<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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 4, 1997
--------------------
EuroMed, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 0-27720 88-031770
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(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
Wilhelminakanaal Noord 6, NL 4902VR Oosterhout, The Netherlands
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 011-31-16-243-7440
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 5, 1996, the Company acquired Pluripharm, a pharmaceutical
wholesale company doing business in The Netherlands, from Messrs. Doets and
Roozekrans for the purchase price of 10,000,000 Dutch guilders and 850,000
shares of Common Stock. Shortly before such time, The Netherlands Senate
approved legislation that reduced the prices of pharmaceuticals significantly
(an average of 17.5%) to approximately the average prices for pharmaceuticals
in Belgium, France, Germany and Great Britain ("Maximum Price Law"). This
legislation determined by decree a maximum price for any registered
pharmaceutical. Therefore, the maximum price may not exceed the arithmetic
average of the pharmacy purchase prices of comparable pharmaceuticals in such
countries. The legislation established a prohibition on the sale of
pharmaceuticals to pharmacies at a higher price than the maximum price decree.
The basis for prices in the reference European Union member states is the
generally accepted price lists issued less than six months before the date of
the decree establishing the maximum price. No maximum price will be
established if comparable pharmaceuticals are quoted on the list of only one
reference country. The scope of the Maximum Price Law and the discretionary
power for the Minister to set a maximum price by decree is restricted to
pharmaceuticals, which in the opinion of the Minister should be available to
any person at the reasonable price. The maximum prices will be reviewed every
six months. The Company has pursued a complaint procedure against the Maximum
Price Law and the method of setting the maximum price for pharmaceuticals. The
effects of the Maximum Price Law combined with the Company's inability to
integrate Pluripharm's operations with those of the Company, prompted the
Company's Board of Directors to initiate a five-point restructuring plan, which
included the sale of Pluripharm (the "Sale").
The five-point restructuring plan consists of: (i) a settlement of all
claims between the Company and Messrs. Doets and Roozekrans, whereby they
returned 850,000 shares of Common Stock to the Company (on April 18, 1997 these
shares were returned to the Company and cancelled); (ii) the Sale, which took
place on July 4, 1997; (iii) the return of 850,000 shares of Common Stock by
B.V. Wisteria and its affiliates (which took place on July 4, 1997); (iv) a
plan to repurchase in the open-market 300,000 shares of Common Stock; and (v)
the undertaking of a new strategy of acquiring healthcare related companies or
assets outside of The Netherlands, including possible purchases of health care
companies or assets in the United States.
On July 4, 1997, the Company completed the Sale to Houdstermaatschapi
Singultus B.V. i.o. (the "Purchaser") for approximately 7,300,000 Dutch
guilders, of which 1,000,000 Dutch guilders are held in escrow (the "Escrow
Amount") pending stockholder ratification of the Sale. The acquisition
consideration for the transaction was determined by negotiations between the
parties. Stockholder ratification is not required by Nevada law, but is
required as a condition to the Company receiving the Escrow Amount. The Sale is
final and binding and, accordingly, failure of the Company to receive
stockholder ratification will not impact the consummation of the Sale, but will
prevent the Company from receiving the Escrow Amount.
2
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To the best knowledge of the Company, there is no material
relationship between Purchaser and the Company or any of its affiliates, any
director or officer of the Company, or any associate of such director or
officer.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of business sold 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 Assets and Liabilities Transfer Agreement by and
between Pluripharm International B.V. and
Houdstermaatschappij B.V. dated July 4, 1997.*
27.1 Financial Data Schedule.(1)
* Filed herewith
(1) It is impractical for the registrant to file such financial
statements and related financial data schedule at this time.
Such financial statements and related financial data schedule
will be filed under cover of Form 8-K/A as soon as
practicable, but no later than 60 days after the date by which
this report on Form 8-K was required to be filed.
3
<PAGE> 4
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: July 18, 1997 By: /s/ G. DAVID ANDERSON
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G. David Anderson
Chief Financial Officer
4
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
2.1 Assets and Liabilities Transfer Agreement by and between Pluripharm
International B.V. and Houdstermaatschappij B.V. dated July 4, 1997.*
27.1 Financial Data Schedule.(1)
</TABLE>
* Filed herewith
(1) It is impractical for the registrant to file such financial
statements and related financial data schedule at this time.
Such financial statements and related financial data schedule
will be filed under cover of Form 8-K/A as soon as
practicable, but no later than 60 days after the date by which
this report on Form 8-K was required to be filed.
5
<PAGE> 1
STIBBE SIMONT MONAHAN DUHOT
ASSETS AND LIABILITIES TRANSFER AGREEMENT
by and between
PLURIPHARM INTERNATIONAL B.V.
and
HOUDSTERMAAATSCHAPPIJ SINGULTUS B.V. i.o.
re.
PLURIPHARM INTERNATIONAL B.V.
