NDA CLINICAL TRIAL SERVICES INC.
STOCK PURCHASE AGREEMENT
Dated as of September 27, 1995
TABLE OF CONTENTS
Section Page
ARTICLE I
THE SHARES
1.1. Issuance, Sale and Delivery of the Shares........................5
1.2. The Closing......................................................5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Organization, Qualifications and Corporate Power.................6
2.2. Authorization of Agreements, etc.................................6
2.3. Validity.........................................................7
2.4. Authorized Capital Stock.........................................7
2.5. Financial Statements.............................................8
2.6. Events Subsequent to the Date of the Balance Sheet...............9
2.7. Litigation; Compliance with Law..................................9
2.8. Proprietary Information of Third Parties........................10
2.9. Title to Properties.............................................10
2.10. Leasehold Interests.............................................11
2.11. Insurance.......................................................11
2.12. Taxes...........................................................11
2.13. Other Agreements................................................12
2.14. Patents, Trademarks, etc........................................14
2.15. Loans and Advances..............................................14
2.16. Assumptions, Guaranties, etc. of Indebtedness
of Other Persons..............................................15
2.17. Significant Customers and Suppliers.............................15
2.18. Governmental Approvals..........................................15
2.19. Disclosure......................................................15
2.20. Offering of the Shares..........................................15
2.21. Brokers.........................................................16
2.22. Officers........................................................16
2.23. Transactions With Affiliates....................................16
2.24. Employees.......................................................16
2.25. Updating........................................................17
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF UNIHOLDING
3.1. UniHolding Representations......................................17
ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF UNIHOLDING
4.1. UniHolding Closing Conditions...................................17
ARTICLE IV-A
CONDITIONS TO THE OBLIGATIONS OF NDA
4A.1. NDA Closing Conditions..........................................20
ARTICLE V
COVENANTS OF NDA
5.1. Financial Statements, Reports, etc..............................21
5.2. Right of First Refusal..........................................23
5.3. Corporate Existence.............................................24
5.4. Properties, Business, Insurance.................................24
5.5. Inspection, Consultation and Advice.............................25
5.6. Restrictive Agreements Prohibited...............................25
5.7. Transactions with Affiliates....................................25
5.8. Expenses of Directors...........................................25
5.9. Use of Proceeds.................................................25
5.10. Board of Directors Meetings.....................................26
5.11. Budget and Operating Forecast...................................26
5.12. Compensation....................................................26
5.13. By-laws.........................................................26
5.14. Employee Agreements.............................................26
5.15. Maintenance of Ownership of Subsidiaries........................27
5.16. Compliance with Laws............................................27
5.17. Keeping of Records and Books of Account.........................27
5.18. Obligations and Taxes...........................................27
5.19. Indemnification.................................................27
5.20. Corporate Actions...............................................28
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ARTICLE VI
MISCELLANEOUS
6.1. Expenses........................................................29
6.2. Survival of Agreements..........................................29
6.3. Brokerage.......................................................29
6.4. Parties in Interest.............................................29
6.5. Notices.........................................................30
6.6. Governing Law...................................................30
6.7. Entire Agreement................................................30
6.8. Counterparts....................................................30
6.9. Amendments......................................................31
6.10. Severability....................................................31
6.11. Titles and Subtitles............................................31
6.12. Certain Defined Terms...........................................31
INDEX TO SCHEDULES
SCHEDULE 2.4 Security Holders
SCHEDULE 2.6 Events Subsequent
SCHEDULE 2.10 Leasehold Interests
SCHEDULE 2.13
(A) and (B) Material Agreements
SCHEDULE 2.14 Intellectual Property
SCHEDULE 2.15 Loans and Advances
SCHEDULE 2.22 Officers
SCHEDULE 2.23 Affiliate Transactions
SCHEDULE 5.9 Use of Proceeds
INDEX TO EXHIBITS
EXHIBIT A Registration Rights Agreement, as amended
EXHIBIT B Stockholders' Agreement, as amended
EXHIBIT C Charter Documents
EXHIBIT D Form of Employee Non-Disclosure, Non-Competition
and Inventions Agreement, together with Sales
Incentive Riders
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STOCK PURCHASE AGREEMENT dated as of September 27, 1995 between NDA
Clinical Trial Services Inc., a Delaware corporation, with its principal place
of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("NDA" or the
"Company") and UniHolding Corp., a Delaware corporation, with its principal
place of business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ("UniHolding").
WHEREAS, the Company wishes to issue and sell to UniHolding (i) 8,932
shares ("Shares") of the authorized but unissued Class A Common Stock, $.01 par
value (the "Common Stock"), of the Company for a purchase price of $133.00 per
share (the "Purchase Price"); and (ii) the Option as defined in that certain
Option Agreement of even date herewith executed between the parties ("Option
Agreement"); and
WHEREAS, UniHolding wishes (i) to purchase the Shares on the terms and
subject to the conditions set forth in this Agreement and (ii) to purchase the
Option on the terms and conditions set forth in the Option Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
ARTICLE I
THE SHARES
SECTION 1.1. Issuance, Sale and Delivery of the Shares. Subject to the
terms and conditions of this Agreement, at the Closing, NDA will issue and sell
to UniHolding, and UniHolding will purchase the Shares for the Purchase Price.
SECTION 1.2. The Closing. The closing ("Closing") shall take place at the
offices of Meltzer, Lippe, Goldstein, Wolf, ▇▇▇▇▇▇▇▇▇ & Sazer, P.C., ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ on October 8, 1995 at 10:00 a.m. or at such
other time and date mutually agreeable to NDA and counsel to UniHolding, but in
no event later than October 15, 1995 ("Closing Date"). At the Closing, NDA will
deliver to UniHolding a certificate for the Shares being purchased by
UniHolding, registered in the name of UniHolding, against payment to NDA of the
Purchase Price, by wire transfer, check or other method acceptable to the
Company. It is understood and agreed that UniHolding will pay 10% of the
Purchase Price upon execution of this Agreement. If at the Closing any of the
conditions specified in Article IV shall not have been fulfilled, UniHolding
shall, at its election, be relieved of all of its obligations under this
Agreement, the Option Agreement and the UCT
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Option Agreement (as hereinafter defined) without thereby waiving any other
rights it may have by reason of such failure or such non-fulfillment. If at the
Closing any of the conditions specified in Article IV-A shall not have been
fulfilled, NDA shall, at its election, be relieved of all of its obligations
under this Agreement, the Option Agreement and the UCT Option Agreement (as
hereinafter defined) without thereby waiving any other rights it may have by
reason of such failure or such non-fulfillment.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As of the execution of this Agreement and at the Closing Date, NDA
represents and warrants to UniHolding that, except as set forth in any Schedule
attached hereto:
SECTION 2.1. Organization, Qualifications and Corporate Power. (a) NDA is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and is duly licensed or qualified to transact
business as a foreign corporation and is in good standing in each jurisdiction
in which the nature of the business transacted by it or the character of the
properties owned or leased by it requires such licensing or qualification. NDA
has the corporate power and authority to own and hold its properties and to
carry on its business as now conducted and as proposed to be conducted, to
execute, deliver and perform this Agreement, the Registration Rights Agreement
dated December 15, 1994, as amended, in the form attached as Exhibit A (the
"Registration Rights Agreement"), the Stockholders' Agreement dated December 15,
1994, as amended, in the form attached as Exhibit B (the "Stockholders'
Agreement") and the Option Agreement, and to issue, sell and deliver the Shares.
