Document/Exhibit Description Pages Size
1: 10-K Form 10-K for Digene Corp 83 401K
2: EX-10.37 Stock Purchase Agreement Dated as of June 30,1998 37 128K
3: EX-21 Subsidiaries of the Registrant 1 4K
4: EX-23.1 Consent of Ernst & Young LLP 1 6K
5: EX-27 Financial Data Schedule 1 6K
EX-10.37 — Stock Purchase Agreement Dated as of June 30,1998
Exhibit Table of Contents
EXHIBIT 10.37
STOCK PURCHASE AGREEMENT
BY AND AMONG
DIGENE CORPORATION
AND
STICHTING RESEARCHFONDS PATHOLOGIE,
EWALD C.R.M. KEIJSER
CHRISTOPHORUS J.L.M. MEIJER
and
JAN M.M. WALBOOMERS
June 30, 1998
TABLE OF CONTENTS
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Page
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1. Definitions......................................................... 1
2. Acquisition of Stock................................................ 6
(a) Purchase Price................................................. 6
(b) Escrow......................................................... 6
(c) Stock Options.................................................. 6
(d) The Closing.................................................... 6
(e) Deliveries at the Closing...................................... 6
3. Royalties........................................................... 7
(a) Royalty Payments on Licensed Products and
Combination Products........................................... 7
(b) Royalty Payments on Technology Licensing Fees.................. 7
(c) Maximum Royalty Payments....................................... 8
4. Representations and Warranties Concerning the
Transaction......................................................... 8
(a) Representations and Warranties of the
Shareholders................................................... 8
(b) Representations and Warranties of the Buyer.................... 9
5. Representations and Warranties Concerning the Company............... 10
(a) Organization, Qualification, and Corporate Power............... 11
(b) Capitalization................................................. 11
(c) Noncontravention............................................... 12
(d) Brokers' Fees.................................................. 12
(e) Title to Assets................................................ 12
(f) Subsidiaries................................................... 12
(g) Financial Statements........................................... 12
(h) Events Subsequent to Most Recent Fiscal Year End............... 13
(i) Undisclosed Liabilities........................................ 14
(j) Legal Compliance............................................... 14
(k) Tax Matters.................................................... 14
(l) Real Property.................................................. 15
(m) Intellectual Property.......................................... 15
(n) Tangible Assets................................................ 17
(o) Inventory...................................................... 17
(p) Contracts...................................................... 17
(q) Notes and Accounts Receivable.................................. 18
(r) Powers of Attorney............................................. 18
(s) Litigation..................................................... 18
(t) Guaranties..................................................... 18
(u) Environmental, Health, and Safety Matters...................... 18
(v) Certain Business Relationships with the Company................ 18
6. Pre-Closing Covenants............................................... 19
(a) General....................................................... 19
(b) Notices and Consents.......................................... 19
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(c) Operation of Business......................................... 19
(d) Preservation of Business...................................... 19
(e) Notice of Developments........................................ 19
(f) Exclusivity................................................... 19
7. Post-Closing Covenants.............................................. 20
(a) General....................................................... 20
(b) Certain Taxes................................................. 20
8. Conditions to Obligation to Close................................... 20
(a) Conditions to Obligation of the Buyer......................... 20
(b) Conditions to Obligation of the Shareholders.................. 22
9. Remedies for Breaches of This Agreement............................. 22
(a) Survival of Representations and Warranties.................... 22
(b) Indemnification Provisions for Benefit of the
Buyer......................................................... 23
(c) Indemnification Provisions for Benefit of the
Shareholders.................................................. 23
(d) Determination of Adverse Consequences......................... 23
(e) Recoupment Under Other Agreements............................. 23
(f) Other Indemnification Provisions.............................. 24
10. Termination......................................................... 24
(a) Termination of Agreement...................................... 24
(b) Effect of Termination......................................... 25
11. Securities Laws Compliance Procedures............................... 25
(a) Knowledge Respecting the Buyer................................ 25
(b) Status of Shares to be Issued................................. 25
(c) Holding Period................................................ 26
12. Miscellaneous................................................. 27
(a) Press Releases and Public Announcements....................... 27
(b) No Third-Party Beneficiaries.................................. 27
(c) Entire Agreement.............................................. 27
(d) Succession and Assignment..................................... 27
(e) Counterparts.................................................. 27
(f) Headings...................................................... 27
(g) Notices....................................................... 27
(h) Governing Law................................................. 28
(i) Amendments and Waivers........................................ 28
(j) Severability.................................................. 28
(k) Expenses...................................................... 29
(l) Construction.................................................. 29
(m) Incorporation of Exhibits, Annexes, and Schedules............. 29
(n) Specific Performance.......................................... 29
Exhibit A -- Historical Financial Statements
Exhibit B-1 -- Confidentiality and Non-Competition Agreement -
Ewald C.R.M. Keijser
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Exhibit B-2 -- Confidentiality and Non-Competition Agreement -
Christophorus J.L.M. Meijer
Exhibit B-3 -- Confidentiality and Non-Competition Agreement -
Jan M.M. Walboomers
Exhibit C-1 -- Consulting Agreement - Ewald C.R.M. Keijser
Exhibit C-2 -- Consulting Agreement - Christophorus J.L.M. Meijer
Exhibit C-3 -- Consulting Agreement - Jan M.M. Walboomers
Annex 1 -- Notarial Deed of Transfer
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STOCK PURCHASE AGREEMENT
This Agreement is entered into as of June 30th, 1998, by and among Digene
Corporation (the "Buyer"), and Stichting ResearchFonds Pathologie (the
"Foundation"), Ewald C.R.M. Keijser ("Keijser"), Christophorus J.L.M. Meijer
("Meijer") and Jan M.M. Walboomers ("Walboomers"). The Foundation, Keijser,
Meijer and Walboomers are sometimes hereinafter referred to individually as a
"Shareholder" and collectively as the "Shareholders." The Buyer and the
Shareholders are referred to collectively herein as the "Parties."
The Shareholders own all of the outstanding capital stock of Viropath
B.V. ("the Company"), a private limited company with limited liability,
registered at Amsterdam, The Netherlands, consisting of 40,000 shares of stock.
This Agreement contemplates a transaction in which the Buyer will
purchase from the Shareholders, and the Shareholders will sell to the Buyer, all
of the outstanding capital stock of the Company in return for shares of voting
stock of the Buyer on the terms and conditions hereinafter set forth.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties, intending to be legally bound, hereby
agree as follows.
