1. EUROMED EUROPE B.V.
[signature]
(B.V. Wisteria)
2. USUS NOTUS B.V. I.O.
[signature]
(A. Doets)
(for him by power of attorney: N. Th. P. Roozekrans)
3.a. MUTARESTES B.V.
[signature] [signature]
(N. Th. P. Roozekrans) (A. Doets)
(for him by power of attorney)
19
<PAGE> 10
N. Th. P. Roozekrans
3.b. PLURIPHARM INTERNATIONAL B.V.
[signature]
(Mutarestes B.V.)
3.c. FINANCIERINGSMAATSCHAPPIJ DE NIEUWE WERELD B.V.
[signature]
(Mutarestes B.V.)
For articles 5.1, 5.2, 6, 8, 11.2, 11.3 and 11.4:
[signature]
A. Doets
(For him by power of attorney: N. Th. Roozekrans)
EuroMed, Inc. guarantees the compliance with this Agreement by EuroMed B.V. and
by the Corporations.
[signature]
(EuroMed, Inc.)
20
<PAGE> 1
EXHIBIT 10.2
Doc 1/
ref.: MS/MANAGEMENT.NTP
MANAGEMENT AGREEMENT
The undersigned:
1. the closed corporation EUROMED EUROPE B.V., with registered office in
Oosterhout, legally represented in this matter by its statutory
director B.V. Wisteria, (hereafter called: "EuroMed B.V.");
2. the closed corporation in formation N.T.P. ADVIES B.V. i.o., with
registered office in Bergen (North Holland), legally represented in
this matter by its organizer, Mr. N. Th. P. Roozekrans, (hereafter
called: "NTP");
3. a. the closed corporation MUTARESTES B.V., with registered office
in Heerhugowaard, legally represented in this matter by its
statutory directors, Mr. A. Doets and Mr. N. Th. P.
Roozekrans, (hereafter called: "Mutarestes");
b. the closed corporation PLURIPHARM INTERNATIONAL B.V., with
registered office in Heerhugowaard, legally represented in
this matter by its statutory director, Mutarestes, (hereafter
called: "Pluripharm");
c. the closed corporation FINANCIERINGSMAATSCHAPPIJ DE NIEUWE
WERELD B.V., with registered office in Heerhugowaard, legally
represented in this matter by its statutory director,
Mutarestes, (hereafter called: "DNW");
Parties numbered 3.a. through 3.c. hereafter also indicated as: "the
Corporations"
TAKING INTO CONSIDERATION:
a. EuroMed B.V., as 100% subsidiary of the corporation under the laws of
the state of Nevada, United States, EUROMED INC.("EuroMed"), is the
Netherlands holding company of EuroMed's operating companies;
1
<PAGE> 2
b. EuroMed B.V. holds 100% of the shares in the closed corporations
Confedera B.V. ("Confedera") and Galenica B.V. ("Galenica") and 100%
of the shares in Mutarestes, which corporation in turn holds 100% of
the shares in Pluripharm, which corporation in turn holds 100% of the
shares in DNW;
c. Confedera, Galenica, and Pluripharm are the operating companies within
the EuroMed group which engage in the wholesaling of medicines;
d. EuroMed B.V. wishes to ensure, by entering into management agreements,
that executives are available who are responsible for the daily
management of its operating companies during a specified time;
e. In that connection, NTP is prepared and able to fulfill this need for
the benefit of Mutarestes and its subsidiaries Pluripharm and DNW, by
making a qualified executive available to Mutarestes on the following
conditions;
HAVE AGREED AS FOLLOWS:
Article 1 Activities
1.1 For the duration of this agreement (the "Agreement"), NTP shall make a
manager available to Mutarestes, i.e. Mr. N. Th. P. Roozekrans
(hereafter called: "Manager"). Mutarestes states that it agrees to
this Manager and to let him perform the activities which are specified
in the Agreement.
1.2 In the event that the Manager, for whatever reason, cannot perform his
activities, NTP can propose a replacement manager to Mutarestes.
Mutarestes shall inform NTP within one week in writing whether it
agrees to the proposed replacement.
1.3 If it should be necessary for Mutarestes' conduct of business, EuroMed
B.V. shall consult
2
<PAGE> 3
with NTP if it is of the opinion that the nature of the Manager's
activities should be adjusted.
1.4 In view of the fact that the Manager is made available to Mutarestes
by NTP, the parties recognize expressly that the Manager is not in the
employ of Mutarestes, nor can be considered in any manner as an
employee of Mutarestes.