(b) NDA does not (i) own of record or beneficially, directly or indirectly,
(A) any shares of capital stock or securities convertible into capital stock of
any other corporation or (B) any participating interest in any partnership,
joint venture or other non-corporate business enterprise or (ii) control,
directly or indirectly, any other entity.
SECTION 2.2. Authorization of Agreements, etc. (a) The execution and
delivery by NDA of this Agreement, the Option Agreement, the Registration Rights
Agreement and the Stockholders' Agreement, the performance by NDA of its
obligations hereunder and thereunder, and the issuance, sale and delivery of the
Shares and the Option have been duly authorized by all requisite corporate
action and will not violate any provision of law, any order of any court or
other agency of government, the Certificate of
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Incorporation of NDA or the By-laws of NDA, as amended (the "Charter
Documents"), which are attached as Exhibit C, or any provision of any indenture,
agreement or other instrument to which NDA, or its properties or assets is
bound, or conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge,
restriction, claim or encumbrance of any nature whatsoever upon any of the
properties or assets of NDA or any of its subsidiaries.
(b) NDA has secured any required waivers and consents from its stockholders
in connection with the execution and delivery by NDA of this Agreement and the
Option Agreement and the performance by NDA of its obligations hereunder and
thereunder, including but not limited to, the delivery of all shares of Common
Stock issuable to UniHolding under this Agreement and the Option Agreement free
of any preemptive rights of any stockholders of NDA. Notwithstanding the
foregoing, it is agreed and acknowledged by NDA and UniHolding that the addition
of a sixth director which will be a nominee of Uniholding as provided in the
Stockholders' Agreement (as amended contemporaneously herewith) will require an
amendment to NDA's Certificate of Incorporation which will be effected by NDA
within 30 days of the Closing.
(c) The Shares have been duly authorized and, when issued in accordance
with this Agreement and the Charter Documents will be validly issued, fully paid
and nonassessable with no personal liability attaching to the ownership thereof
and will be free and clear of all liens, charges, restrictions, claims and
encumbrances except as set forth in the Stockholders Agreement and the
Registration Rights Agreement. The issuance, sale and delivery of the Common
Stock is not subject to any preemptive right of stockholders of NDA or to any
right of first refusal or other right in favor of any person that has not been
waived to the extent necessary to permit the transactions contemplated by this
Agreement to occur. The shares of Common Stock issuable pursuant to the Option
will, upon issuance, be duly authorized, validly issued, fully paid and
non-assessable, free of any preemptive right and right of first refusal or any
other lien or encumbrance.
SECTION 2.3. Validity. Each of the Agreement, the Option Agreement, the
Registration Rights Agreement and the Stockholders' Agreement has been duly
executed and delivered by NDA and constitutes the legal, valid and binding
obligation of NDA, enforceable in accordance with its respective terms.
SECTION 2.4. Authorized Capital Stock. The authorized capital stock of NDA
consists of 500,000 shares of Common Stock, of which 40,518 shares are issued
and outstanding and 50,000 shares of Class
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B Non-Voting common stock ("Class B Stock") of which 2,280 shares are issued and
outstanding. In addition, options to purchase 775 shares have been granted and
an additional 2,525 shares of Common Stock are reserved for issuance to
management employees of the Company, all pursuant to the Company's 1994 Stock
Incentive Plan (the "Stock Option Plan"). The stockholders of record and holders
of subscriptions, warrants, options, convertible securities and other rights
(contingent or other) to purchase or otherwise acquire equity securities of NDA
and the number of shares of Common Stock and Class B Stock and the number of
such subscriptions, warrants, options, convertible securities, and other such
rights held by each, are as set forth in the attached Schedule 2.4. Except as
set forth in the attached Schedule 2.4, Schedule 2.6, this Agreement and the
Option Agreement, (i) no person owns of record or is known to NDA to own
beneficially any shares of Common Stock or Class B Stock, (ii) no subscription,
warrant, option, convertible security or other right (contingent or other) to
purchase or otherwise acquire equity securities of NDA is authorized or
outstanding and (iii) there is no commitment by NDA to issue shares,
subscriptions, warrants, options, convertible securities or other such rights or
to distribute to holders of any of its equity securities any evidence of
indebtedness or asset. Except as provided for in the Charter Documents or as set
forth in the attached Schedule 2.6, NDA has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interest therein or to pay any dividend or make any other distribution in
respect thereof. Other than (i) the Stockholders' Agreement and (ii) as set
forth on Schedule 2.6 hereof, there are, to the best of NDA's knowledge, no
voting trusts or agreements, stockholders' agreements, pledge agreements,
buy-sell agreements, rights of first refusal, preemptive rights or proxies
relating to any securities of NDA (whether or not NDA is a party thereto). All
of the outstanding securities of NDA were issued in compliance with all
applicable Federal and state securities laws.
SECTION 2.5. Financial Statements. NDA has furnished to UniHolding the
unaudited balance sheet of NDA as of December 31, 1993 and the audited balance
sheet of NDA as of December 31, 1994 and the related statements of income,
stockholders equity and cash flows of NDA for the years ended December 31, 1993
and 1994 (unaudited for 1993 and audited for 1994). NDA has also furnished to
UniHolding its interim unaudited income statement and balance sheet for the six
months ended June 30, 1995. All such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial position of NDA at the dates and
for the periods to which they relate. Since the June 30, 1995 balance sheet, (i)
there has been no change in the assets, liabilities or financial condition of
NDA from that reflected in such balance sheet except for changes in the ordinary
course of business which
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in the aggregate have not been materially adverse and (ii) none of the business,
prospects, financial condition, operations, property or affairs of NDA has been
materially adversely affected by any occurrence or development, individually or
in the aggregate, whether or not insured against.
SECTION 2.6. Events Subsequent to the Date of the Balance Sheet. Since the
June 30, 1995 balance sheet, NDA has not (i) except as set forth in the attached
Schedule 2.6, issued any stock, bond or other corporate security, (ii) borrowed
any amount or incurred or become subject to any liability (absolute, accrued or
contingent), except current liabilities incurred and liabilities under contracts
entered into in the ordinary course of business, (iii) discharged or satisfied
any lien or encumbrance or incurred or paid any obligation or liability
(absolute, accrued or contingent) other than current liabilities shown on the
June 30, 1995 balance sheet and current liabilities incurred since the date of
such balance sheet in the ordinary course of business, (iv) declared or made any
payment or distribution to stockholders or purchased or redeemed any share of
its capital stock or other security, (v) mortgaged, pledged or subjected to lien
any of its assets, tangible or intangible, other than liens of current real
property taxes not yet due and payable, (vi) sold, assigned or transferred any
of its tangible assets except in the ordinary course of business, or cancelled
any debt or claim, (vii) sold, assigned, transferred or granted any exclusive
license with respect to any patent, trademark, trade name, service ▇▇▇▇,
copyright, trade secret or other intangible asset, (viii) suffered any loss of
property or waived any right of substantial value whether or not in the ordinary
course of business, (ix) made any change in officer compensation except in the
ordinary course of business and consistent with past practice, (x) made any
material change in the manner of business or operations of NDA, (xi) entered
into any transaction except in the ordinary course of business or as otherwise
contemplated hereby or (xii) entered into any commitment (contingent or
otherwise) to do any of the foregoing.