STRICTLY CONFIDENTIAL
4, July, 1997
<PAGE> 2
STIBBE SIMONT MONAHAN DUHOT
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Article 1 - Definitions........................................... 2
Article 2 - Assets and Liabilities to be sold..................... 4
Article 3 - Purchase Price........................................ 8
Article 4 - VAT................................................... 9
Article 5 - Payment............................................... 9
Article 6 - Signing............................................... 12
Article 7 - Contracts............................................. 14
Article 8 - Employees and Pensions................................ 15
Article 9 - Post Signing Obligations.............................. 15
Article 10 - Representations and warranties....................... 17
Article 11 - Indemnity............................................ 21
Article 12 - Accounts............................................. 22
Article 13 - Conditions precedent................................. 23
Article 14 - Shareholders' Approval............................... 23
Article 15 - Waiver of right to rescind this Agreement............ 23
Article 16 - Assignability........................................ 24
Article 17 - Statutory Names...................................... 24
Article 18 - Expenses and taxation................................ 24
Article 19 - Governing law, jurisdiction and notice............... 24
Article 20 - Announcements........................................ 25
Article 21 - Confidentiality...................................... 26
Article 22 - Miscellaneous........................................ 26
</TABLE>
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STIBBE SIMONT MONAHAN DUHOT
ASSETS AND LIABILITIES TRANSFER AGREEMENT
THE UNDERSIGNED:
1. Pluripharm International B. V., a private company with limited liability
existing and organised under the laws of the Netherlands, with registered
office at Bevelandseweg 102-110, (1703 AX) Heerhugowaard, represented by
Mutarestes B. V., which company will be represented by File B. V., which
company will be represented by Mr. R. Veldman, hereinafter referred to as
"Vendor";
and
2. Houdstermaatschappij Singultus B. V. i. o., a private company with limited
liability in the process of being formed under the laws of the Netherlands,
with office at Heerhugowaard, the Netherlands, represented by Stichting
Administratiekantoor Hugo, which is represented by Mr. M. Rootring and Mr.
T. van den Berg, hereinafter referred to as "Purchaser";
WHEREAS:
A. The Vendor carries on the business of wholesale of pharmaceutical products
carried on at or from the Premises under the trade name Pluripharm
International (the "Business").
B. The Vender is a (indirectly) wholly owned subsidiary of EuroMed, Inc.
C. The Vendor has agreed to sell and the Purchaser has agreed to purchase the
Business with effect from 1 July 1997 subject to the terms and conditions
hereinafter appearing.
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STIBBE SIMONT MONAHAN DUHOT
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D. The Board of Directors of EuroMed, Inc. has approved the present
transaction as evidenced by Annex 1 hereto;
E. The directors of the Purchaser are familiar with the Business.
NOW IT IS HEREBY AGREED AS FOLLOWS:
Article 1 - Definitions
Wherever used in this Agreement the following expressions shall have
the following meanings unless the context requires otherwise.
"Accounts" : the audited balance sheet of the Business as at
the Effective Date including a list on the value of
Assets and Liabilities, per the Effective Date,
prepared, audited and made up in accordance with
generally accepted accounting principles in The
Netherlands and in accordance with the provisions of
article 12 of the Agreement;
"Agreement" : the present Assets and Liabilities Transfer
Agreement and the Schedules and Annexes thereto
attached;
"Assets: : the Assets as described in article 2.1 some of
which are further specified in Schedules:
"Book Value" : the value if assets as determined in the Accounts;
"Business" : the business carried on by the Vendor as defined in
Consideration A;
"Contracts" : the entire benefit of customer contracts, commitments,
arrangements and orders of the Vendor relating to the
Business which are wholly or
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STIBBE SIMONT MONAHAN DUHOT
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partly unperformed at the Effective Date, whether in
writing or not in writing, individually each a
"Contract";
"Effective Date" : 1 July 1997, being the date from which the Business
shall be continued at the expenses and risk of the
Purchaser and the date on which the Assets and
Liabilities are transferred in the manner provided for
in article 6;
"Employees" : all employees listed in Schedule 8.3.;
"Goodwill" : the Goodwill of the Business as calculated in
accordance with article 3.1.(f).
"Intellectual
Property Rights" : all intellectual property rights to which Vendor and
De Nieuwe Wereld B. V. are entitled, such as
trademarks, patents, service marks, trade and business
names, service marks, logos, copyrights, rights under
licenses and rights of the same or similar nature in
any part of the world (together with know-how, which
is described in article 2.1(g);
"Liabilities" : any and all liabilities as described in article 2.2
and which are specifically mentioned in Schedule 2.2;
"Licences" : all licences, permits and exemptions (vergunningen,
vrijstellingen en ontheffingen) granted by the
authorities to the Vendor, which are required to carry
on the Business;
"Policies" : all current insurance and indemnity policies relating
to the Business and the Assets;
"Premises" : the soil and buildings used by the Vendor in relation
to the Business as described in article 2.1(a) hereof;
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STIBBE SIMONT MONAHAN DUHOT
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"Purchase Price" : the purchase price for the sale and transfer
of the Business by the Vendor to the Purchaser as
described in article 3 of the Agreement;
"Receivables" : certain amounts payable to the Vender in
connection with the Business as at the Effective
Date together with all cheques, bills, notes and
securities issued for the Receivables;
"Shareholders'
approval" : the resolution of the shareholders in EuroMed,
Inc. authorising the execution, delivery and
performance of this Agreement and all related
documents and agreements, certified by Mr. R.