1.5 For the performance of its activities, NTP shall be named a statutory
director of Mutarestes, which corporation during the duration of this
Agreement shall continue to function as a statutory director of
Pluripharm and DNW. With regard to its activities as statutory
director, NTP shall be represented by the Manager, or by his
replacement.
1.6 Mutarestes pledges to grant to the Manager that authority and
cooperation which are required for the proper performance of his
activities.
Article 2 Compensation
2.1 Mutarestes shall compensate NTP for its activities f 200,000 per year,
excluding value added tax. Mutarestes shall pay the compensation in
four equal installments per year. NTP shall send an invoice to
Mutarestes once per quarter in which the activities of the Manager are
also explained. Mutarestes shall pay the invoice within 30 days.
It shall be further agreed among EuroMed B.V. and the Corporations, to
which of the Corporations the payment obligations arising from the
Agreement shall be charged.
2.2 NTP shall see to strict compliance with all obligations incumbent upon
it with regard to value added tax and with regard to payroll tax and
social insurance premiums relating to the Manager. NTP shall indemnify
Mutarestes with regard to all possible claims by the tax authorities
and/or the trade association against Mutarestes in the event that they
should take the position that Mutarestes has a withholding or payment
obligation with
3
<PAGE> 4
regard to the Manager for payroll tax and/or social insurance
premiums, including increases, fines and interest.
2.3 If the Manager for whatever reason, during a period longer than two
weeks, cannot perform any activities for Mutarestes and no appropriate
replacement is provided, Mutarestes shall be released from its
obligation for payment of the compensation, effective the third week,
for the duration of the default, with the exception of compensation
for reasonably incurred expenses which have occurred despite the
absence of the Manager and which can no longer be reversed, provided
these expenses fall within the ordered activities.
Article 3 Duration of the Agreement
3.1 The Agreement shall take effect retroactively as of 1 January 1996 for
a period of 5 years and shall therefore terminate by operation of law
on 31 December 2000, without a requirement for any further action of
the parties.
3.2 Extension of the Agreement shall only be possible if the parties
decide on it in writing.
3.3 EuroMed B.V. and NTP can each cancel the Agreement in the interim,
with observance of a notice period of 6 months. Cancellation shall
occur by means of a registered letter addressed to the management of
the other party.
3.4 The Agreement can be cancelled with immediate effect if:
a. NTP or Mutarestes is declared bankrupt or if suspension of
payment is granted to NTP or Mutarestes;
b. the Manager dies, is declared bankrupt or the Manager is
granted suspension of payment or, in the event of illness or
otherwise during a period of three
4
<PAGE> 5
consecutive months, the Manager has not been able, for more
than thirty-five days, to fulfill the obligations of article 1
and Mutarestes has not accepted NTP's offer pursuant to
article 1.2.
3.5 NTP and Mutarestes shall have the authority to dissolve the Agreement
if a party to the Agreement does not comply with, or comply with on
time, or properly comply with, an obligation from the Agreement.
Article 4 Liability
4.1 NTP and the Manager shall not be liable to Mutarestes, nor to third
parties, for damages which arise from the action or failure to act of
the Manager, performed within the formal sphere of his authority,
without prejudice to liability which arises from the intentional or
gross fault of NTP and/or the Manager.
4.2 Mutarestes releases NTP and the Manager in the event of liability of
NTP and/or the Manager to third parties for actions or failure to act
of the Manager, performed within the formal sphere of his authority,
unless the liability arises from the intentional or gross fault of NTP
and/or the Manager.
Article 5 Competition clause
5.1 Neither NTP nor its direct or indirect shareholder shall, during the
period from the effective date of the Agreement until five years after
the termination of the Agreement, conduct any activity, direct or
indirect, by means of a legal entity or otherwise, alone or in
cooperation with others, within the Benelux, which in any manner could
be in competition with the activities of Mutarestes, other than
activities with regard to having pharmacies. Neither NTP nor its
direct or indirect shareholder shall make any investments in competing
companies. Interests existing at the time of entering into this
Agreement can be maintained.
5
<PAGE> 6
5.2 Upon violation of the competition clause in article 5.1, NTP shall owe
a fine of f 1,000,000 per violation, with an increase of f 10,000 per
day that the violation continues after notice of default. The Manager
shall be jointly and severally liable with NTP for this fine.