SECTION 2.7. Litigation; Compliance with Law. NDA is not aware of any (i)
action, suit, claim, proceeding or investigation pending or threatened against
or affecting NDA, at law or in equity, or before or by any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) arbitration proceeding relating to
NDA pending under collective bargaining agreements or otherwise or (iii)
governmental inquiry pending or, to the best of NDA's knowledge, threatened
against or affecting NDA (including, without limitation, any inquiry as to the
qualification of NDA to hold or receive any license or permit). NDA has not
received any opinion or memorandum or legal advice from legal counsel to the
effect that it is exposed, from a legal standpoint, to any
9
liability or disadvantage which may be material to its business, prospects,
financial condition, operations, property or affairs. NDA is not in default with
respect to any order, writ, injunction or decree known to or served upon NDA of
any court or of any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign. There
is no action or suit by NDA pending or threatened against others. NDA has
complied with all laws, rules, regulations and orders applicable to its
business, operations, properties, assets, products and services, and NDA has all
necessary permits, licenses and other authorizations required to conduct its
business as conducted and as proposed to be conducted. There is no existing law,
rule, regulation or order, and NDA after due inquiry is not aware of any
proposed law, rule, regulation or order, whether Federal or state, which would
prohibit or restrict NDA from, or otherwise materially adversely affect NDA in,
conducting its business in any jurisdiction in which it is now conducting
business or in which it proposes to conduct business.
SECTION 2.8. Proprietary Information of Third Parties. To the best of NDA's
knowledge, no third party has claimed or has reason to claim that any person
employed by or affiliated with NDA has (a) violated or may be violating any of
the terms or conditions of his employment, non-competition or non-disclosure
agreement with such third party, (b) disclosed or may be disclosing or utilized
or may be utilizing any trade secret or proprietary information or documentation
of such third party or (c) interfered or may be interfering in the employment
relationship between such third party and any of its present or former
employees. No third party has requested information from NDA which suggests that
such a claim might be contemplated. To the best of NDA's knowledge, no person
employed by or affiliated with NDA has employed or proposes to employ any trade
secret or any information or documentation proprietary to any former employer,
and to the best of NDA's knowledge, no person employed by or affiliated with NDA
has violated any confidential relationship which such person may have had with
any third party, in connection with the development, manufacture or sale of any
product or proposed product or the development or sale of any service or
proposed service of NDA, and NDA has no reason to believe there will be any such
employment or violation. To the best of NDA's knowledge, none of the execution
or delivery of this Agreement, the Option Agreement, the Registration Rights
Agreement and the Stockholders' Agreement, or the carrying on of the business of
NDA as officers, employees or agents by any officer, director or key employee of
NDA, or the conduct or proposed conduct of the business of NDA, will conflict
with or result in a breach of the terms, conditions or provisions of or
constitute a default under any contract, covenant or instrument under which any
such person is obligated.
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SECTION 2.9. Title to Properties. NDA has good and marketable title to its
properties and assets reflected on the June 30, 1995 balance sheet or acquired
by it since the date of said balance sheet (other than properties and assets
disposed of in the ordinary course of business since the date of said balance
sheet), and all such properties and assets are free and clear of mortgages,
pledges, security interests, liens, charges, claims, restrictions and other
encumbrances, except for liens for or current taxes not yet due and payable.
SECTION 2.10. Leasehold Interests. Except as set forth in Schedule 2.10,
(i) each lease or agreement to which NDA is a party under which it is a lessee
of any property, real or personal, is a valid and subsisting agreement without
any default of NDA thereunder and, to the best of NDA's knowledge, without any
default thereunder of any other party thereto; (ii) no event has occurred and is
continuing which, with due notice or lapse of time or both, would constitute a
default or event of default by NDA under any such lease or agreement or, to the
best of NDA's knowledge, by any other party thereto; and (iii) NDA's possession
of such property has not been disturbed and, to the best of NDA's knowledge, no
claim has been asserted against NDA adverse to its rights in such leasehold
interests.
SECTION 2.11. Insurance. NDA holds valid policies covering all of the
insurance required to be maintained by it under Section 5.4.
SECTION 2.12. Taxes. NDA has filed all tax returns, Federal, state, county
and local, required to be filed by it, and NDA has paid all taxes shown to be
due by such returns as well as all other taxes, assessments and governmental
charges which have become due or payable, including, without limitation, all
taxes which NDA is obligated to withhold from amounts owing to employees,
creditors and third parties. All such taxes with respect to which NDA has become
obligated pursuant to elections made by NDA in accordance with generally
accepted practice have been paid and adequate reserves have been established for
all taxes accrued but not yet payable. The Federal income tax returns of NDA
have never been audited by the Internal Revenue Service. No deficiency
assessment with respect to or proposed adjustment of NDA's Federal, state,
county or local taxes is pending or, to the best of NDA's knowledge, threatened.
There is no tax lien, whether imposed by any Federal, state, county or local
taxing authority, outstanding against the assets, properties or business of NDA.
NDA is a C corporation. Neither NDA nor any of its stockholders has ever filed a
consent pursuant to Section 341(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), relating to collapsible corporations. NDA's net operating
losses for Federal income tax purposes, as set forth in the financial statements
referred to in
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Section 2.5, are not subject to any limitations imposed by Section 382 of the
Code and the full amount of such net operating losses are available to offset
the taxable income of NDA for the current fiscal year and, to the extent not so
used, succeeding fiscal years. Consummation of the transactions contemplated by
this Agreement or by any other agreement, understanding or commitment
(contingent or otherwise) to which NDA is a party or by which it is otherwise
bound will not have the effect of limiting NDA's ability to use such net
operating losses in full to offset such taxable income.
SECTION 2.13. Other Agreements. Except as set forth in the attached
Schedule 2.13(A), NDA is not a party to or otherwise bound by any written or
oral contract or instrument or other restriction which individually or in the
aggregate could materially adversely affect the business, prospects, financial
condition, operations, property or affairs of NDA. Except as set forth in the
attached Schedule 2.13(B), Schedule 2.6 and Schedule 2.15, NDA is not a party to
or otherwise bound by any written or oral:
(a) distributor, dealer, manufacturer's representative or sales agency
contract or similar agreement which is not terminable on less than ninety (90)
days' notice without cost or other liability to NDA;
(b) sales contract which entitles any customer to a rebate or right of
set-off, to return any product to NDA after acceptance thereof or to delay the
acceptance thereof, or which varies in any material respect from NDA's standard
form contracts;
(c) contract with any labor union (and, to the knowledge of NDA, no
organizational effort is being made with respect to any of its employees);
(d) contract or other commitment with any supplier containing any provision
permitting any party other than NDA to renegotiate the price or other terms, or
containing any pay-back or other similar provision, upon the occurrence of a
failure by NDA to meet its obligations under the contract when due or the
occurrence of any other event;
(e) contract for the future purchase of fixed assets or for the future
purchase of materials, supplies or equipment in excess of its normal operating
requirements;
(f) contract for the employment of any officer, employee or other person
(whether of a legally binding nature or in the nature of informal
understandings) on a full-time or consulting basis which is not terminable on
notice without cost or other liability
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to NDA, except normal severance arrangements and accrued vacation pay;
(g) bonus, pension, profit-sharing, retirement, hospitalization, insurance,
stock purchase, stock option or other plan, contract or understanding pursuant
to which benefits are provided to any employee of NDA (other than group
insurance plans applicable to employees generally);
(h) agreement or indenture relating to the borrowing of money or to the
mortgaging or pledging of, or otherwise placing a lien or security interest on,
any asset of NDA;
(i) guaranty of any obligation for borrowed money or otherwise;
(j) voting trust or agreement, stockholders agreement, pledge agreement,
buy-sell agreement or first refusal or preemptive rights agreement relating to
any securities of NDA;
(k) agreement, or group of related agreements with the same party or any
group of affiliated parties, under which NDA has advanced or agreed to advance
money or has agreed to lease any property as lessee or lessor;
(l) agreement or obligation (contingent or otherwise) to issue, sell or
otherwise distribute or to repurchase or otherwise acquire or retire any share
of its capital stock or any of its other equity securities;
(m) assignment, license or other agreement with respect to any form of
intangible property;
(n) agreement under which it has granted any person any registration
rights, other than the Registration Rights Agreement;
(o) agreement under which it has limited or restricted its right to compete
with any person in any respect;
(p) other contract or group of related contracts with the same party
involving more than $10,000 or continuing over a period of more than six months
from the date or dates thereof (including renewals or extensions optional with
another party), which contract or group of contracts is not terminable by NDA
without penalty upon notice of thirty (30) days or less, but excluding any
contract or group of contracts with a customer of NDA for the sale, lease or
rental of NDA's products or services if such contract or group of contracts was
entered into by NDA in the ordinary course of business; or
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(q) other contract, instrument, commitment, plan or arrangement, a copy of
which would be required to be filed with the Securities and Exchange Commission
(the "Commission") as an exhibit to a registration statement on Form S-1 if NDA
were registering securities under the Securities Act of 1933, as amended (the
"Securities Act").