Dahlson, as being true and correct, copy of the
original thereof subject to no modifications or
amendments;
"Signing" : the undersigning of this Agreement;
"Signing Date" : 4 July 1997, being the date on which the Signing
takes place;
"Stocks" : all stocks of goods including - but not limited to
- pharmaceutical products, auxiliary materials
etc. printed matters and packaging etc., and work
in progress, owned by the Vendor and used in the
Business as at the Effective Date and located at
the Premises or elsewhere;
Article 2 - Assets and Liabilities to be sold
2.1 The Vendor as legal and beneficial owner hereby sells, free from any
charges and encumbrances of any nature whatsoever and the Purchaser
hereby purchases as a going concern with effect from the Effective
Date the Business as a going concern together with the properties and
assets, comprising of, but not limited to, the following Assets:
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STIBBE SIMONT MONAHAN DUHOT
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(a) the rights and obligations arising from the rental
agreements regarding the premises at Bevelandseweg,
Heerhugowaard, being the following rental agreements:
- between De Stichting S.M.T. and Pluripharm dated
May 1990 with regard to Bevelandseweg 94;
- between Stichting S.M.T. and Pluripharm, dated
15 March 1995 with regard to Bevelandseweg 96;
- between Stichting S.M.T. and Pluripharm, dated
May 1990 with regard to Bevelandseweg 102;
- between Stichting S.M.T. and Pluripharm, undated
with regard to Bevelandseweg 104;
- between Stichting S.M.T. and Pluripharm, dated
25 November 1988 with regard to Bevelandseweg
110;
- and in addition any rental agreement in relation
to Bevelandseweg 80a and 98.
(b) all inventory, included but not limited to office
furniture, racks, storage bins, fixtures, equipment,
(excluding the automation systems with accompanying
hard- and software, which are described hereunder in
article 2.1(n)), supplies, telephone system, inventory,
which are in or on the Premises, irrespectively of
whether being considered as moveables or immoveables
(for the purpose of the calculation of the Purchase
Price this shall be "Component A");
(c) the rights and obligations arising from the Contracts;
(d) the Goodwill of the Business (for the purpose of the
calculation of the Purchase Price this shall be
"Component F");
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STIBBE SIMONT MONAHAN DUHOT
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(e) the "Intellectual Property Rights" as defined in article
1;
(f) the Stocks, as defined in article 1 (for the purpose of
the calculation of the Purchase Price this shall be
"Component D");
(g) all know-how being all information not present in the
public domain owned by the Vendor or used or required to
be used by the Vendor in, or in connection with, the
Business held in any form (including without limitation,
that comprised in or derived from drawings, data,
formulae, specifications, instructions, manuals,
brochures, catalogues and process descriptions);
(h) the benefit of any sum to which the Vendor is entitled
either from third parties or insurers in respect of
damage or injury to property and assets agreed to be
sold and purchased hereunder, including all Receivables
(for the purpose of the calculation of the Purchase
Price the balance of this item, decreased with the
balance of the payables mentioned in article 2.2 shall
be "Component C");
(i) all other property and assets owned by the Vendor and
used in connection with the Business;
(j) cash in hand and at bank account numbers 47.161.60.744,
61.52.64.506 and 61.90.84.294 of Pluripharm and
43.68.25.619 of De Nieuwe Wereld B.V. (for the purpose
of the calculation of the Purchase Price this shall be
"Component E");
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STIBBE SIMONT MONAHAN DUHOT
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(k) administration, documents, bank documents, accounts, other
documentation, information with respect to the Business;
(l) the Licences;
(n) all computer-equipment and -programs including the rights and
obligations arising from all automation-related agreements with
third parties, such as suppliers of software (for the purpose of
the calculation of the Purchase Price this shall be "Component
B");
(o) all employees pertaining to the Business as specified in Schedule
8.3 hereto.
2.2 The Purchaser assumes from the Vendor no Liabilities other than the
payables, as explicitly listed on a list attached hereto as Schedule
2.2 which Schedule will be co-signed by Mr. M. Rootring.
2.3 Notwithstanding the Signing Date the parties agree that the Business
is transferred with effect as between the parties from the Effective
Date. Therefore, all income and expenditure/expenses of the Business
before the Effective Date are for the benefit of and shall be borne by
Vendor.
2.4 The Purchaser will indemnify the Vendor for all obligations arising
from the business of De Nieuwe Wereld B. V (in particular the
obligations to pay the rebates ("kortingen")) if these obligations
have their origin in the period before 2 June, 1997.
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STIBBE SIMONT MONAHAN DUHOT
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Article 3 - Purchase Price
3.1 The Parties have agreed that the Purchase Price for the
Business shall be the sum of:
(a) Component A: The Book Value as at the Effective Date;
(b) Component B: The Book Value as at the Effective Date;
(c) Component C: The Book Value as the Effective Date of
outstanding claims (including rebates) on
customers set off against the outstanding payments
to suppliers;
(d) Component D: The Book Value of the Stock as described in the
computer-administration of Vendor on 30 June 1997
on 19.00 hrs. (including payment - and other
rebates);
(e) Component G: The balance of both bank accounts on due date 1
July 1997 including correction of
interest-payments etc.;
and
(f) Component F: the balance of:
NLG 3,000,000 (three million Dutch Guilders) on
the assumption that the net profit after tax of
Vendor over the period as of 1 January, 1997 until
30 June, 1997 will be NLG 200,000.
If the net profit after tax will be less than NLG 200,000 the goodwill
amount of NLG 3,000,000 will be increased on a guilder for guilder basis.