1. Definitions.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could reasonably be expected to
form the reason for any specified consequence.
"Closing" has the meaning set forth in Section 2(c) below.
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"Closing Date" has the meaning set forth in Section 2(c) below.
"Combination Product" means a product containing (i) one or more Licensed
Products in combination with (ii) one or more diagnostically active products
which do not use technology covered by a Valid Claim.
"Company Share" means a share of stock, par value one guilder (Dfl. 1.00)
per share, of the Company.
"Confidential Information" means any information concerning the
businesses and affairs of the Company that (i) is not already generally
available to the public and (ii) is otherwise treated by the Company as
confidential and proprietary information.
"Disclosure Schedule" has the meaning set forth in Section 5 below.
"Environmental, Health, and Safety Requirements" shall mean all federal,
state, local and foreign statutes, regulations, ordinances and other provisions
having the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation, each as amended and as now or
hereafter in effect.
"Financial Statements" has the meaning set forth in Section 5(g) below.
"GAAP" means generally accepted accounting principles in The Netherlands
as in effect from time to time.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in
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connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including data and related documentation), (g) all
other proprietary rights, and (h) all copies and tangible embodiments thereof
(in whatever form or medium).
"Liability" or "Liabilities" means any liability or liabilities (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for Taxes.
"Licensed Products" means diagnostic assay products which are covered in
whole or in part by a Valid Claim in the country in which such products are
manufactured, used or sold.
"Most Recent Balance Sheet" means the balance sheet contained within the
Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in
Section 5(g) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section 5(g)
below.
"Most Recent Fiscal Year End" has the meaning set forth in Section 5(h)
below.
"Net Sales" means, with respect to Licensed Products, the gross amount
invoiced by the Buyer or its Affiliates in connection with the sale of Licensed
Products, expressed in U.S. Dollars, less the sum of the following (to the
extent reflected in the gross amount invoiced):
(i) the cost of packaging, insurance, freight, storage and
transportation billed to the purchaser;
(ii) normal discounts actually granted;
(iii) rebates actually paid to individual or group purchasers of
Licensed Products, including those made to patients, healthcare
providers, purchasing groups, insurers or government agencies, which are
mandated by federal or other relevant governmental authority;
(iv) credits allowed for Licensed Products returned or not
accepted by customers; and
(v) taxes (including but not limited to sales, value added,
consumption and similar taxes, but excluding income and similar taxes)
actually incurred, paid or collected and
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passed onto the relevant tax authority in connection with the
manufacture, importation, use, sale or delivery of Licensed Products to
customers insofar as those taxes are in whole or in part irrevocable and
not offsetable or creditable against any other taxes paid or payable by
the Buyer and its Affiliates.
"Net Sales" means, with respect to Combination Products, the amount
determined by multiplying
(A) the gross amount invoiced by the Buyer or its Affiliates in connection with
the sale of Combination Products, expressed in U.S. Dollars, less the sum of the
following (to the extent reflected in the gross amount invoiced):
(i) the cost of packaging, insurance, freight, storage and
transportation billed to the purchaser;
(ii) normal discounts actually granted;
(iii) rebates actually paid to individual or group purchasers of
Combination Products, including those made to patients, healthcare
providers, purchasing groups, insurers or government agencies, which are
mandated by federal or other relevant governmental authority;
(iv) credits allowed for Combination Products returned or not
accepted by customers; and
(v) taxes (including but not limited to sales, value added,
consumption and similar taxes, but excluding income and similar taxes)
actually incurred, paid or collected and passed onto the relevant tax
authority in connection with the manufacture, importation, use, sale or
delivery of Combination Products to customers insofar as those taxes are
in whole or in part irrevocable and not offsetable or creditable against
any other taxes paid or payable by the Buyer and its Affiliates;
by (B) a fraction, the numerator of which shall be the cost of the Licensed
Product contained in such Combination Product and the denominator of which shall
be the total cost of the Combination Product, the cost in each case to be
determined in accordance with Digene's regular accounting practice, consistently
applied.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2(b) below.
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"Securities Act" means the United States Securities Act of 1933, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary Course of Business and not incurred
in connection with the borrowing of money.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Internal Revenue Code of 1986, as amended ), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Valid Claim" means any claim of an issued, unexpired patent or of a
patent hereinafter issued (and not expired) pursuant to a pending patent
application, which patents and applications are set forth on Section 5(m)(iii)
of the Disclosure Schedule; provided that such patents and applications have
neither been held unenforceable by the final decision of a court or governmental
agency of competent jurisdiction, unappealable or unappealed within the time
allowed for appeal, nor been admitted by the holder of the patent to be invalid
or unenforceable through reissue, disclaimer or otherwise.
2. Acquisition of Stock.
(a) Purchase Price. On and subject to the terms and conditions of this
Agreement, the Shareholders shall convey, transfer and assign to the Buyer, free
and clear of all liens, security interests, pledges, claims and encumbrances of
every kind, nature and description, and the Buyer shall accept from the
Shareholders, all but not less than all of the outstanding
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capital stock of the Company in exchange for a total of that number of shares of
Common Stock of Digene Corporation, par value $0.01 per share (said shares
hereinafter called the "Buyer Stock"), equal to One Million Five Hundred
Thousand ($1,500,000) U.S. Dollars in the aggregate (the "Purchase Price"),
divided by the average of the closing trading prices per share of Digene
Corporation Common Stock for the twenty trading days immediately preceding (but
excluding) the second trading day immediately preceding the Closing Date (as
hereinafter defined) as posted on the Nasdaq National Market.
(b) Escrow. From and after the Closing (as hereinafter defined), the
Buyer Stock, which shall be registered to each Shareholder in the amount set
forth opposite such Shareholder's name on Schedule 2(a), shall be held in escrow
by the Buyer for the purpose of providing security for the representations and
warranties of the Shareholders set forth herein. For a period of one year
following the Closing Date, one hundred percent of the Buyer Stock shall be held
in escrow by the Buyer, and for a period of six months following the one year
anniversary of the Closing Date, thirty percent of the Buyer Stock shall be held
in escrow by the Buyer. For federal income tax purposes, each Shareholder shall
be deemed the owner of his or its pro rata portion of the Buyer Stock while such
shares are held in escrow by the Buyer.