NDA, and to the best of NDA's knowledge, each other party thereto have in all
material respects performed all obligations required to be performed by them to
date, have received no notice of default and are not in default (with due notice
or lapse of time or both) under any lease, agreement or contract now in effect
to which NDA is a party or by which it or its property may be bound. NDA has no
present expectation or intention of not fully performing all its obligations
under each such lease, contract or other agreement, and NDA has no knowledge of
any breach or anticipated breach of the other party to any contract or
commitment to which NDA is a party. NDA is in full compliance with all of the
terms and provisions of its Certificate of Incorporation and By-laws, as
amended.
SECTION 2.14. Patents, Trademarks, etc. Set forth in Schedule 2.14 is a
list and brief description of all patents, patent rights, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇ applications,
trade names and copyrights, and all applications for such which are in the
process of being prepared, owned by or registered in the name of NDA, or of
which NDA is a licensor or licensee or in which NDA has any right, and in each
case a brief description of the nature of such right. NDA owns or possesses
adequate licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇ applications,
trade names, copyrights, manufacturing processes, formulae, trade secrets and
know-how (collectively, "Intellectual Property") necessary or desirable to the
conduct of its business as conducted and as proposed to be conducted, and no
claim is pending or, to the best of NDA's knowledge, threatened to the effect
that the operations of NDA infringe upon or conflict with the asserted rights of
any other person under any Intellectual Property, and there is no basis for any
such claim (whether or not pending or threatened). To the best of NDA's
knowledge, no claim is pending or threatened to the effect that any such
Intellectual Property owned or licensed by NDA, or which NDA otherwise has the
right to use, is invalid or unenforceable by NDA, and there is no basis for any
such claim (whether or not pending or threatened). To the best of NDA's
knowledge, all technical information developed by and belonging to NDA which has
not been patented has been kept confidential. NDA has not granted or assigned to
any other person or entity any right to manufacture, have manufactured, assemble
or sell the products or proposed products or to provide the services or proposed
services of NDA, except to UniHolding and its related companies.
SECTION 2.15. Loans and Advances. Other than as set forth on Schedule 2.15,
NDA does not have any outstanding loans or advances to any person and is not
obligated to make any such loans or advances, except, in each case, for advances
to employees of NDA in respect of reimbursable business expenses anticipated to
be incurred by them in connection with their performance of services for NDA.
14
SECTION 2.16. Assumptions, Guaranties, etc. of Indebtedness of Other
Persons. NDA has not assumed, guaranteed, endorsed or otherwise become directly
or contingently liable on any indebtedness of any other person (including,
without limitation, liability by way of agreement, contingent or otherwise, to
purchase, to provide funds for payment, to supply funds to or otherwise invest
in a debtor, or otherwise to assure a creditor against loss), except for
guaranties by endorsement of negotiable instruments for deposit or collection in
the ordinary course of business.
SECTION 2.17. Significant Customers and Suppliers. No customer or supplier
which was significant to NDA during the period covered by the financial
statements referred to in Section 2.5 or which has been significant to NDA
thereafter, has terminated, materially reduced or threatened to terminate or
materially reduce its purchases from or provision of products or services to
NDA, as the case may be.
SECTION 2.18. Governmental Approvals. Subject to the accuracy of the
representations and warranties of UniHolding set forth in Article III, no
registration or filing with, or consent or approval of or other action by, any
Federal, state or other governmental agency or instrumentality is or will be
necessary for the valid execution, delivery and performance by NDA of this
Agreement, the Option Agreement, the Registration Rights Agreement or the
Stockholders' Agreement, the issuance, sale and delivery of the Shares, other
than (i) filings pursuant to state securities laws (all of which filings have
been made by NDA) in connection with the sale of the Shares and (ii) with
respect to the Registration Rights Agreement, the registration of the shares
covered thereby with the Commission and filings pursuant to state securities
laws.
SECTION 2.19. Disclosure. Neither this Agreement, nor any Schedule or
Exhibit to this Agreement, contains an untrue statement of a material fact or
omits a material fact necessary to make the statements contained herein or
therein not misleading. None of the statements, documents, certificates or other
items prepared or supplied by NDA with respect to the transactions contemplated
hereby contains an untrue statement of a material fact or omits a material fact
necessary to make the statements contained therein not misleading. There is no
fact which NDA has not disclosed to UniHolding and its counsel in writing and of
which NDA is aware which materially and adversely affects or could materially
and adversely affect the business, prospects, financial condition, operations,
property or affairs of NDA.
SECTION 2.20. Offering of the Shares. Neither NDA nor any person acting on
its behalf has taken or will take any other action (including, without
limitation, any offer, issuance or sale of any security of NDA under
circumstances which might require the integration of such security with Common
Stock under the Securities Act or the rules and regulations of the Commission
thereunder), in either case so as to subject the offering, issuance or sale of
the Shares to the registration provisions of the Securities Act.
15
SECTION 2.21. Brokers. NDA has no contract, arrangement or understanding
with any broker, finder or similar agent with respect to the transactions
contemplated by this Agreement.
SECTION 2.22. Officers. Set forth in Schedule 2.22 is a list of the names
of the officers of NDA, together with the title or job classification of each
such person and the total compensation anticipated to be paid to each such
person by NDA in 1995. None of such persons has an employment agreement or
understanding, whether oral or written, with NDA, which is not terminable on
notice by NDA without cost or other liability to NDA.
SECTION 2.23. Transactions With Affiliates. Except as set forth in Schedule
2.23, no director, officer, employee or stockholder of NDA, or member of the
family of any such person, or any corporation, partnership, trust or other
entity in which any such person, or any member of the family of any such person,
has a substantial interest or is an officer, director, trustee, partner or
holder of more than 5% of the outstanding capital stock thereof, is a party to
any transaction with NDA, including any contract, agreement or other arrangement
providing for the employment of, furnishing of services by, rental of real or
personal property from or otherwise requiring payments to any such person or
firm.
SECTION 2.24. Employees. Each of the officers of NDA, each key employee and
each other employee now employed by NDA who has access to confidential
information of NDA has executed an Employee Non-Disclosure, Non-Competition and
Developments Agreement substantially in the form of Exhibit D (the
"Non-Competition Agreement"), and such agreements are in full force and effect.