If the net profit after tax will be more than NLG 200,000 the goodwill
amount of NLG 3,000,000 will be decreased on a guilder for guilder basis.
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STIBBE SIMONT MONAHAN DUHOT
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3.2 The Book Value of Components A, B, C, D and E to be paid to Vendor
by Purchaser pursuant to article 3.1 above, shall be determined in
the Accounts, in accordance with generally accepted accounting
principles in the Netherlands, and as consistent with the policies
and conventions currently applied by Vendor.
3.3 The Purchaser will pay the Purchase Price in the manner as provided
in article 5.
Article 4 - VAT
Since the present agreement concerns the transfer of a business enterprise,
the parties confirm that in The Netherlands no value added tax (BTW) shall
be payable on the purchase price pursuant to Section 31 of the Value Added
Tax Act (Wet op de omzetbelasting 1968).
Should nevertheless according to the competent tax authorities, value added
tax be payable by the Purchaser, other than of what the parties hereto
assume, the Purchase Price will be deemed to exclude such value added tax.
Therefore, Purchaser will pay Vendor upon its request such value added tax
if Vendor supplies relevant documents from which the obligation to pay such
value added tax appears.
Article 5 - Payment
5.1 The Purchaser will pay to the Vendor the Purchase Price as follows:
I.a. a first instalment of 90% of the sum of Components A, B,
C, D and E will be paid, upon receipt by Purchaser of the
computer-administration of Vendor evidencing the estimate
Book value of Components A,
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STIBBE SIMONT MONAHAN DUHOT
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B, C, D and E, as shown from the computer-administration
of Vendor (i.e. NLG 2,791,380.00), within one (1) day
after receipt of the computer-administration which will be
issued on the Effective Date, by telephonic transfer to
the bank account which will assigned by the Vendor; and
I.b. a second instalment which contains the difference between
on the one hand the Book Value of the Components A, B, C,
D and E as at the Effective Date appearing from the joint
statement which is drafted in accordance with article 12
hereof, and on the other hand the amount of the first
instalment as mentioned in article 5.1.(I)(a) hereof. The
second instalment will be paid within three (3) days after
receipt of the Accounts, by telephonic transfer to the
bank account which will assigned by the Vendor; and
II. Component F will be paid in two installments as follows:
a. NLG 2,000,000 (two million Dutch guilders) at the
Signing Date by telephonic transfer to the bank
account which will be assigned by the Vendor.
b. The balance of:
(i) the value of Component F, as determined
in accordance with article 3.1.(f),
minus
(ii) NLG 2,000,000 (two million Dutch
Guilders), which amount has been paid
under article 5.1.II.a.
shall be paid upon receipt by Purchaser of (i) the
Accounts and (ii) the Shareholders' Approval,
within three (3) days after receipt of both the
Accounts and Shareholders' Approval,
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STIBBE SIMONT MONAHAN DUHOT
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and subject to article 5.2, by telephonic
transfer to a bank account which will be
assigned by the Vendor.
5.2 The remaining amount of the Purchase Price as mentioned under
article 5.1. (II) . (b) shall be reduced with the following amounts
in the aggregate in case Purchaser has not received the
Shareholders' Approval:
before 1 September 1997: NLG 75,000
before 1 October 1997 : NLG 75,000
before 1 November 1997 : NLG 275,000
before 1 December 1997 : NLG 200,000
before 1 January 1998 : NLG 200,000
before 1 February 1998 : NLG 175,000
If the actual amount of the second instalment of Component F
(according to the balance of article 5.1.II.b) will be less than
the amount of the escrow account (see article 5.4) than the Vendor
will pay the difference to the Purchaser. If the afore mentioned
amount of the second instalment of Component F will be more than
the amount of the escrow account than the Purchaser will pay the
difference to the Vendor. Such payment will occur at the latest on
15 February, 1998.
5.3 In the event of the Vendor being in breach of or in default of this
Agreement, and such breach or default not being remedied within
thirty (30) days after receipt of written notice from the Purchaser
specifying the nature of the breach or default, the Purchaser may
(i) in case Vendor recognizes such claim set-off its claim against
the remaining amount of the Purchase Price as mentioned under
article 5.II.(b). or (ii) in case Vendor disputes such claim,
deposit the amount of the disputed claim with a civil law notary,
awaiting the outcome of
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STIBBE SIMONT MONAHAN DUHOT
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the disputed claim. The amount of the escrow account as mentioned
in article 5.4 will be deducted with the amount of the disputed
claim.
5.4 As security for payment of the remaining amount of the Purchase
Price as mentioned under article 5.1.(II).(b). Purchaser will open
on Monday 7 July, 1997 an escrow account at Mees Pierson in the
name of the Vendor for the amount of NLG 1,000,000 (one million
Dutch Guilders). It is being understood that the Vendor is not
entitled to the surplus in case the amount of the escrow account
exceeds the remaining amount of the Purchase Price as mentioned
under article 5.1.(II).(b).