(c) Stock Options. In addition to the Purchase Price, at the Closing (as
hereinafter defined) the Buyer shall irrevocably grant options, as of the
Closing Date (as hereinafter defined), to purchase an aggregate of 50,000 shares
of Digene Corporation Common Stock (the "Option Shares") to Messrs. Meijer,
Walboomers and Keijser (20,000 options to Meijer, 20,000 options to Walboomers
and 10,000 options to Keijser), which options shall be granted pursuant to the
terms of the Buyer's 1997 Stock Option Plan and will become exercisable in equal
amounts on each of the first five anniversaries of the Closing Date at an
exercise price equal to the fair market value of the Common Stock on the Closing
Date.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Ballard Spahr
Andrews & Ingersoll, LLP, 1735 Market Street, 51st Floor, Philadelphia,
Pennsylvania 19103, commencing at 9:00 a.m. local time on June 30, 1998 or such
other date or place as the Buyer and the Shareholders may mutually determine
(the "Closing Date").
(e) Deliveries at the Closing. At the Closing: (i) a notarial deed of
transfer of all of the Company Shares substantially in the form as attached
hereto as Annex 1 will be executed by one of the Civil Law Notaries of Ekelmans
Den Hollander in the presence of both the Shareholders and the Buyer
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to which extent each of the Shareholders, the Company and the Buyer will grant a
power of attorney to each of the lawyers of Ekelmans Den Hollander to execute
such deed on behalf of each of them; and (ii) Keijser will deliver to the Buyer
a notarial deed of transfer evidencing the transfer of 10,000 Company Shares
from HOM Consultancy B.V. to Keijser.
3. Royalties.
(a) Royalty Payments on Licensed Products and Combination Products.
Within sixty days after January 1 and July 1 of each year, the Buyer shall
deliver to the Stichting ResearchFonds Pathologie, as representative of the
Shareholders (the "Representative"), a royalty of One-Half of One Percent (0.5%)
of the Buyer's or its Affiliates' Net Sales of Licensed Products and Combination
Products for the preceding six month period ("Royalty Payment on Licensed
Products and Combination Products"), together with a report of: (i) the quantity
of Licensed Products and Combination Products sold; (ii) Net Sales expressed in
U.S. Dollars; and (iii) the total Royalty Payment on Licensed Products and
Combination Products payable in U.S. Dollars. Licensed Products and Combination
Products shall be considered sold when invoiced to a customer by the Buyer or
its Affiliates. Royalty Payments on Licensed Products and Combination Products
shall be due for sales to an Affiliate of the Buyer only if a Licensed Product
or Combination Product is consumed by such Affiliate, in which case the Royalty
Payment on Licensed Products and Combination Products applicable thereto shall
be calculated based upon the invoiced price to such Affiliate or a reasonable
arms length invoice price if such Affiliate is treated on a more favorable basis
than the general trade. Only one Royalty Payment on Licensed Products and
Combination Products shall be due the Representative on Net Sales of a Licensed
Product or Combination Product irrespective of the number of Valid Claims which
cover such Licensed Product or Combination Product. If requested in writing by
the Representative, the Buyer shall provide the Representative its calculations
with respect to its determination of Net Sales for Combination Products.
(b) Royalty Payments on Technology Licensing Fees. Within sixty days
after January 1 and July 1 of each year, the Buyer shall deliver to the
Representative a royalty of Five Percent (5%) of the Buyer's fees received from
third parties, during the preceding six month period, for the licensing of
technology covered by a Valid Claim to such third parties, but not relating to
Licensed Products or Combination Products sold to such third parties ("Royalty
Payment on Technology Licensing Fees"), together with a report of: (i) fees
received from licensing such technology to third parties, expressed in U.S.
Dollars; and (ii) the total Royalty Payment on Technology Licensing Fees payable
in U.S. Dollars. Royalty Payments on Technology Licensing Fees
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shall be paid for the licensing of technology covered by Valid Claims only.
(c) Maximum Royalty Payments. The aggregate cumulative payment for all
Royalty Payments on Licensed Products and Combination Products together with
all Royalty Payments on Technology Licensing Fees, which the Buyer is obligated
to make under Sections 3(a) and (b) above, shall not exceed One Million
($1,000,000) U.S. Dollars.
4. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Shareholders. Each Shareholder
severally represents and warrants to the Buyer that the statements as to such
Shareholder contained in this Section 4(a) are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 4(a)).
(i) Ownership of Capital Stock of the Company. The Shareholder
owns the number of shares of stock of the Company set forth opposite such
Shareholder's name on Schedule 4(a). The Shareholder has good, marketable
and unencumbered title to such shares, free and clear of all liens,
security interests, pledges, claims, options and rights of others
(collectively, "Stock Rights"). There are no restrictions on the
Shareholder's right to transfer such shares to the Buyer pursuant to this
Agreement.
(ii) Authorization of Transaction. The Shareholder has full power
and authority to execute and deliver this Agreement and to perform his or
its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of the Shareholder, enforceable in accordance
with its terms and conditions, except as enforceability may be limited by
bankruptcy, insolvency, moratorium and other similar laws affecting
creditors' rights generally and by general principles of equity, whether
considered in a proceeding at law or in equity.. The Shareholder need not
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement except for the
Notarial Deed of Transfer required for the transfer of the Company
Shares.
(iii) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court
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to which the Shareholder is subject or (B) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Shareholder is a
party or by which such Shareholder is bound or to which any of such
Shareholder's assets is subject.
(iv) Brokers' Fees. The Shareholder has no Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the
Buyer could become liable or obligated.
(v) Consultant Agreements. The consultant agreements between
Abbott Laboratories and each of Walboomers and Meijer, as referred to in
the Abbott License Agreement, expired as of November 10, 1997 and have
not been renewed.
(b) Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Shareholders that the statements contained in this Section 4(b)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 4(b)).
(i) Organization of the Buyer; Authorization of Transaction. The
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate
power to execute and deliver this Agreement and to perform its
obligations hereunder. The authorized capital stock of the Buyer consists
of 1,000,000 shares of Preferred Stock and 50,000,000 shares of Common
Stock. The Buyer has, and will continue to have at all times, a
sufficient number of authorized but unissued shares of Common Stock to be
able to issue all of the shares of the Buyer Stock which are to be issued
under Section 2(a) hereof and all the Option Shares issuable on exercise
of the options to be granted under Section 2(b) hereof. The execution,
delivery and performance of this Agreement by the Buyer have been duly
authorized by all necessary corporate action on the part of the Buyer,
and this Agreement constitutes the valid and binding obligation of the
Buyer, enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium and
other similar laws affecting creditors' rights generally and by general
principles of equity, whether considered in a proceeding at law or in
equity.