Article 6 Confidentiality requirement
6.1 NTP shall observe strict confidentiality during the period of the
Agreement and thereafter regarding all that which it shall learn
regarding the business and interests of Mutarestes and the companies
connected with Mutarestes, including particularly (but not limited to)
knowledge regarding the pricing used by Pluripharm and discounts and
relationships with customers.
6.2 NTP shall be required to impose this confidentiality requirement upon
the Manager and his replacements unabridged.
6.3 Regardless of the manner in which this Agreement is terminated, NTP
shall return all property of the Corporations to the Corporations,
including (but not limited to) all data carriers, copies, books and
documents which contain data from the Corporations.
Article 7 Obligation of the Manager
7.1 NTP shall guarantee that the provisions of articles 5, 6 and 8 shall
be correspondingly applicable to the Manager. As a sign of his
agreement to bound by these articles, the Manager shall co-sign the
Agreement.
Article 8 Intellectual property
8.1 The intellectual property rights with regard to new products developed
during the period of the Agreement by or in cooperation with NTP shall
rest with Pluripharm and, insofar
6
<PAGE> 7
as necessary, NTP shall transfer these unconditionally to Pluripharm
and they shall be unconditionally accepted by Pluripharm.
8.2 NTP shall not in any manner, directly or indirectly, by means of legal
entities or otherwise, make use of the industrial property rights
which have been in the past or are now used by Pluripharm for the
conduct of Pluripharm's business.
Article 9 Invalid provisions
9.1 If one or more articles of the Agreement should be invalid or in
another manner not binding, the validity of the remaining articles of
the Agreement shall not thereby be affected. The parties shall then
adjust the Agreement in mutual consultation, such that the non-binding
articles shall be replaced by other provisions which differ as little
as possible from the relevant non-binding articles.
Article 10 Applicable law and choice of forum
Netherlands law shall be applicable to the Agreement. Any dispute which shall
arise from the Agreement shall be subject exclusively to judgment by the
authorized court in the District of Arnhem.
Article 11 Supplementary clauses
11.1 The Corporations accept joint and several liability for the payment
obligations of Mutarestes under the Agreement.
11.2 In the performance of the management activities, the reasonable
interests of the other operating companies of EuroMed B.V. will
continually be observed, such that the activities to be performed in
respect of the Agreement shall not be damaging to the other operating
companies.
7
<PAGE> 8
11.3 a. The Manager shall agree to consult regularly, but at least
once a month, with the management of Galenica and Confedera
regarding the state of affairs within the Corporations and the
policy to be carried out regarding the Corporations.
11.3 b. NTP shall annually, at the latest on 1 December of a fiscal
year, develop a business plan in consultation with and for the
approval of the management of Galenica and Confedera, in which
the commercial objectives for the Corporations for the
following fiscal year shall be established (the "Business
Plan").
11.3 c. During a fiscal year, NTP shall carry out the management and
policy with regard to the Corporations as much as possible in
accordance with the Business Plan.
11.3 d. If and insofar as NTP notices that the actual developments of
the Corporations are going to deviate from the Business Plan,
NTP shall notify the management of Galenica and Confedera of
this as quickly as possible. Then, in mutual consultation,
measures to be taken shall be decided on and, if necessary,
the Business Plan for the relevant year shall be modified.
11.4 Manager accepts that, with regard to the actions named below
concerning the Corporations, the express approval of the management of
Galenica and Confedera shall be required:
a. any substantial and/or fundamental change in the conduct of
business of the relevant Corporation, such as change in the
distribution and/or production strategy;
b. contracting with or dismissal of employees, or the adjustment
or changing of conditions of employment, other than providing
for the replacement of existing employees;
c. changing of bank relationships or of the conditions thereof
which have already been entered into by the relevant
corporation;
8
<PAGE> 9
d. entering into transactions which exceed the amount of f
100,000;
e. settling any claim which exceeds the amount of f 30,000;
f. acquiring or disposing of investments in other
corporations.
11.5 EuroMed B.V. agrees not to make any change in the statutory management
of the Corporations during the period of this Agreement.
11.6 EuroMed B.V. agrees, in its capacity of sole shareholder of
Mutarestes, that this Agreement shall be signed on behalf of
Mutarestes by its statutory directors A. Doets and N. Th. P.
Roozekrans.
Drawn up and signed in duplicate in Amsterdam on 5 July 1996.
1. EUROMED EUROPE B.V.
[signature]
(B.V. Wisteria)
2. N.T.P. ADVIES B.V. I.O.
[signature]
(N. Th. P. Roozekrans)
3.a. MUTARESTES B.V.