Article 6 - Signing
6.1 The Signing shall take place at the offices of Stibbe Simont
Monahan Duhot, Strawinskylaan 2001, Amsterdam on Signing Date.
On or before the Effective Date the following actions shall be
taken:
(a) the Vendor shall give possession to the Purchaser of the
Assets and of all other tangible property hereby sold
which are transferable by delivery and by giving access to
the spaces where the Assets are, as well as by handing over
the keys; as far as the Assets are held by a third party
for the Vendor, the Vendor will transfer the Assets by
notifying, on behalf of the Purchaser as well, the third
party that the third party holds from Signing Date the
Assets for the benefit of the Purchaser;
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STIBBE SIMONT MONAHAN DUHOT
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(b) the Vendor and the Purchaser will to their best efforts
transfer the rights and the obligations arising from
the Contracts;
(c) the Vendor and the Purchaser will transfer the
Receivables as well as the benefit of any sum to which
the Vendor is entitled as referred to in article 2.1.
(h) by the notification of the assigned debtor by the
vendor;
(d) the Purchaser will assume from the Vendor the
Liabilities as referred to in Schedule 2.2 by obtaining
consent of the creditor of the Payables;
(e) the Vendor to its best efforts shall produce written
evidence that the relevant insurance companies will
cooperate in respect of the transfer of reserves and
other arrangements with the Vendor and with third
parties in respect of pension, early retirement and
other employee related arrangements;
(f) the Vendor shall deliver to the Purchaser all books,
records and data relating to the Business, including
but not limited to complete and accurate files
concerning the Employees, all past and present
customers and suppliers and other business contacts
and a list with Policies. The Vendor or its duly
authorised agent will be entitled to consult the
relevant books, records and data relating to the
Business applying to the period until the Effective
Date after notifying the Purchaser that such consult
is required by governmental authorities;
(g) the Vendor will assign and transfer to the Purchaser
as indicated by the Purchaser and in the
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STIBBE SIMONT MONAHAN DUHOT
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manner to be agreed on with the bank(s), all bank accounts
prior to Signing operated in the name of the Vendor in
connection with the Business;
(h) the Vendor shall transfer to the Purchaser the Licences;
6.2 Vendor shall in general do all such things which are necessary or
appropriate in order to transfer the Business in accordance with
any and all legal requirements and in accordance with this Agreement.
6.3 The Purchaser shall not be obliged to fulfil its obligations under this
Agreement unless the Vendor complies fully with its obligations under
Article 6.1.
Article 7 - Contracts
7.1 If the consent of the other party has not been obtained, (in respect of
the transfer mentioned in article 6.1.(b)) then the following
provisions shall apply:
(a) both before and after Signing the parties shall use their
respective best endeavours to obtain the consent of the other
party to the assignment of the Contract;
(b) until the consent is obtained, the Vendor shall do all such
acts and things as the Purchaser may reasonably require to
enable due performance of the Contract and to provide for the
Purchasers' benefit of the Contract (including, upon the
instruction and at the cost of Purchaser, enforcement of
any right of the Vendor against the other party to the
Contract);
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STIBBE SIMONT MONAHAN DUHOT
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7.2 The Vendor shall indemnify the Purchaser against all losses, liabilities
and costs which the Purchaser may incur arising out of, or as a
consequence of the performance of the Vendors' obligations under each
Contract to the extent that (i) such loss, liability or cost is
attributable to any act, default or omission of the Vendor and (ii) such
loss, liability or cost has its origin in the period as of 2 June, 1997
until the Effective Date.
Article 8 - Employees and Pensions
8.1 The Purchaser will forthwith notify the Employees that all the
employment agreements that are in force on Signing Date will continue
to be in force between the Purchaser, as the case may be, and the
respective Employees as from the Effective Date in accordance with
Articles 662, 663 and 666 of Book 7 of the Dutch Civil Code, as far as
Employees in the Netherlands are concerned.
8.2 The Vendor shall procure the transfer of reserves and other
arrangements with the Vendor and with third parties in respect of
pension, early retirement and other employee related arrangements,
including but not limited to bonuses, holiday allowance, holidays
accrued but not taken up, specified in Schedule 8.2 hereto to be
effected as set out in such Schedule 8.2 on Signing. With respect to
the built-up proportional pension rights of the Employees arising from
Article 8 of the Pensions and Savings Funds Act as per Signing Date,
the Vendor guarantees that these rights have fully funded and, if this
is not (yet) the case, that it will take full and immediate
responsibility for any current funding obligations relating to these
pension rights as per Effective Date.
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STIBBE SIMONT MONAHAN DUHOT
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8.3 The Vendor represents and warrants that neither on the Signing Date nor
on the Effective Date no other Employees are employed by the Vendor
within the Business than those listed in Schedule 8.3
Article 9 - Post Signing Obligations
9.1 As from Signing until title in the Assets has effectively been vested
in the Purchaser, the Vendor shall hold the Assets for the benefit of
the Purchaser.