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(ii) Status of the Buyer Stock. The shares of the Buyer Stock,
when issued and delivered pursuant to the terms of this Agreement and the
shares of Common Stock when issued, delivered and paid for upon exercise
of the options to be granted under Section 2(b) hereof, will be duly
authorized, validly issued and outstanding, fully paid and non-assessable
and will be listed for trading on the Nasdaq National Market. The Buyer
need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this
Agreement, except as such may be required by the National Association of
Securities Dealers.
(iii) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Buyer is
subject or any provision of its charter or bylaws or (B) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which the Buyer is a
party or by which it is bound or to which any of its assets is subject.
(iv) The Buyer's Forms 10-K for the year ended June 30, 1997,
10-Qs for the quarters ended September 30, 1997, December 31, 1997 and
March 31, 1998 and the proxy statement for the 1997 Annual Meeting of
Stockholders do not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(v) Brokers' Fees. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which the
Shareholders could become liable or obligated.
5. Representations and Warranties Concerning the Company. The Foundation
jointly and severally represents and warrants and each of Keijser, Meijer and
Walboomers severally represents and warrants to the Buyer that the statements
contained in this Section 5 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 5), except as set forth
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in the disclosure schedule delivered by the Shareholders to the Buyer on the
date hereof (the "Disclosure Schedule"). Nothing in the Disclosure Schedule
shall be deemed adequate to disclose an exception to a representation or
warranty made herein, however, unless the Disclosure Schedule identifies the
exception with reasonable particularity and describes the relevant facts in
reasonable detail. Without limiting the generality of the foregoing, the mere
listing (or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a representation or warranty made herein
(unless the representation or warranty has to do with the existence of the
document or other item itself). The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 5.
(a) Organization, Qualification, and Corporate Power. The Company is a
limited company with limited liability registered at Amsterdam, The Netherlands,
and is validly existing, and in good standing under the laws of The Netherlands.
The Company is not, and is not required to be, qualified to conduct business in
any other jurisdiction. The Company has full corporate power and authority and
all licenses, permits, and authorizations necessary to carry on the businesses
in which it is engaged and in which it presently proposes to engage and to own
and use the properties owned and used by it. Section 5(a) of the Disclosure
Schedule lists the managing directors and officers of the Company. The
Shareholders have delivered to the Buyer correct and complete copies of the
Company's Deed of Incorporation and Articles of Association (as amended to
date). The minute books (containing the records of meetings of the stockholders,
the board of managing directors, and any committees of the board of managing
directors), the stock certificate books, and the stock record books of the
Company are correct and complete. The Company is not in default under or in
violation of any provision of its Deed of Incorporation or Articles of
Association.
(b) Capitalization. The entire authorized capital stock of the Company
consists of Two Hundred Thousand guilders (Dfl. 200,000.00) divided into Two
Hundred Thousand (200,000) Company Shares, of one guilder (Dfl. 1.00) each, of
which 40,000 shares are issued and outstanding. All of the issued and
outstanding Company Shares have been duly authorized, are validly issued, fully
paid, and nonassessable, and are held of record by the Shareholders as set forth
in Section 4(a) of the Disclosure Schedule. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could require
the Company to issue, sell, or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to the
Company. There are no voting
11
trusts, proxies, or other agreements or understandings with respect to the
voting of the capital stock of the Company.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Company is subject or any provision
of the charter or bylaws of the Company or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Company is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets). Except as set forth in Section 5(c) of the
Disclosure Schedule, the Company does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
(d) Brokers' Fees. The Company has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Title to Assets. Except as set forth in Section 5(e) of the
Disclosure Schedule, the Company has good and marketable title to, or a valid
leasehold interest in, the properties and assets used by it, located on its
premises, or shown on the Most Recent Balance Sheet or acquired after the date
thereof, free and clear of all Security Interests, except for properties and
assets disposed of in the Ordinary Course of Business since the date of the Most
Recent Balance Sheet.
(f) Subsidiaries. The Company has no Subsidiaries. The Company has no
direct or indirect equity participation in any corporation, partnership, trust,
limited liability company or other business association.
(g) Financial Statements. Attached hereto as Exhibit A are the following
financial statements (collectively, the "Financial Statements"): (i) unaudited
balance sheets and statements of income, changes in stockholders' equity, and
cash flow as of and for the fiscal years ended December 31, 1995, 1996 and 1997
for the Company; and (ii) unaudited balance sheets and statements of income (the
"Most Recent Financial Statements") as of and for the five months ended May 31,
1998 (the "Most Recent Fiscal Month End") for the Company. The Financial
Statements (including the
12
notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, present fairly the
financial condition of the Company as of such dates and the results of
operations of the Company for such periods, include all then outstanding
expenses and financial commitments of the Company, are correct and complete, and
are consistent with the books and records of the Company (which books and
records are correct and complete); provided, however, that the Most Recent
Financial Statements are subject to normal year-end adjustments (which will not
be material individually or in the aggregate) and lack footnotes and other
presentation items.
(h) Events Subsequent to Most Recent Fiscal Year End. Since December 31,
1997 (the "Most Recent Fiscal Year End"), there has not been any adverse change
in the business, financial condition, operations, results of operations, or
future prospects of the Company and the Company has made no distribution of its
assets, including cash, other than in the Ordinary Course of Business. Without
limiting the generality of the foregoing, since that date, except as set forth
in Section 5(h) of the Disclosure Schedule:
(i) the Company has not sold, leased, transferred, or assigned any
of its assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
(ii) the Company has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts, leases, or
licenses) outside the Ordinary Course of Business;
(iii) no party (including the Company) has accelerated,
terminated, modified, or cancelled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, or licenses)
to which the Company is a party;
(iv) the Company has not issued, sold or otherwise disposed of any
of its capital stock, or granted any options, warrants or other rights to
purchase or obtain (including upon conversion, exchange, or exercise) of
any of its capital stock;
(v) the Company has not declared, set aside, or paid any dividend
or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of its
capital stock;
13
(vi) the Company has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to its property;
(vii) there has been no material change in the relationship or
course of dealing between the Company and any of its suppliers or
customers that has had or is likely to have an adverse effect on the
business or prospects of the Company;
(viii) there has been no material change in, or proposal to make
any change in, any document, agreement or arrangement with any customer
of the Company, the effect of which would be to reduce the quantity of
services sold or to be sold to such customer during any time period;
(ix) there has not been any other material adverse occurrence,
event, incident, action, failure to act, or transaction outside the
Ordinary Course of Business involving the Company; and
(x) the Company has not committed to any of the foregoing.