[signature] [signature]
(N. Th. P. Roozekrans) (A. Doets)
(for him by power of attorney)
N. Th. P. Roozekrans
9
<PAGE> 10
3.b. PLURIPHARM INTERNATIONAL B.V.
[signature]
(Mutarestes B.V.)
3.c. FINANCIERINGSMAATSCHAPPIJ DE NIEUWE WERELD B.V.
[signature]
(Mutarestes B.V.)
For articles 5.1, 5.2, 6, 8, 11.2, 11.3 and 11.4:
[signature]
(N. Th. Roozekrans)
EuroMed, Inc. guarantees the compliance with this Agreement by EuroMed B.V. and
by the Corporations.
[signature]
(EuroMed, Inc.)
10
<PAGE> 1
EXHIBIT 10.3
Doc 3/
ref.: MS/MANAGEMENT.WIS
MANAGEMENT AGREEMENT
The undersigned:
1. the closed corporation EUROMED EUROPE B.V., with registered office in
Oosterhout, legally represented in this matter by its statutory
director B.V. Wisteria, (hereafter called: "EuroMed B.V.");
2. the closed corporation B.V. WISTERIA, with registered office in
Arnhem, legally represented in this matter by its statutory director,
Pantapharma B.V. (hereafter called: "Wisteria");
3. a. the closed corporation GALENICA B.V., with registered office
in Bilthoven, legally represented in this matter by its
statutory director, B.V. Wisteria, (hereafter called:
"Galenica");
b. the closed corporation CONFEDERA B.V., with registered office
in Oosterhout, legally represented in this matter by its
statutory director, B.V. Wisteria, (hereafter called:
"Confedera");
Parties numbered 3.a. and 3.b. hereafter also indicated as: "the
Corporations"
TAKING INTO CONSIDERATION:
a. EuroMed B.V., as 100% subsidiary of the corporation under the laws of
the state of Nevada, United States, EUROMED INC.("EuroMed"), is the
Netherlands holding company of EuroMed's operating companies;
21
<PAGE> 2
b. EuroMed B.V. holds 100% of the shares in Confedera and Galenica and
100% of the shares in the closed corporation Mutarestes B.V.
("Mutarestes"), which corporation in turn holds 100% of the shares in
Pluripharm International B.V. ("Pluripharm"), which corporation in
turn holds 100% of the shares in Financieringsmaatschappij De Nieuwe
Wereld ("DNW");
c. Confedera, Galenica, and Pluripharm are the operating companies within
the EuroMed group which engage in the wholesaling of medicines;
d. EuroMed B.V. wishes to ensure, by entering into management agreements,
that executives are available who are responsible for the daily
management of its operating companies during a specified time;
e. In that connection, Wisteria is prepared and able to fulfill this need
for the benefit of Confedera and Galenica, by making a qualified
executive available to Confedera and Galencia on the following
conditions;
HAVE AGREED AS FOLLOWS:
Article 1 Activities
1.1 For the duration of this agreement (the "Agreement"), Wisteria shall
make a manager available to the Corporations, i.e. Mr. A. F. Hinnen
(hereafter called: "Manager"). The Corporations state that they agree
to this Manager and to let him perform the activities which are
specified in the Agreement.
1.2 In the event that the Manager, for whatever reason, cannot perform his
activities, Wisteria can propose a replacement manager to the
Corporations. The Corporations shall inform Wisteria within one week
in writing whether they agree to the proposed replacement.
22
<PAGE> 3
1.3 If it should be necessary for the Corporations' conduct of business,
EuroMed B.V. shall consult with Wisteria if it is of the opinion that
the nature of the Manager's activities should be adjusted.
1.4 In view of the fact that the Manager is made available to the
Corporations by Wisteria, the parties recognize expressly that the
Manager is not in the employ of the Corporations, nor can be
considered in any manner as an employee of the Corporations.
1.5 For the performance of its activities, Wisteria shall be named a
statutory director of the Corporations and during the duration of this
Agreement shall continue to function as a statutory director of the
Corporations. With regard to its activities as statutory director,
Wisteria shall be represented by the Manager, or by his replacement.
1.6 The Corporations pledge to grant to the Manager that authority and
cooperation which are required for the proper performance of his
activities.
Article 2 Compensation
2.1 The Corporations shall compensate Wisteria for its activities together
in total f 200,000 per year, excluding value added tax. The
Corporations shall pay the compensation in four equal installments per
year. Wisteria shall send an invoice to the Corporations once per
quarter in which the activities of the Manager are also explained. The
Corporations shall pay the invoice within 30 days.