9.2 The Vendor shall keep in force the Policies for 90 days after the
Signing (or as may be extended in accordance with Article 6) and shall
add the Purchaser, as loss payee under the Policies. The Purchaser
shall pay to the Vendor the proportion of the insurance premiums
attributable from the period from Signing until the cancellation
of cover under the Policies at the request of the Purchaser.
9.3 Each party shall forthwith pass to the other any payment, notice,
correspondence, information or enquiry in relation to the Business
or the Assets or any other assets which it receives after Signing,
and which properly belongs to the other.
9.4 The Purchaser will satisfy the Liabilities as and when they fall due
and generally in accordance with the business practice of Vendor
provided that they are listed in Schedule 2.2.
9.5 At or as soon as practicable after Signing the parties shall, at the
option of Purchaser, send a joint letter in agreed form to each
customer, client and supplier of the Business, advising it of the
purchase of the Business by the Purchaser. Each party will use its
best
<PAGE> 19
STIBBE SIMONT MONAHAN DUHOT
-17- 4 July 1997
endeavours to ensure the other party's amicable relationship with
common customers and will do nothing to adversely effect such
relationship.
9.6 For a period of up to one year after Signing the Vendor shall give to
the Purchaser such information and assistance as the Purchaser may
reasonably require relating to the Business.
9.7 The Purchaser will keep available for tax purposes to the Vendor for a
period of ten years after Signing, all such books and records as the
Vendor will indicate to the Purchaser.
Article 10 - Representations and warranties
10.1 The Vendor represents and warrants to the Purchaser that each of the
statements contained in articles 10.3 to 10.11 of the Agreement is true,
complete and accurate in all respects and not misleading on the date
hereof and will be so on the Effective Date and that after Signing the
same shall remain in full force as representations and warranties.
10.2 Each of the representations and warranties contained in articles 10.5 to
10.11 of the Agreement shall be construed as a separate and independent
warranty and (save where expressly provided to the contrary) shall not
be limited or restricted by reference or inference from any other
provision of this Agreement or any other such representation or warranty
or any disclosure relating to any such term or said representation or
warranty.
10.3 Incorporation and existence
The Vendor is a company duly incorporated and validly existing
according to the laws of The Netherlands.
<PAGE> 20
STIBBE SIMONT MONAHAN DUHOT
-18- 4 July 1997
10.4 Power and authority
(a) The Vendor has the legal right and full power and authority to
execute and deliver, and to exercise its rights and perform its
obligations under, this Agreement and all the documents which
are to be executed at Signing Date thereafter;
(b) The Vendor has the legal right and full power and authority to
carry on the Business.
(c) Vendor represents that the actions mentioned under 10.4(a)
above are not and will not be in breach of any Court order or
injunction against Vendor (including all legal proceedings
pending in the United States of America) and cannot be reversed
by any Court order or injunction against vendor.
10.5 Corporate action
All corporate action required by the Vendor validly and duly authorise
the execution and delivery of, and to exercise its rights and perform
its obligations under this Agreement and all other documents which are
to be executed at or after Signing has been duly taken.
10.6 Binding agreements
This Agreement constitutes, and the documents which are to be executed
at or after Signing when executed will constitute, valid and binding
agreements of the Vendor enforceable in accordance with their
respective terms.
10.7 Information
All information which has been given by, or on behalf of, the Vendor,
directly or indirectly, to the Purchaser before and during the
negotiations leading to this Agreement is true, complete and accurate
in all respects and not misleading in any respect.
10.8 Changes since 2 June 1997
<PAGE> 21
STIBBE SIMONT MONAHAN DUHOT
-19- 4 July 1997
Since 2 June 1997
(a) to Vendors' best knowledge the Business has been
carried on in the ordinary and usual course without
interruption, in the same manner (including without
limitation, nature and scope) as in the prior period
of that year and so as to maintain the Business as a
going concern;
(b) to Vendors' best knowledge there has been no adverse
change in the financial or trading position or
prospects or the Business;
(c) to Vendor's best knowledge the Vendor has not, other
than in the ordinary and usual course of the Business:
(i) acquired or disposed of, or agreed to
acquire or dispose of, any asset; or
(ii) assumed or incurred, or agreed to assume
or incur, any liability, expenditure or
obligation;
(d) the Vendor has not made, or agreed to make, any capital
expenditure exceeding NLG 25,000 in the aggregate or
incurred, or agreed to incur, any commitments
involving capital expenditure exceeding NLG 25,000 in
the aggregate;
(e) to Vendors' best knowledge the Business has not been
materially and adversely affected by the termination,
or any change in the terms, of any important agreement
or by the loss of any customer or source of supply or
by any abnormal factor not affecting similar businesses
to a like extent and the Vendors are not aware of any
facts which are likely to give rise to any such affects;
(f) the Vendor did not change the capital of the Vendor,
nor were any dividends distributed;
(g) to Vendors' best knowledge no new employees have been
hired or employment contracts have been entered into,
and no employment contracts have been
<PAGE> 22
STIBBE SIMONT MONAHAN DUHOT
-20- 4 July 1997
terminated; no employees have made any claims against the
Company or threatened to make claims against the Company.