(i) Undisclosed Liabilities. The Company has no material undisclosed
Liability required to be set forth in its Most Recent Financial Statements in
accordance with GAAP which is not so set forth (and there is no Basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to any Liability).
(j) Legal Compliance. The Company and its predecessors and Affiliates
have complied with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of local, national and foreign governments (and all agencies thereof).
(k) Tax Matters.
(i) The Company has filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all respects. All
Taxes owed by the Company (whether or not shown on any Tax Return) have
been paid. The Company is not currently the beneficiary of any extension
of time within which to file any Tax Return. No claim has ever been made
by an authority in a jurisdiction where the Company does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
(ii) The Shareholders do not expect any taxing authority to assess
any additional Taxes for any period for
14
which Tax Returns have been filed. There is no dispute or claim
concerning any Tax Liability of the Company. Section 5(k) of the
Disclosure Schedule lists all local, national and foreign income Tax
Returns filed with respect to the Company for taxable periods ended on or
after December 31, 1995, none of which have been audited. The
Shareholders have delivered to the Buyer correct and complete copies of
all income Tax Returns filed in The Netherlands, examination reports, and
statements of deficiencies assessed against or agreed to by the Company
since December 31, 1995.
(iii) The Company has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(l) Real Property.
(i) The Company owns no real property.
(m) Intellectual Property.
(i) The Company owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary
or desirable for the operation of the business of the Company as
presently conducted. Each item of Intellectual Property owned or used by
the Company immediately prior to the Closing hereunder will be owned or
available for use by the Company on identical terms and conditions
immediately subsequent to the Closing hereunder. The Company has taken
all reasonably necessary and desirable action to maintain and protect
each item of Intellectual Property that it owns or uses.
(ii) The Company has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and none of the Shareholders and the
managing directors and officers (and employees with responsibility for
Intellectual Property matters) of the Company has ever received any
charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any
claim that the Company must license or refrain from using any
Intellectual Property rights of any third party). To the knowledge of the
Shareholders, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of the Company.
(iii) Section 5(m)(iii) of the Disclosure Schedule identifies each
registration which has been issued to the Company, in the United States
or any other country, with respect to any of its Intellectual Property,
identifies each
15
pending application or application for registration which the Company has
made, in the United States or any other country, with respect to any of
its Intellectual Property, and identifies each license, agreement, or
other permission which the Company has granted to any third party with
respect to any of its Intellectual Property. The Shareholders have
delivered to the Buyer correct and complete copies of all such patents,
registrations, applications, licenses, agreements, and permissions.
Section 5(m)(iii) of the Disclosure Schedule also identifies each trade
name or unregistered trademark used by the Company in connection with its
business. With respect to each item of Intellectual Property identified
in Section 5(m)(iii) of the Disclosure Schedule:
(A) the Company possesses all right, title, and interest in
and to the item, free and clear of any Security Interest, license,
or other restriction;
(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or threatened which
challenges the legality, validity, enforceability, use, or
ownership of the item; and
(D) the Company has never agreed to indemnify any Person
for or against any interference, infringement, misappropriation,
or other conflict with respect to the item.
(iv) Section 5(m)(iv) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that the
Company uses pursuant to license, sublicense, agreement, or permission.
The Shareholders have delivered to the Buyer correct and complete copies
of all such licenses, sublicenses, agreements, and permissions. With
respect to each item of Intellectual Property required to be identified
in Section 5(m)(iv) of the Disclosure Schedule:
(A) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in
full force and effect;
(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of
the transactions contemplated hereby;
16
(C) no party to the license, sublicense, agreement, or
permission is in breach or default, and no event has occurred
which with notice or lapse of time would constitute a breach or
default or permit termination, modification, or acceleration
thereunder;
(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(E) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or threatened which
challenges the legality, validity, or enforceability of the
underlying item of Intellectual Property; and
(F) the Company has not granted any sublicense or similar
right with respect to the license, sublicense, agreement, or
permission.
(v) The Company will not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any Intellectual
Property rights of third parties as a result of the continued operation
of its businesses as presently conducted and as presently proposed to be
conducted.
(n) Tangible Assets. The Company does not own or lease any buildings,
machinery, equipment, or other tangible assets.
(o) Inventory. The Company has no inventory.
(p) Contracts.
(i) Section 5(p) of the Disclosure Schedule lists the contracts
and other agreements to which the Company is a party.
(ii) The Shareholders have delivered to the Buyer, as an exhibit
to Section 5(p) of the Disclosure Schedule, a correct and complete copy
of each written agreement listed in Section 5(p) of the Disclosure
Schedule (as amended to date) and a written summary setting forth the
terms and conditions of each oral agreement referred to in Section 5(p)
of the Disclosure Schedule. With respect to each such agreement: (A) the
agreement is legal, valid, binding, enforceable, and in full force and
effect; (B) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby; (C) no party is
in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or
17
permit termination, modification, or acceleration, under the agreement;
and (D) no party has repudiated any provision of the agreement. There are
no other contracts or agreements to which the Company is a party which
have been terminated but pursuant to which there are continuing
obligations of the Company or of any other party thereto.
(iii) The license granted by the Company to Organon Teknika, B.V.
on May 1, 1993, as referred to in the License, Research and Consultancy
Agreement relating to HPV Consensus Primers, dated as of November 10,
1995, among the Company, the Foundation, Meijer, Walboomers and Abbott
Laboratories (the "Abbott License Agreement"), has been terminated as of
March 26, 1996.
(q) Notes and Accounts Receivable. The Company has no notes and accounts
receivable other than as set forth in the Most Recent Financial Statements.
(r) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company.
(s) Litigation. The Company and the Shareholders are not subject to any
outstanding injunction, judgment, order, decree, ruling, or charge and are not a
party to, or threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or quasi-judicial or
administrative agency of any local, national or foreign jurisdiction or before
any arbitrator.
(t) Guaranties. The Company is not a guarantor or otherwise is liable for
any Liability or obligation (including indebtedness) of any other Person.