No officer or key employee of NDA has advised NDA (orally or in writing) that he
intends to terminate employment with NDA. NDA has complied in all material
respects with all applicable laws relating to the employment of labor, including
provisions relating to wages, hours, equal opportunity, collective bargaining
and the payment of Social Security and other taxes, and with the Employee
Retirement Income Security Act of 1974, as amended.
16
SECTION 2.25 Updating. NDA agrees to update the representations and
schedules herein for any changes between the execution hereof and the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF UNIHOLDING
SECTION 3.1. UniHolding Representations. At the execution of this Agreement
and at the Closing Date, UniHolding represents and warrants to NDA that:
(a) it is an "accredited investor" within the meaning of Rule 501 under the
Securities Act and was not organized for the specific purpose of acquiring the
Shares;
(b) it has sufficient knowledge and experience in investing in companies
similar to NDA in terms of NDA's stage of development so as to be able to
evaluate the risks and merits of its investment in NDA and it is able
financially to bear the risks thereof;
(c) it has had an opportunity to discuss NDA's business, management and
financial affairs with NDA's management;
(d) the Shares being purchased by it are being acquired for its own account
for the purpose of investment and not with a view to or for sale in connection
with any distribution thereof;
(e) it understands that (i) the Shares have not been registered under the
Securities Act by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2) thereof
promulgated under the Securities Act, (ii) the Shares must be held indefinitely
unless a subsequent disposition thereof is registered under the Securities Act
or is exempt from such registration, (iii) the Shares will bear a legend to such
effect and (iv) NDA will make a notation on its transfer books to such effect.
(f) it has made its own decision to purchase the Shares and has not relied
on the decision of any other stockholder of the Company to purchase the Shares
in making its investment.
ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF UNIHOLDING
SECTION 4.1. UniHolding Closing Conditions. The obligation of UniHolding to
purchase and pay for the Shares and the Option is, at its option, subject to the
satisfaction, on or before the Closing Date, of the following conditions:
17
(a) Opinion of Company's Counsel. UniHolding shall have received from
counsel for NDA, an opinion dated the Closing Date in form and scope
satisfactory to UniHolding and its counsel, in the form attached hereto as
Schedule 4.1(a).
(b) Representations and Warranties to be True and Correct. The
representations and warranties contained in Article II shall be true, complete
and correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, and the
President and Chief Executive Officer of NDA shall have certified to such effect
to UniHolding in writing.
(c) Performance. NDA shall have performed and complied with all agreements
contained herein required to be performed or complied with by it prior to or at
the Closing Date and the President and Chief Executive Officer of NDA shall have
certified to UniHolding in writing to such effect and to the further effect that
all of the conditions set forth in this Article IV have been satisfied.
(d) All Proceedings to be Satisfactory. All corporate and other proceedings
to be taken by NDA in connection with the transactions contemplated hereby and
all documents incident thereto shall be satisfactory in form and substance to
UniHolding and its counsel, and UniHolding and its counsel shall have received
all such counterpart originals or certified or other copies of such documents as
they reasonably may request.
(e) Supporting Documents. UniHolding and its counsel shall have received
copies of the following documents:
(i) (A) NDA's Certificate of Incorporation, certified as of a recent
date by the Secretary of State of Delaware and (B) a certificate of the
Secretary of State of the State of Delaware dated as of a recent date as to
the due incorporation and good standing of NDA, the payment of all excise
taxes by NDA and listing all documents of NDA on file with said Secretary;
(ii) a certificate of the Secretary or an Assistant Secretary of NDA dated
the Closing Date and certifying: (A) that attached thereto is a true and
complete copy of the By-laws of NDA as in effect on the date of such
certification; (B) that attached thereto is a true and complete copy of all
resolutions adopted by the Board of Directors or the stockholders of NDA
authorizing the execution, delivery and performance of this Agreement, the
Option Agreement, the Registration Rights Agreement and the Stockholders'
Agreement, the issuance, sale and delivery of the Shares, and that all such
resolutions are in full force and effect and are all the resolutions
adopted in connection with the transactions contemplated by this Agreement,
the Registration Rights Agreement and the Stockholders, Agreement; (C) that
18
NDA's Certificate of Incorporation attached hereto as Exhibit C is in full
force and effect and has not been amended; (D) no default, or occurrence or
omission which, with notice or the passage of time or both, would result in
an event of default under any agreement to which NDA is a party, shall have
occurred or will occur as a result of the sale of Shares; and (E) to the
incumbency and specimen signature of each officer of NDA executing this
Agreement, the Option Agreement, the Registration Rights Agreement, the
Stockholders' Agreement and the stock certificates representing the Shares
and a certification by another officer of NDA as to the incumbency and
signature of the officer signing the certificate referred to in this clause
(ii); and
(iii) such additional supporting documents and other information with
respect to the operations and affairs of NDA as UniHolding or its counsel
reasonably may request.
(f) Registration Rights Agreement. NDA shall have executed and delivered
the Registration Rights Agreement.
(g) Stockholders' Agreement. The Stockholders' Agreement shall have been
executed and delivered by NDA.
(h) Option Agreement. The Option Agreement shall have been executed and
delivered by NDA.
(i) Election of Directors. The current Board of Directors shall have
resolved that the number of directors constituting the entire Board of Directors
of NDA shall have been increased to six; further the current Board of Directors
shall have resolved to effect an amendment to the Certificate of Incorporation
within 30 days thereof providing for such increase to six Directors and the
current Board shall have resolved to elect UniHolding's nominee for its Director
pursuant to the terms of the Stockholders' Agreement, as amended
contemporaneously herewith within 30 days thereof; and provided that as a
further condition of Closing that ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Poly
Ventures II, Limited Partnership and the Long Island Venture Fund, in their
respective capacities as NDA stockholders, shall have consented to such
amendment to the Certificate of Incorporation. NDA acknowledges that, subject to
the terms of the Stockholders' Agreement, as amended contemporaneously herewith,
19
Long Island Venture Fund, L.P., Poly Ventures II, Limited Partnership and
UniHolding shall each be entitled to have one nominee as a member of NDA's Board
of Directors.
(j) Compensation Committee. The Board of Directors shall have appointed a
Compensation Committee consisting of one representative designated by Poly
Ventures II, Limited Partnership and one member from management, which shall
consider and recommend to the Board of Directors compensation for NDA's officers
and directors and the participation of employees in NDA's Stock Option Plan. In
the event the Compensation Committee is "dead-locked" and unable to reach
agreement on any particular matter or issue, then the members of the
Compensation Committee will use reasonable efforts to resolve all such disputes,
but if a final resolution is not obtained within five (5) days after the date
the particular issue is first addressed by the Compensation Committee, then any
remaining disputes will be submitted to a third party, which party shall be
mutually agreed to by both members of the Compensation Committee and shall not
be an affiliate of any UniHolding or NDA, and whose decision with respect to
such disputes shall be final, conclusive and binding on the parties. If the
members of the Compensation Committee cannot agree on a third party to resolve a
dispute, then such dispute will be submitted to, and resolved exclusively
pursuant to arbitration in accordance with the commercial arbitration rules of
the American Arbitration Association (with such arbitration to take place in
Nassau County, New York and shall be subject to the substantive law of the State
of New York, except where by its terms the General Corporation Law of Delaware
applies). Decisions pursuant to such arbitration shall be final, conclusive and
binding on the parties.
(k) Preemptive Rights. All stockholders of NDA having any preemptive, first
refusal or other rights with respect to the issuance of the Shares and the
shares of Common Stock issuable pursuant to the Option shall have irrevocably
waived the same in writing.