It shall be further agreed among EuroMed B.V. and the Corporations, to
which of the Corporations the payment obligations arising from the
Agreement shall be charged.
2.2 Wisteria shall see to strict compliance with all obligations incumbent
upon it with regard to value added tax and with regard to payroll tax
and social insurance premiums relating to the Manager. Wisteria shall
indemnify the Corporations with regard to all possible
23
<PAGE> 4
claims by the tax authorities and/or the trade association against the
Corporations in the event that they should take the position that the
Corporations have a withholding or payment obligation with regard to
the Manager for payroll tax and/or social insurance premiums,
including increases, fines and interest.
2.3 If the Manager for whatever reason, during a period longer than two
weeks, cannot perform any activities for the Corporations and no
appropriate replacement is provided, the Corporations shall be
released from their obligation for payment of the compensation,
effective the third week, for the duration of the default, with the
exception of compensation for reasonably incurred expenses which have
occurred despite the absence of the Manager and which can no longer be
reversed, provided these expenses fall within the ordered activities.
Article 3 Duration of the Agreement
3.1 The Agreement shall take effect retroactively as of 1 January 1996 for
a period of 5 years and shall therefore terminate by operation of law
on 31 December 2000, without a requirement for any further action of
the parties.
3.2 Extension of the Agreement shall only be possible if the parties
decide on it in writing.
3.3 EuroMed B.V. and Wisteria can each cancel the Agreement in the
interim, with observance of a notice period of 6 months. Cancellation
shall occur by means of a registered letter addressed to the
management of the other party.
3.4 The Agreement can be cancelled with immediate effect if:
a. Wisteria or one of the Corporations is declared bankrupt or if
suspension of payment is granted to Wisteria or one of the
Corporations;
24
<PAGE> 5
b. the Manager dies, is declared bankrupt or the Manager is
granted suspension of payment or, in the event of illness or
otherwise during a period of three consecutive months, the
Manager is not able, for more than thirty-five days, to
fulfill the obligations of article 1 and the Corporations have
not accepted Wisteria's offer pursuant to article 1.2.
3.5 Wisteria and the Corporations shall have the authority to dissolve the
Agreement if a party to the Agreement does not comply with, or comply
with on time, or properly comply with, an obligation from the
Agreement.
Article 4 Liability
4.1 Wisteria and the Manager shall not be liable to the Corporations, as
well as to third parties, for damage which arises from the action or
failure to act of the Manager, performed within the formal sphere of
his authority, without prejudice to liability which arises from the
intentional or gross fault of Wisteria and/or the Manager.
4.2 The Corporations release Wisteria and the Manager in the event of
liability of Wisteria and/or the Manager to third parties for actions
or failure to act of the Manager, performed within the formal sphere
of his authority, unless the liability arises from the intentional or
gross fault of Wisteria and/or the Manager.
Article 5 Competition clause
5.1 Neither Wisteria nor its direct or indirect shareholder shall, during
the period from the effective date of the Agreement until five years
after the termination of the Agreement, conduct any activity, direct
or indirect, by means of a legal entity or otherwise, alone or in
cooperation with others, within the Benelux, which in any manner could
be in competition with the activities of the Corporations, other than
activities with regard to having pharmacies. Neither Wisteria nor its
direct or indirect shareholder shall make any
25
<PAGE> 6
investments in competing companies. Interests existing at the time of
entering into this Agreement can be maintained.
5.2 Upon violation of the competition clause in article 5.1, Wisteria
shall owe a fine of f 1,000,000 per violation, with an increase of f
10,000 per day that the violation continues after notice of default.
The Manager shall be jointly and severally liable with Wisteria for
this fine.
Article 6 Confidentiality requirement
6.1 Wisteria shall observe strict confidentiality during the period of the
Agreement and thereafter regarding all that which it shall learn
regarding the business and interests of the Corporations and the
companies connected with the Corporations, including particularly (but
not limited to) knowledge regarding the pricing used by the
Corporations and discounts and relationships with customers.
6.2 Wisteria shall be required to impose this confidentiality requirement
upon the Manager and his replacements unabridged.
6.3 Regardless of the manner in which this Agreement is terminated,
Wisteria shall return all property of the Corporations to the
Corporations, including (but not limited to) all data carriers,
copies, books and documents which contain data from the Corporations.