(u) Environmental, Health, and Safety Matters. The Company and its
predecessors and Affiliates have complied and are in compliance with all
Environmental, Health, and Safety Requirements.
(v) Certain Business Relationships with the Company. Except as set forth
in Section 5(v) of the Disclosure Schedule, neither the Shareholders nor any
Affiliate of any of the Shareholders owns, directly or indirectly, any interest
in, or is a managing director, officer or employee of, or consultant to, any
corporation, partnership, firm, association or business organization, entity or
enterprise which is a competitor, supplier or customer of the Company. Except as
set forth in Section 5(v) of the Disclosure Schedule, neither the Shareholders
nor any Affiliate of any of the Shareholders owns, directly or
18
indirectly, in whole or in part, any property, asset or right, tangible or
intangible, relating to or affecting the Company or is directly or indirectly,
engaged in any transaction with the Company, other than in its capacity as a
managing director, officer or employee.
6. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use his or its reasonable best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Section 8 below).
(b) Notices and Consents. The Shareholders will cause the Company to give
any notices to third parties, and will cause the Company to use its best efforts
to obtain any third party consents, that the Buyer may request in connection
with the matters referred to in Section 5(c) above. Each of the Shareholders
will (and the Shareholders will cause the Company to) give any notices to, make
any filings with, and use its best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in Section 4(a)(ii) and Section 4(a)(iii) above.
(c) Operation of Business. The Shareholders will not cause or permit the
Company to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing, the Shareholders will not cause or permit the
Company to (i) declare, set aside, or pay any dividend or make any distribution
with respect to its capital stock or redeem, purchase, or otherwise acquire any
of its capital stock, or (ii) otherwise engage in any practice, take any action,
or enter into any transaction of the sort described in Section 5(h) above.
(d) Preservation of Business. The Shareholders will cause the Company to
keep its business and properties substantially intact.
(e) Notice of Developments. The Shareholders will give prompt written
notice to the Buyer of any material adverse development causing a breach of any
of the representations and warranties in Section 4 and Section 5 above.
(f) Exclusivity. The Shareholders will not (and the Shareholders will not
cause or permit the Company to) (i) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of any capital
19
stock or other voting securities, or any substantial portion of the assets, of
the Company (including any acquisition structured as a merger, consolidation, or
share exchange) or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing. Each Shareholder will not vote his or its respective
Company Shares in favor of any such acquisition structured as a merger,
consolidation, or share exchange. The Shareholders will notify the Buyer
immediately if any Person makes any proposal, offer, inquiry, or contact with
respect to any of the foregoing.
7. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party may request, all at
the sole cost and expense of the requesting Party (unless the requesting Party
is entitled to indemnification therefor under Section 9 below).
(b) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement, shall be paid by the
Shareholders when due, and the Shareholders will, at their own expense, file all
necessary Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and, if
required by applicable law, the Buyer will, and will cause its Affiliates to,
join in the execution of any such Tax Returns and other documentation.
8. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 4(a)
and Section 5 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) each Shareholder shall have performed and complied with all
of its respective covenants hereunder in all material respects through
the Closing;
20
(iii) the Company shall have obtained the Notarial Deed of
Transfer required for the transfer of the Company Shares;
(iv) there shall have been no material adverse change or
development involving a prospective material change in or affecting the
financial position, intellectual property or business of the Company
since December 31, 1997;
(v) the Company shall have procured all of the third party
consents specified in Section 6(b) above.
(vi) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation,
(C) affect adversely the right of the Buyer to own the Company Shares and
to control the Company, or (D) affect adversely the right of the Company
to own its assets and to operate its businesses (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(vii) the Shareholders shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above in
Section 8(a)(i)-(vi) is satisfied in all respects;
(viii) the Buyer and each of Messrs. Keijser, Meijer and
Walboomers shall have entered into a consulting agreement substantially
in the form attached hereto as Exhibit B-1 (the "Consulting Agreement")
and the same shall be in full force and effect;
(ix) The Buyer and each of Messrs. Keijser, Meijer and Walboomers
shall have entered into a confidentiality and non-competition agreement
(the "Confidentiality and Non- Competition Agreement") substantially in
the form attached hereto as Exhibit B-2 and the same shall be in full
force and effect;
(x) all actions to be taken by the Shareholders in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents (including, but
not limited to, all consents, waivers and estoppels) required to effect
the transactions contemplated hereby will be reasonably satisfactory in
form and substance to the Buyer.
21
(b) Conditions to Obligation of the Shareholders. The obligation of the
Shareholders to consummate the transactions to be performed by them in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in Section 4(b)
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation
(and no such injunction, judgment, order, decree, ruling, or charge shall
be in effect);
(iv) the Buyer shall have delivered to the Shareholders a
certificate to the effect that each of the conditions specified above in
Section 8(b)(i)-(iii) is satisfied in all respects;
(v) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Shareholders.
9. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Shareholders contained in Section 5 above,
other than the representations in Section 5(k), shall survive the Closing
hereunder (even if the Buyer knew or had reason to know of any misrepresentation
or breach of warranty at the time of Closing) and continue in full force and
effect for a period of eighteen months thereafter. The representations and
warranties of the Shareholders contained in Section 5(k) shall survive the
Closing (even if the Buyer knew or had reason to know of any misrepresentation
or breach of warranty at the time of Closing) and continue in full force and
effect until the expiration of any applicable statutes of limitations. The
representations and warranties of the Buyer contained in Section 4(b)(iv) shall
survive the
22
Closing (even if the Shareholders knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect for a period of eighteen months thereafter. The
representations and warranties of the Parties contained in Section 4(a)(i),
Section 4(a)(ii), Section 4(a)(iii), Section 4(b)(i), Section 4(b)(ii) and 4(b)
(iii) of this Agreement shall survive the Closing (even if the damaged Party
knew or had reason to know of any misrepresentation or breach of warranty
at the time of Closing) and continue in full force and effect forever
thereafter (subject to any applicable statutes of limitations).