(l) Key Person Insurance. NDA shall use its best efforts to maintain a term
life insurance policy in the face amount of $1 million for each of ▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and $500,000 for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, in each case, naming NDA
as sole beneficiary.
All such documents and arrangements shall be satisfactory in form and
substance to UniHolding and its counsel.
ARTICLE IV-A
CONDITIONS TO THE OBLIGATIONS OF NDA
SECTION 4A.1. NDA Closing Conditions. The obligation of NDA to issue the
Shares and the Option is subject to the satisfaction of the following
conditions, on or before the Closing Date:
20
(a) that the UCT Option Agreement, of even date herewith, shall have been
signed by UCT and UniHolding and shall have been delivered to NDA;
(b) that the President or Chief Executive Officer of UniHolding shall have
certified at and as of the Closing Date as follows:
(i) UniHolding is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware;
(ii) that it has requisite corporate authority to enter into this
Agreement and the Option Agreement and perform the transactions
contemplated hereunder and thereunder and such actions will not
violate any provision of law or any governmental order, decree or
judgment to which it is bound; and
(iii) that neither the execution of this Agreement or the Option
Agreement, or the performances contemplated herein or therein,
conflict with, or result in a breach of or constitute a default under
any agreement to which UniHolding or its properties or assets are
bound.
(iv) that all of Uniholding's representations and warranties shall be
true and correct as at the Closing Date.
ARTICLE V
COVENANTS OF NDA
NDA covenants and agrees with UniHolding that:
SECTION 5.1. Financial Statements, Reports, etc. NDA shall furnish to
UniHolding the following:
21
(a) within ninety (90) days after the end of each fiscal year of NDA a
balance sheet of NDA as of the end of such fiscal year and the related
consolidated statements of income, stockholders, equity and cash flows for the
fiscal year then ended, prepared in accordance with generally accepted
accounting principles and certified by a "big six" firm of independent public
accountants of recognized national standing selected by the Board of Directors
of NDA;
(b) within forty-five (45) days after the end of each fiscal quarter in
each fiscal year (other than the last fiscal quarter in each fiscal year) a
balance sheet of NDA and the related statements of income, stockholders' equity
and cash flows, unaudited but prepared in accordance with generally accepted
accounting principles and certified by the Chief Financial Officer of NDA, such
consolidated balance sheet to be as of the end of such fiscal quarter and such
statements of income, stockholders' equity and cash flows to be for such fiscal
quarter and for the period from the beginning of the fiscal year to the end of
such fiscal quarter, in each case with comparative statements for the
corresponding period in the prior fiscal year;
(c) within thirty (30) days after the end of each month in each fiscal year
(other than the last month in each fiscal year) a balance sheet of NDA and its
subsidiaries (if any) and the related statements of income, stockholders' equity
and cash flows, unaudited but prepared in accordance with generally accepted
accounting principles and certified by the Chief Financial Officer of NDA, such
consolidated balance sheet to be as of the end of such month and such
consolidated statements of income, stockholders' equity and cash flows to be for
such month and for the period from the beginning of the fiscal year to the end
of such month, in each case with comparative statements for the prior fiscal
year; provided that NDA's obligations under this Section 5.1(c) shall terminate
and be of no further force or effect upon the closing of a firm commitment
underwritten public offering of NDA's securities that qualifies as a Designated
Offering;
(d) at the time of delivery of each annual financial statement pursuant to
Section 5.1(a), a certificate executed by the Chief Financial Officer of NDA
stating that such officer has caused this Agreement to be reviewed and has no
knowledge of any default by NDA in the performance or observance of any of the
provisions of this Agreement or, if such officer has such knowledge, specifying
such default and the nature thereof;
(e) at the time of delivery of each monthly statement pursuant to Section
5.1(c), a management narrative report explaining all significant variances from
forecasts and all significant current developments in staffing, marketing, sales
and operations;
(f) promptly following receipt by NDA, each audit response letter,
accountant's management letter and other written report submitted to NDA by its
independent public accountants in connection with an annual or interim audit of
the books of NDA;
22
(g) promptly after the commencement thereof, notice of all actions, suits,
claims, proceedings, investigations and inquiries of the type described in
Section 2.7 that could materially adversely affect NDA;
(h) promptly upon sending, making available or filing the same, all press
releases, reports and financial statements that NDA sends or makes available to
its stockholders or directors or files with the Commission; and
(i) promptly, from time to time, such other information regarding the
business, prospects, financial condition, operations, property or affairs of NDA
and its subsidiaries as UniHolding reasonably may request.
SECTION 5.2. Right of First Refusal. As long as any shares of Common Stock
are outstanding, NDA shall, prior to any issuance by NDA of any of its
securities (other than debt securities with no equity feature), offer to each
person or entity set forth on Schedule 5.2 hereof (a "Holder") by written notice
the right, for a period of thirty (30) days, to purchase on a pro rata basis a
number of such securities as will enable such Holder to maintain, on a fully
diluted basis, the percentage of ownership of NDA such Holder has at the time of
such proposed issuance, for cash at an amount equal to the price or other
consideration for which such securities are to be issued; provided, however,
that the first refusal rights pursuant to this Section 5.2 shall not apply to
securities issued, (A) as a stock dividend or upon any subdivision of shares of
Common Stock, provided that the securities issued pursuant to such stock
dividend or subdivision are limited to additional shares of Common Stock, (B)
pursuant to subscriptions, warrants, options, convertible securities, or other
rights which are listed in Schedule 2.4 as being outstanding on the Closing
Date, (C) solely in consideration for the acquisition (whether by merger or
otherwise) by NDA or any of its subsidiaries of all or substantially all of the
stock or assets of any other entity, (D) pursuant to a firm commitment
underwritten public offering of NDA's securities that qualifies as a Designated
Offering, and (E) pursuant to the exercise of options to purchase Common Stock
granted to employees of NDA, not to exceed in the aggregate 3,300 shares,
appropriately adjusted to reflect stock splits, stock dividends, combinations of
shares and the like with respect to the Common Stock less the number of shares
(as so adjusted) issued pursuant to options outstanding on the date of this
Agreement and listed in Schedule 2.4 pursuant to clause (B) above (the shares
exempted by this clause (E) being hereinafter referred to as the "Reserved
Employee Shares"). NDA's written notice to the Holders shall describe the
securities proposed to be issued by NDA and specify the number, price and
payment terms. Each Holder may accept NDA's offer as to the full number of
securities offered to it or any lesser number, by written notice thereof given
by it to NDA prior to the expiration of the aforesaid thirty (30) day period, in
which event the Company shall promptly sell and such Holder shall purchase, upon
the terms specified, the number of securities agreed to be purchased by such
23
Holder. Notwithstanding the foregoing, if the Holders agree, in the aggregate,
to purchase more than the full number of securities offered by the Company, then
each Holder accepting NDA's offer shall first be allocated the lesser of (i) the
number of securities which such Holder agreed to purchase and (ii) the number of
securities as is equal to the full number of securities offered by NDA
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock held by such Holder as of the date of NDA's notice of offer and
the denominator of which shall be the aggregate number of shares of Common Stock
(calculated as aforesaid) held on such date by all Holders who accepted NDA's
offer, and the balance of the securities (if any) offered by NDA shall be
allocated among the Holders accepting NDA's offer in proportion to their
relative equity ownership interests in NDA (calculated as aforesaid); provided,
that no Holder shall be allocated more than the number of securities which such
Holder agreed to purchase; and provided, further, that in cases covered by this
sentence, all Holders shall be allocated among them the full number of
securities offered by NDA.