10.9 Assets
The Assets are:
(a) legally and beneficially owned by the Vendor free from any
pledge, charge or encumbrance;
(b) where capable of possession, in the possession or under the
control of the Vendors;
(c) situated in The Netherlands; and
(d) comprise all the assets necessary or desirable for the
Purchasers to carry on, fully and effectively, the Business.
10.10 Insolvency
(a) No order has been made or petition presented or resolution
passed for the bankruptcy or winding up of any of the Vendors or
for granting suspension of payments ("surseance van betaling");
(b) No voluntary arrangement or general compromise with the Vendors'
creditors have been proposed or agreed to;
(c) The Vendors have not stopped paying its debts as they fall due;
(d) No attachment ("beslag") has been made on any of the Assets;
10.11 Judgements and Court orders
As of 2 June, 1997 until the Effective Date, there is no unfulfilled or
unsatisfied judgment or Court order outstanding against the Vendor or,
in relation to the Business or the transfer thereof, against any of its
<PAGE> 23
STIBBE SIMONT MONAHAN DUHOT
-21- 4 July 1997
group companies (save the legal proceedings pending in the
United States of America).
Article 11 - Indemnity
11.1 The Vendor, EuroMed, Inc., EuroMed B.V. and Mutarestes B.V.
shall defend, indemnify and hold harmless the Purchaser and its
directors, officers, shareholders, successors and assigns from
and against any and all damages, losses, liabilities, claims,
costs and expenses, whether or not involving a claim of a third
party, in connection with or resulting directly or indirectly
from, under or with respect to:
(a) any misrepresentation, breach of warranty or
nonfulfilment of any covenant, indemnity, undertaking
or agreement on the part of the Vendor contained in this
Agreement or any Schedule hereto;
(b) any and all actions, suits, proceedings, demands,
assessments or judgements, costs or expenses (including,
but not limited to, legal and other adviser's fees)
related to paragraph (a).
11.2 The Vendor shall make or procure to be made available to the
Purchaser or their duly authorised agents, all relevant books or
accounts, correspondence necessary for the purpose of enabling
the Purchaser to ascertain or extract any information which
might be relevant to any claim as referred to in article 11.1.
11.3 The Vendor's obligation to indemnify and hold harmless the
Purchaser will (i) end on 1 July 2002 with respect to tax claims
and on 1 July 1998 with respect to all other claims, unless, at
that moment the Purchaser or
<PAGE> 24
STIBBE SIMONT MONAHAN DUHOT
-22- 4 July 1997
its assignee will have notified the Vendor of a claim hereunder
and will (ii) not apply if the aggregate of any claims hereunder
is less than NLG 50,000 (fifty thousand Dutch Guilders). It is
being understood that, if the aggregate of claims exceeds such
threshold, the Purchaser may claim the full amount of their
damages, losses, liabilities, costs and expenses. An individual
claim which is less than NLG 1,000 (one thousand Dutch Guilders)
cannot be claimed by either party.
11.4 The liability of Vendor, EuroMed, Inc., EuroMed Europe B.V. and
Mutarestes B.V. with respect to the obligations, representations
and warranties arising from this Agreement is limited to an
amount of NLG 3,000,000. This limitation will not apply to
Vendors' representation set forth in article 10.4 under (c).
11.5 As far as the period before 2 June, 1997 is concerned, the
Vendor gives no guarantees on compliance with the Act of the
Pharmaceuticals ("Wet op de Geneesmiddelen") with respect to
the Business.
Article 12 - Accounts
12.1 The Accounts show a true and fair view of the turnover assets,
liabilities, and the state of affairs of the Business as at the
Effective Date, and of the profits and losses of the Vendor for
the period commencing on 1 January 1997 and ending on the
Effective Date.
12.2 The Accounts will be prepared by the accounting firm of the
Purchaser, Deloitte & Touche, in conjunction with the accounting
firm of the Vendor, Paardekooper & Hoffman, in accordance with
generally accepted accounting principles in the Netherlands, and
as consistent
<PAGE> 25
STIBBE SIMONT MONAHAN DUHOT
-23- 4 July 1997
with the policies and conventions currently applied by Vendor. No
later than one month after the Effective Date, the abovementioned
accounting firms shall deliver to the Parties joint statement of the
value of the above Components A, B, C, D and E as at the Effective
Date. If the abovementioned accounting firms or the Parties are unable
to reach an agreement with respect to this statement, the
abovementioned accounting firms shall, by mutual agreement, select a
third accounting firm that is well known and enjoys a good reputation
in The Netherlands, to prepare a statement, within ten (10) business
days or receiving the request to do so. The Vendor and Purchaser agree
to be bound by the statement prepared by such third accounting firm.
Each party shall bear the costs of its own auditor. In the event of
the appointment of a third accounting firm, pursuant to this article,
all expenses related thereto shall be borne equally to the parties.
Article 13 - Conditions precedent
Prior to Signing, as a condition precedent to the Signing, Vendor shall deliver
to Purchaser a legal opinion of Mr. R. Dahlson, counsel to EuroMed, Inc. and
Vendor, confirming that the Assets can be sold by Vendor legally and
inviolably, irrespective of claims of third party and without the Shareholder's
Approval.