(b) Indemnification Provisions for Benefit of the Buyer. In the event any
Shareholder breaches any of his or its representations, warranties, and
covenants contained herein and, if there is an applicable survival period
pursuant to Section 9(a) above, provided that the Buyer makes a written claim
for indemnification against such Shareholder pursuant to Section 12(g) below
within such survival period and provided that such claim, together with all
other claims for indemnification pursuant hereto, is for damages aggregating a
dollar amount in excess of $20,000, then such Shareholder agrees to indemnify
the Buyer from and against the entirety of any Adverse Consequences the Buyer
may suffer through and after the date of the claim for indemnification resulting
from, arising out of, relating to, in the nature of, or caused by such breach;
provided, however, that the maximum liability for indemnification hereunder,
which liability shall be joint and several as to the Foundation and several but
not joint as to each of Keijser, Meijer and Walboomers, shall be limited, with
respect to the Foundation, to a dollar amount equal to the sum of the Purchase
Price plus any amount then due to the Shareholders under Section 3 hereof and
under the Consulting Agreements, and shall be limited, with respect to each of
Keijser, Meijer and Walboomers, to the sum of such Shareholder's pro rata
portion of the Purchase Price plus the pro rata portion of any amount due under
Section 3 hereof and the amount due under such Shareholder's respective
Consulting Agreement.
(c) Indemnification Provisions for Benefit of the Shareholders. In the
event the Buyer breaches any of its representations, warranties, and covenants
contained herein, and, if there is an applicable survival period pursuant to
Section 9(a) above, provided that a Shareholder makes a written claim for
indemnification against the Buyer pursuant to Section 12(g) below within such
survival period and provided that such claim, together with all other claims for
indemnification pursuant hereto, is for damages aggregating a dollar amount in
excess of $20,000, then the Buyer agrees to indemnify such Shareholder from and
against the entirety of any Adverse Consequences such Shareholder may suffer
through and after the date of the claim for indemnification resulting from,
arising out of, relating to, in the nature of, or caused by the breach;
provided, however, that
23
the maximum liability for indemnification hereunder shall be limited to a dollar
amount equal to the Purchase Price.
(d) Determination of Adverse Consequences. The Parties shall take into
account the time cost of money (using an interest rate of 8% per annum as the
discount rate) in determining Adverse Consequences for purposes of this
Section 9.
(e) Recoupment Under Other Agreements. The Buyer shall have the option of
recouping all or any part of any Adverse Consequences it may suffer (in addition
to seeking any indemnification to which it is entitled under this Section 9) by
notifying the Representative that the Buyer is reducing the pro rata portion of
any amount then due under Section 3 hereof or any amount then due to the
applicable Shareholder(s) under the Consulting Agreement(s).
(f) Other Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy (including without limitation any such remedy
arising under Environmental, Health, and Safety Requirements) any Party may have
with respect to the Company or the transactions contemplated by this Agreement.
The Shareholders jointly and severally hereby agree that they will not make any
claim for indemnification against the Company by reason of the fact that, prior
to the Closing, he or it was a managing director, officer, employee, or agent of
such entity or was serving at the request of such entity as a partner, trustee,
managing director, officer, employee, or agent of another entity (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim is pursuant to
any statute, charter document, bylaw, agreement, or otherwise) with respect to
any action, suit, proceeding, complaint, claim, or demand brought by the Buyer
against such Shareholder (whether such action, suit, proceeding, complaint,
claim, or demand is pursuant to this Agreement, applicable law, or otherwise).
10. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Shareholders may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Representative if the Buyer is not reasonably satisfied
with the results of its continuing business, legal, environmental, and
accounting due diligence regarding the Company;
24
(iii) the Buyer may terminate this Agreement by giving written
notice to the Representative at any time prior to the Closing (A) in the
event any Shareholder has breached any material representation, warranty,
or covenant contained in this Agreement in any material respect or (B) if
the Closing shall not have occurred on or before July 15, 1998 by reason
of the failure of any condition precedent under Section 8(a) hereof
(unless the failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(iv) the Shareholders may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing (A) in the
event the Buyer has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect or (B) if
the Closing shall not have occurred on or before July 15, 1998, by reason
of the failure of any condition precedent under Section 8(b) hereof
(unless the failure results primarily from one or more of the
Shareholders breaching any representation, warranty, or covenant
contained in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 10(a) above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other Party
(except for any Liability of any Party then in breach).
11. Securities Laws Compliance Procedures.
(a) Knowledge Respecting the Buyer. Each Shareholder represents and
acknowledges that: (1) he or it is a sophisticated investor with knowledge and
experience in business and financial matters, knows, or has had the opportunity
to acquire, all information concerning the business, affairs, financial
condition and prospects of the Buyer which he or it deems relevant to make a
fully informed decision regarding the consummation of the transactions
contemplated hereby and is able to bear the economic risk and lack of liquidity
inherent in holding the Buyer Stock; and (2) he or it has been supplied with
copies of all Forms 8-K, 10-K, 10-Q, and all prospectuses and proxy statements
filed by the Company within the two-year period immediately preceding the date
of this Agreement (the "SEC Documents"), as well as any other information such
Shareholder deems relevant to make a fully informed decision regarding the
consummation of the transactions contemplated hereby. Without limiting the
foregoing, each Shareholder understands and acknowledges that neither the Buyer
nor anyone acting on its behalf has made any representations or warranties other
than those contained herein and in the SEC Documents respecting the Buyer or the
future conduct of the Buyer's business or of the Company's business, and no
Shareholder has relied upon any representations or warranties other than
25
those contained herein in the belief that they were made on behalf of the Buyer.
(b) Status of Shares to be Issued. Each Shareholder agrees, acknowledges
and confirms that he or it has been advised and understands as follows:
(i) Shareholder is acquiring the shares of the Buyer Stock to be
issued to him or it and all the Option Shares for his or its own account and
without a view to any distribution or resale thereof, other than a distribution
or resale which, in the opinion of counsel for such Shareholder (which opinion
shall be satisfactory in form and substance to the Buyer and its counsel), may
be made without violating the registration provisions of the Securities Act,
Regulation S under the Securities Act or any applicable blue sky laws.
Shareholder acknowledges that the shares of the Buyer Stock and the Option
Shares are "restricted securities" within the meaning of Rule 144 under the
Securities Act and have not been registered under the Securities Act or any
state securities laws and therefore must be held indefinitely unless they are
subsequently sold in accordance with the provisions of Regulation S and Rule
144, registered under the Securities Act or an exemption from such registration
is available. In addition, Shareholder agrees not to engage in hedging
transactions with respect to the Buyer Stock or the Option Shares prior to the
expiration of the distribution compliance period unless in compliance with the
Securities Act.