NDA shall be free at any time prior to ninety (90) days after the date of
its notice of offer to the Holders, to offer and sell to any third party or
parties the number of such securities not agreed by the Holders to be purchased
by them, at a price and on payment terms no less favorable to NDA than those
specified in such notice of offer to the Holders. However, if such third party
sale or sales are not consummated within such ninety (90) day period, NDA shall
not sell such securities as shall not have been purchased within such period
without again complying with this Section 5.2.
Notwithstanding the foregoing, the terms and conditions of this Section 5.2
shall terminate and be of no further force or effect upon the closing of a firm
commitment underwritten public offering of NDA's securities that qualifies as a
Designated Offering.
SECTION 5.3. Corporate Existence. NDA shall maintain and cause each of its
subsidiaries to maintain their respective corporate existence, rights and
franchises in full force and effect.
SECTION 5.4. Properties, Business, Insurance. NDA shall maintain and cause
each of its subsidiaries to maintain as to their respective properties and
business, with financially sound and reputable insurers, insurance against such
casualties and contingencies and of such types and in such amounts as is
customary for companies similarly situated, including but not limited to fire
and other risks insured against by extended coverage, product liability
insurance and public liability insurance against claims for personal injury or
death or property damage occurring upon, in, about or in connection with the use
of any properties owned, occupied or controlled by NDA, which insurance shall be
deemed by NDA to be sufficient; and maintain workers' compensation insurance and
such other insurance as may be required by law. For so long as its Board of
Directors determines it to be desirable, NDA shall maintain in effect "key
person" life insurance policies, payable to NDA, as set forth in Section 4.1(n).
NDA shall not cause or permit any assignment or change in beneficiary and shall
not borrow against any such policy.
24
SECTION 5.5. Inspection, Consultation and Advice. NDA shall permit and
cause each of its subsidiaries to permit designated representatives of
UniHolding at the expense of UniHolding, to visit and inspect any of the
properties of NDA and its subsidiaries, examine their books and take copies and
extracts therefrom, discuss the affairs, finances and accounts of NDA and its
subsidiaries with their officers, employees and public accountants (and NDA
hereby authorizes said accountants to discuss with UniHolding and such designees
such affairs, finances and accounts), and consult with and advise the management
of NDA and its subsidiaries as to their affairs, finances and accounts, all at
reasonable times and upon reasonable notice.
SECTION 5.6. Restrictive Agreements Prohibited. Neither NDA nor any of its
subsidiaries shall become a party to any agreement which by its terms restricts
NDA's performance of this Agreement, the Option Agreement, the Registration
Rights Agreement, the Stockholders Agreement or NDA's Certificate of
Incorporation.
SECTION 5.7. Transactions with Affiliates. Except for transactions
contemplated by this Agreement or as otherwise specifically approved by
UniHolding, neither NDA nor any of its subsidiaries shall enter into any
transaction with any director, officer, employee or holder of more than 5% of
the outstanding capital stock of any class or series of capital stock of NDA or
any of its subsidiaries, member of the family of any such person, or any
corporation, partnership, trust or other entity in which any such person, or
member of the family of any such person, is a director, officer, trustee,
partner or holder of more than 5% of the outstanding capital stock thereof (each
an "Affiliate"), except for transactions on customary terms related to such
person's employment with NDA.
SECTION 5.8. Expenses of Directors. NDA shall promptly reimburse in full
each director of NDA who is not an employee of NDA for all of his or her
reasonable out-of-pocket expenses incurred in attending each meeting of the
Board of Directors of NDA or any Committee thereof.
SECTION 5.9. Use of Proceeds. NDA shall use the proceeds from the sale of
the Shares solely for such uses as set forth in the attached Schedule 5.9.
25
SECTION 5.10. Board of Directors Meetings. NDA shall use its best efforts
to ensure that meetings of its Board of Directors are held at least four times
each year and at least once each quarter.
SECTION 5.11. Budget and Operating Forecast. For each fiscal year of NDA
commencing with the fiscal year of NDA beginning on January 1, 1996, at least 30
days prior to the last day of the prior fiscal year, management of NDA will
prepare and submit to the Board of Directors of NDA, annual consolidated
operating and capital budgets, cash flow projections and income and loss
projections in respect of such fiscal year, with monthly breakdowns in
reasonable detail prepared by management and approved by the President and Chief
Financial Officer of NDA, and, promptly after preparation, provide any revisions
to any of the foregoing (the "Budget"). The Budget shall be accepted as the
Budget for such fiscal year when it has been approved by the Board of Directors
of NDA. The Budget shall be reviewed by NDA periodically and all changes therein
and all material deviations therefrom shall be resubmitted to the Board of
Directors of NDA in advance and shall be accepted when approved by the Board of
Directors of NDA, and NDA shall not make any such changes or material deviations
to or from the Budget without such prior approval of the Board of Directors of
NDA.
SECTION 5.12. Compensation. NDA shall not pay to its management
compensation in excess of that compensation customarily paid to management in
companies of similar size, of similar maturity, and in similar businesses.
SECTION 5.13. By-laws. NDA shall at all times cause its Bylaws to provide
that, (a) unless otherwise required by the laws of the State of Delaware, (i)
any two directors and (ii) any holder or holders of at least 20% of the
outstanding shares of Common Stock shall have the right to call a meeting of the
Board of Directors or stockholders, and (b) the number of directors fixed in
accordance therewith shall in no event conflict with any of the terms or
provisions of the Stockholders' Agreement. NDA shall at all times maintain
provisions in its By-laws and/or Certificate of Incorporation indemnifying all
directors against liability and absolving all directors from liability to NDA
and its stockholders to the maximum extent permitted under the laws of the State
of Delaware, or, if there is a reduction in the permitted scope of
indemnification under Delaware law, at the level existing prior to such
reduction for any actions occurring before such reduction.
SECTION 5.14. Employee Agreements. NDA shall obtain, and shall cause its
subsidiaries to use their best efforts to obtain, an Employee Agreement from all
future officers, key employees and other employees who will have access to
confidential information of NDA, upon their employment by NDA.
26
SECTION 5.15. Maintenance of Ownership of Subsidiaries. NDA shall not sell
or otherwise transfer any shares of capital stock of any Subsidiary, except to
NDA or another Subsidiary, or permit any Subsidiary to issue, sell or otherwise
transfer any shares of its capital stock or the capital stock of any Subsidiary,
except to NDA or another Subsidiary.
SECTION 5.16. Compliance with Laws. NDA shall comply, and cause each
Subsidiary to comply, with all applicable laws, rules, regulations and orders,
noncompliance with which could materially adversely affect its business or
condition, financial or otherwise.
SECTION 5.17. Keeping of Records and Books of Account. NDA shall keep, and
cause each Subsidiary to keep, adequate records and books of account, in which
complete entries will be made in accordance with generally accepted accounting
principles consistently applied, reflecting all financial transactions of NDA
and such Subsidiary, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.
SECTION 5.18. Obligations and Taxes. NDA shall pay all of its indebtedness
and obligations promptly and in accordance with their terms and pay and
discharge promptly all taxes, assessments and governmental charges or levies
imposed upon it or its income or profits or in respect of its property, before
the same shall become in default, as well as all lawful claims for labor and
supplies or otherwise which, if unpaid, might become a lien or charge upon such
properties or any part thereof; provided however, that NDA shall not be required
to pay and discharge or to cause to be paid and discharged any tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and NDA shall set aside on
its books such reserves as are required by generally accepted accounting
principles with respect to any such tax, assessment, charge, levy or claim so
contested.