Article 14 Shareholders' Approval
On or as soon as possible after the Signing Date, and notwithstanding article
5.2 of this Agreement, Purchaser shall receive the Shareholders' Approval.
<PAGE> 26
STIBBE SIMONT MONAHAN DUHOT
-24- 4 July 1997
Article 15 - Waiver of the right to rescind this Agreement.
The Parties waive their rights under the Dutch Civil Code ("Burgerlijk
Wetboek") to recsind this Agreement.
Article 16 - Assignability
None of the parties hereto may assign any of its rights or obligations pursuant
hereto, without the prior written consent of the other parties hereto which
shall not be unreasonably withheld.
Article 17 Statutory Names
The Vendor and De Nieuwe Wereld B. V. will change their statutory names within
two months as of the Effective Date. The Vendor and De Nieuwe Wereld B. V. are
not entitled to use the names "Pluripharm" and "De Nieuwe Wereld" as of the
Effective Date in any way and each use thereof will be considered as an
infringement of the Intellectual Property Rights.
Article 18 - Expenses and taxation
Except as otherwise expressly provided herein, the Vendor and the Purchaser
respectively shall each themselves pay and be responsible for all costs and
expenses (including, but not limited to legal, fiscal and auditing (advice)
costs) incurred by them in the negotiation and preparation of this Agreement
and in or as a consequence of completing and carrying out the transaction
contemplated hereby. It is being understood that the abovementioned costs and
expenses cannot be deducted from the results of the Business.
<PAGE> 27
STIBBLE SIMONT MONAHAN DUHOT
-25- 4 JULY 1997
Article 19 - Governing law, jurisdiction and notice
19.1 This Agreement and all Annexes and Schedules hereto shall be
governed by and construed in accordance with the laws of The
Netherlands and all disputes arising in connection herewith that
cannot be amicably settled shall be exclusively submitted to the
District Court (Arrondissementsrechtbank) of Amsterdam,
notwithstanding appeal (hoger beroep) and cassation (cassatie).
19.2 Any notice or other communication required to be given or made under
this Agreement shall be in writing to the following address:
If to the Vendor:
Wilhelminakanaal-Noord 6
4902 VR OOSTERHOUT (NBR)
with a copy to:
Boekel de Neree
Attn. M. Deckers, Esq.
P.O. Box 2508
1000 CM AMSTERDAM
If to the Purchaser:
Bevelandseweg 102-110
1703 AX HEERHUGOWAARD
with a copy to:
Nieuwe Gracht 70
3512 LV UTRECHT
A party may change its address for the purpose of this Agreement by
giving notice of such change to the others pursuant to the provisions
of this paragraph. Any notice shall be sent by registered mail and
shall be deemed to
<PAGE> 28
STIBBE SIMONT MONAHAN DUHOT
- 26 - 4 July 1997
have been received by the party to whom it was sent at the end of the
day shown as the day of receipt on the return receipt sent with the
same.
Article 20 - Announcements
All announcements to the press or to the public, customers and suppliers
concerning the sale of the Business shall be in a form agreed between the
parties.
Article 21 - Confidentiality
Except where required by law or applicable regulations (such as the USA
securities laws) the parties will not at any time hereafter divulge or
communicate to any person other than the officers or employes of the Purchaser
or the tax authorities or on the instructions of the Purchaser any confidential
information concerning the Business, or the accounts, finance or contractual
arrangements or other dealings, transactions or affairs of or concerning the
Business or which may come to their knowledge and they will use their best
endeavours to prevent the publication or disclosure of any confidential
information concerning such matters.
Article 22 - Miscellaneous
22.1 All Schedules to this Agreement form an integral part hereof. All terms
defined in this Agreement and used in any Schedules hereto as
capitalised items shall have the same meaning therein as herein, unless
otherwise provided in such Schedules.
22.2 The invalidity or unenforceability of any part of this Agreement shall
not affect the validity or enforceability of the remainder. The Vendor
and the Purchaser will amend the Agreement now for then by
<PAGE> 29
STIBBE SIMONT MONAHAN DUHOT
-27- 4 July 1997
mutual agreement and in accordance with the intention of the
Agreement, in such way that the non-binding clauses will be
replaced by clauses that differ as less as possible of the
non-binding clauses.
22.3 This Agreement constitutes the entire agreement between the
parties hereto in respect of the subject matters contained
herein and any preceding or concurrent oral or written
agreements are hereby superseded. This Agreement may only
be amended by an instrument in writing duly signed for and
on behalf of each of the parties hereto.
Thus agreed and signed in Amsterdam 4 original copies on 4 July, 1997.
/s/ W. L. VELDMAN
--------------------------
Vendor
/s/ [ILLEGIBLE]
--------------------------
Purchaser
For agreement with article 11.1:
/s/ A. F. HINNEN
---------------------------
EuroMed, Inc.
/s/ A. F. HINNEN
---------------------------
EuroMed Europe B.V.
/s/ W. L. VELDMAN
---------------------------
Mutarestes B.V.
For agreement with article 17:
/s/ W. L. VELDMAN
---------------------------
De Nieuwe Wereld B.V.