(ii) There shall be endorsed on the certificates evidencing the
shares of the Buyer Stock delivered at Closing and on the certificates
evidencing the Option Shares a legend substantially similar to the following:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED OR UNDER ANY STATE SECURITIES
LAWS, AND SUCH SHARES MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNLESS SUCH
OFFER, SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND LAWS OR ANY EXEMPTION WHICH IS AVAILABLE
WITH RESPECT THERETO (SUCH EXEMPTION TO BE SUPPORTED BY AN OPINION OF
COUNSEL TO THE SHAREHOLDERS, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE BUYER AND ITS COUNSEL); HEDGING TRANSACTIONS
INVOLVING SUCH SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH SUCH
ACT."
(iii) The above restrictions on the transfer of the shares of the
Buyer Stock and the Option Shares will also apply to any and all shares of
capital stock or other securities issued or otherwise acquired with respect to
such shares, including, without limitation, shares and securities issued or
acquired as a result of any stock dividend, stock split or exchange or any
26
distribution of shares or securities pursuant to any corporate reorganization,
reclassification or similar event.
(iv) the Buyer and its transfer agent may refuse to effect a
transfer of any of the shares of the Buyer Stock and the Option Shares by the
Shareholders or any of their successors, personal representatives or assigns
otherwise than as contemplated hereby.
(c) Holding Period. In addition to the restrictions set forth in
Section 11(b)(i) above, the Shareholders hereby agree that they will not sell,
convey, assign or otherwise transfer, in the aggregate, at least 30% of the
Buyer Stock for at least eighteen months following the Closing Date.
12. Miscellaneous.
(a) Press Releases and Public Announcements. The Parties shall not issue
any press release or make any public announcement relating to the subject matter
of this Agreement without the prior written approval of the other Parties.
(b) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the Buyer and the Shareholders; provided, however, that the Buyer
may; (i) assign any or all of its rights and interests hereunder to one or more
of its Affiliates; (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases the Buyer nonetheless shall
remain responsible for the performance of all of its obligations hereunder); and
(iii) assign any or all of its rights and interests hereunder to any purchaser
of the Buyer or of substantially all of the Buyer's assets.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
27
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Shareholders: Copy to:
----------------------- --------
The Stichting ResearchFonds Dorsey & Whitney LLP
Pathologie 250 Park Avenue
p/a Department of Pathology New York, NY 10177
De Boelelaan 1117
Post Box 7057 Attn: J. Eric Maki, Esq.
1007 MB
Amsterdam, The Netherlands
Attn: Ewald C.R.M. Keijser Copy to:
--------
If to the Buyer: Ballard Spahr Andrews
---------------- & Ingersoll, LLP
1735 Market Street
Digene Corporation 51st Floor
9000 Virginia Manor Road Philadelphia, PA 19103-7599
Suite 207
Beltsville, MD 20705 Attn: Morris Cheston, Jr., Esq.
Attn: Evan Jones
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Maryland without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Maryland or any other jurisdiction) or the fact that the Closing occurs in
Pennsylvania
28
or any other fact that might cause the application of the laws of any
jurisdiction other than the State of Maryland.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Shareholders. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear his or its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. The Shareholders agree that
the Company has not borne and will not bear any of the Shareholders' costs and
expenses (including any of their legal fees and expenses) in connection with
this Agreement or any of the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
29
(m) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(n) Specific Performance. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof.
*****
30
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
DIGENE CORPORATION
By:/s/ Evan Jones
-------------------------------
Evan Jones, President &
Chief Executive Officer
STICHTING RESEARCHFONDS PATHOLOGIE
By:/s/ Prof. C.J.L.M. Meijer /s/ Dr. H.B. Jansen
---------------------------------------------------
Name: Professor C.J.L.M. Meijer
Title: Chairman
/s/ Ewald C.R.M. Keijser
----------------------------------
Ewald C.R.M. Keijser
/s/ Christophorus J.L.M. Meijer
----------------------------------
Christophorus J.L.M. Meijer
/s/ Jan M.M. Walboomers
----------------------------------
Jan M.M. Walboomers
31
SCHEDULE 2(a)
[Download Table]
SHAREHOLDER NO. OF SHARES OF COMMON STOCK
----------- -----------------------------
STICHTING RESEARCHFONDS PATHOLOGIE 100,037
EWALD C.R.M. KEIJSER 45,471
CHRISTOPHORUS J.L.M. MEIJER 18,188
JAN M.M. WALBOOMERS 18,188
32
OMITTED SCHEDULES, EXHIBITS AND ANNEX
Copies of the following documents have been omitted from this filing but
will be furnished supplementally to the Securities and Exchange Commission upon
request.
Disclosure Schedules --
Schedule 4(a) - Name of Shareholders and Ownership of Company Stock
Schedule 5(a) - Managing Directors and Officers of the Company
Schedule 5(c) - Consents, Notices, Filings, Authorizations and Government
Approvals Required to Consummate the Transaction
Schedule 5(e) - Company Assets Subject to Liens
Schedule 5(h) - Significant Events Subsequent to December 31, 1997 in the
Business, Financial Condition, Operations, Results of Operations or
Future Prospects of the Company
Schedule 5(k) - List of Tax Returns Filed for Taxable Periods Ended On or
After December 31, 1995
Schedule 5(m)(iii) - Intellectual Property Owned by the Company; Existing
or Pending Registrations
Schedule 5(m)(iv) - Intellectual Property Owned by a Third Party Licensed
for Use by the Company
Schedule 5(p) - Contracts to which the Company is a Party
Schedule 5(v) - Shareholders or Affiliate Ownership of any Interest In,
or Service as a Managing Director, Officer, Employee or Consultant of any
Corporation, Partnership or Firm that is a Competitor of the Company
Exhibit A -- Historical Financial Statements
Exhibit B-1 -- Confidentiality and Non-Competition Agreement -
Ewald C.R.M. Keijser
Exhibit B-2 -- Confidentiality and Non-Competition Agreement -
Christophorus J.L.M. Meijer
Exhibit B-3 -- Confidentiality and Non-Competition Agreement -
Jan M.M. Walboomers
Exhibit C-1 -- Consulting Agreement - Ewald C.R.M. Keijser
Exhibit C-2 -- Consulting Agreement - Christophorus J.L.M. Meijer
Exhibit C-3 -- Consulting Agreement - Jan M.M. Walboomers
Annex 1 -- Notarial Deed of Transfer
33
Dates Referenced Herein and Documents Incorporated by Reference
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