SECTION 5.19. Indemnification. NDA shall, with respect to the
representations and warranties made by NDA herein, indemnify, defend and hold
UniHolding harmless against all liability, loss or damage, together with all
reasonable costs and expenses related thereto (including legal and accounting
fees and expenses) (collectively, "Damages"), arising from the untruth,
inaccuracy or breach of any such representations, and warranties of NDA;
Provided however, that UniHolding shall only be entitled to indemnification
hereunder if the aggregate of all Damages exceeds $50,000; provided further,
that if the aggregate of all Damages exceeds $50,000, UniHolding shall be
entitled to indemnification for all Damages beginning with the first dollar of
Damages suffered or incurred.
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SECTION 5.20. Corporate Actions. Prior to a Designated Offering, NDA will
not take any of the following actions without the prior affirmative vote of at
least four directors, which vote shall not be unreasonably withheld or unduly
delayed:
(a) Authorize or issue shares of any class or series of equity security or
of any securities convertible into any class or series of equity securities,
except for grants of Common Stock pursuant to the Stock Option Plan.
(b) Merge or consolidate into or with any other corporation or sell all of
substantially all of NDA's assets, or sell pledge, license or otherwise dispose
of assets (tangible or intangible) of NDA for consideration of more than
$100,000 (other than licenses granted or assets sold in the ordinary course of
business).
(c) Redeem, repurchase, retire or otherwise acquire any shares of equity
securities, except as contemplated by this Agreement or the Stockholders'
Agreement.
(d) Pay or declare any dividend or distribution on any shares of NDA's
capital stock.
(e) Voluntarily liquidate, dissolve or wind up NDA or conduct any form of
recapitalization or reorganization of NDA.
(f) Incur any obligation involving payments or consideration of more than
$100,000 per year, except for short term borrowing for working capital or
borrowings to fund parts, materials, and labor costs to fill purchase orders.
(g) Sell any equity or debt securities in NDA's present or future
subsidiaries to third parties.
(h) Amend or repeal any provision of, or add any provision to, NDA's
Certificate of Incorporation or NDA's by-laws.
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(i) Adopt any fundamental change to NDA's business, i.e. changes which
would result in more than 25% of NDA's assets being deployed in, or gross
revenues derived from, businesses other than clinical laboratories or blood
testing.
(j) Acquire any capital asset for more than $100,000 and or make any
investment in or acquire another business entity.
(k) Enter into any transaction with an Affiliate, except for transactions
on customary terms related to such person's employment with NDA.
(l) Make any investment in or acquire any other business entity.
(m) Sell or transfer any intangible property other than licenses granted in
the ordinary course of business.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby whether or not such
transactions shall be consummated.
SECTION 6.2. Survival of Agreements. All covenants, agreements,
representations and warranties made herein or in the Registration Rights
Agreement, the Stockholders' Agreement, or any certificate or instrument
delivered to UniHolding pursuant to or in connection with this Agreement, the
Registration Rights Agreement or the Stockholders' Agreement, shall survive the
execution and delivery of this Agreement, the Registration Rights Agreement, the
Stockholders' Agreement and the issuance, sale and delivery of the Shares for a
period of three (3) years from the date of this Agreement. All statements
contained in any certificate or other instrument delivered by NDA hereunder or
thereunder or in connection herewith or therewith shall be deemed to constitute
representations and warranties made by NDA.
SECTION 6.3. Brokerage. Each party hereto will indemnify and hold harmless
the other party against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
SECTION 6.4. Parties in Interest. All representations, covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. Without limiting the
generality of the foregoing, all representations, covenants and agreements
benefiting UniHolding shall inure to the benefit of any and all subsequent
holders from time to time of UniHolding's shares of Common Stock.
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SECTION 6.5. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person or
mailed by certified or registered mail, return receipt requested, or telexed in
the case of non-U.S. residents, addressed as follows:
(a) if to NDA, at NDA Clinical Trial Services, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: President, with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Meltzer, Lippe, Goldstein, Wolf, ▇▇▇▇▇▇▇▇▇ & Sazer, P.C., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; and
(b) if to UniHolding, at the address set forth opposite its name, with a
copy to ▇▇. ▇▇▇▇ Hoekfelt, Chief Operating Officer, UniHolding Corp., ▇▇, ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇;
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
SECTION 6.6. Governing Law. This Agreement shall be construed and enforced
in accordance with, and governed by, the laws of the State of New York, except
where by its terms the General Corporation Law of Delaware applies, regardless
of the jurisdiction of creation or domicile of NDA or its successors or of
UniHolding or its successors (without giving effect to the choice of law
principles of such State). Each party hereby consents to the exclusive
jurisdiction of the State and Federal courts in the State of New York in
connection with any action arising out of the matters covered hereby and any
litigation commenced by any party arising from the transactions provided for
hereby or relating hereto shall only be commenced in such courts.
Notwithstanding the foregoing, NDA agrees that if Uniholding brings suit, and
its principal place of business has moved to another location in the United
States, NDA will consent to jurisdiction in the Federal and State Courts of the
location in that state that is then Uniholding's principal place of business.
Each party hereby irrevocably submits to the personal jurisdiction of the above
courts, irrevocably agrees not to interpose any defenses based on lack of
personal jurisdiction or forum non conveniens, and irrevocably agrees to service
of any process in connection with this agreement by certified or registered
mail, in addition to any other service permitted by law.
SECTION 6.7. Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto, constitutes the sole and entire agreement of the parties with
respect to the subject matter hereof. All Schedules and Exhibits hereto are
hereby incorporated herein by reference.
SECTION 6.8. Counterparts. This Agreement may be executed in 9/27/95 two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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SECTION 6.9. Amendments. This Agreement may not be amended or modified, and
no provisions hereof may be waived, without the written consent of NDA and
UniHolding.
SECTION 6.10. Severability. If any provision of this Agreement shall be
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision and of the entire Agreement shall not be
affected thereby.
SECTION 6.11. Titles and Subtitles. The titles and subtitles used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting any term or provision of this Agreement.
SECTION 6.12. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable,to both the singular and plural forms of the terms defined):
(a) "Designated Offering" shall mean a firmly underwritten public offering
of securities of NDA in an aggregate amount in excess of $5,000,000 at a per
share price at least equal to $364.05 per share, as adjusted for stock splits,
combinations and other recapitalizations; provided, that immediately following
the consummation of such offering, NDA's shares are listed on a national stock
exchange, the National Association of Securities Dealers Automated Quotation
National Market or the National Association of Securities Dealers Automated
Quotation SmallCap Market.
(b) "person" shall mean an individual, corporation, trust, partnership,
joint venture, unincorporated organization, government agency or any agency or
political subdivision thereof, or other entity.
(c) "Subsidiary" shall mean, as to NDA and in connection with any
Subsidiary NDA may own subsequent to the date of this Agreement, any corporation
of which more than 50% of the outstanding stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by NDA, or by one
or more of its Subsidiaries, or by NDA and one or more of its Subsidiaries.
SECTION 6.13. Assignment. This Agreement may not be assigned by either
party without the consent of the other. It is understood and agreed that
UniHolding may not, without NDA's prior written consent, under any circumstances
transfer its shares in NDA to a competitor of NDA.
IN WITNESS WHEREOF, NDA and UniHolding have executed this Stock Purchase
Agreement as of the day and year first above written.
NDA CLINICAL TRIAL
SERVICES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CEO
[Corporate Seal]
Attest:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Secretary
UNIHOLDING CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary/General Counsel
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