Article 7 Obligation of the Manager
7.1 Wisteria shall guarantee that the provisions of articles 5, 6 and 8
shall be correspondingly applicable to the Manager. As a sign of his
agreement to be bound by these articles, the Manager shall co-sign the
Agreement.
Article 8 Intellectual property
26
<PAGE> 7
8.1 The intellectual property rights with regard to new products developed
during the period of the Agreement by or in cooperation with the
Corporations shall rest with the Corporations and, insofar as
necessary, Wisteria shall transfer these unconditionally to the
Corporations and they shall be unconditionally accepted by the
Corporations.
8.2 Wisteria shall not in any manner, directly or indirectly, by means of
legal entities or otherwise, make use of the industrial property
rights which have been in the past or are now used by the Corporations
for the conduct of the Corporations' business.
Article 9 Invalid provisions
9.1 If one or more articles of the Agreement should be invalid or in
another manner not binding, the validity of the remaining articles of
the Agreement shall not thereby be affected. The parties shall then
adjust the Agreement in mutual consultation in the sense that the
non-binding articles shall be replaced by other provisions which
differ as little as possible from the relevant non-binding articles.
Article 10 Applicable law and choice of forum
Netherlands law shall be applicable to the Agreement. Any dispute which shall
arise from the Agreement shall be subject exclusively to judgment by the
authorized court in the District of Arnhem.
Article 11 Supplementary clauses
11.1 The Corporations accept joint and several liability for the payment
obligations of the Corporations under the Agreement.
11.2 In the performance of the management activities, the reasonable
interests of the other operating companies of EuroMed B.V. will
continually be observed, such that the
27
<PAGE> 8
activities to be performed in respect of the Agreement shall not be
damaging to the other operating companies.
11.3 a. The Manager shall agree to consult regularly, but at least
once a month, with the management of Mutarestes, Pluripharm
and De Nieuwe Wereld regarding the state of affairs within the
Corporations and the policy to be carried out regarding the
Corporations.
11.3 b. Wisteria shall annually, at the latest on 1 December of a
fiscal year, develop a business plan in consultation with and
for the approval of the management of Mutarestes, Pluripharm
and De Nieuwe Wereld, in which the commercial objectives for
the Corporations for the following fiscal year shall be
established (the "Business Plan").
11.3 c. During a fiscal year, Wisteria shall carry out the management
and policy with regard to the Corporations as much as possible
in accordance with the Business Plan.
11.3 d. If and insofar as Wisteria notices that the actual
developments of the Corporations are going to deviate from the
Business Plan, Wisteria shall notify the management of
Mutarestes, Pluripharm and De Nieuwe Wereld of this as quickly
as possible. Then, in mutual consultation, measures to be
taken shall be decided on and, if necessary, the Business Plan
for the relevant year shall be modified.
11.4 Manager accepts that, with regard to the actions named below
concerning the Corporations, the express approval of the management of
Mutarestes, Pluripharm and De Nieuwe Wereld shall be required:
a. any substantial and/or fundamental change in the conduct of
business of the relevant Corporation, such as change in the
distribution and/or production strategy;
28
<PAGE> 9
b. contracting with or dismissal of employees, or the adjustment
or changing of conditions of employment, other than providing
for the replacement of existing employees;
c. changing of bank relationships or of the conditions thereof
which have already been entered into by the relevant
corporation;
d. entering into transactions which exceed the amount of f
100,000;
e. settling any claim which exceeds the amount of f 30,000;
f. acquiring or disposing of investments in other corporations.
g. ending this Management Agreement in the manner stated in
article 3.3.
11.5 EuroMed B.V. agrees not to make any change in the statutory management
of the Corporations during the period of this Agreement.
11.6 EuroMed B.V. agrees, in its capacity of sole shareholder of the
Corporations, that this Agreement shall be signed on behalf of the
Corporations by their statutory director Wisteria.
Drawn up and signed in duplicate in Amsterdam on 5 July 1996.
1. EUROMED EUROPE B.V.
[signature]
(B.V. Wisteria)
2. B.V. WISTERIA
[signature]
(A. F. Hinnen)
3.a. GALENICA B.V.
29
<PAGE> 10
[signature]
(B.V. Wisteria)
3.b. CONFEDERA B.V.
[signature]
(B.V. Wisteria)
For articles 5.1, 5.2, 6, 8, 11.2, 11.3 and 11.4:
[signature]
A. F. Hinnen
EuroMed, Inc. guarantees the compliance with this Agreement by EuroMed B.V. and
by the Corporations.
[signature]
(EuroMed, Inc.)
30
