Exhibit 10.46


 


SECURITIES PURCHASE AGREEMENT


 


BY AND BETWEEN


 


AVERION INTERNATIONAL CORP.,


 


AND


 


CEREP S.A.


 


DATED AS OF OCTOBER 31, 2007


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  ARTICLE I THE PURCHASE AND SALE

  	
  1

  
	
  1.1.

  	
  The Purchase
  and Sale

  	
  1

  
	
  1.2.

  	
  Purchase Price
  Adjustment

  	
  2

  
	
  1.3.

  	
  Closing;
  Effective Time

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE II REPRESENTATIONS AND WARRANTIES
  OF THE SELLER

  	
  4

  
	
  2.1.

  	
  Organization
  and Qualification

  	
  4

  
	
  2.2.

  	
  Authority to
  Execute and Perform Agreement

  	
  5

  
	
  2.3.

  	
  Binding
  Effect

  	
  5

  
	
  2.4.

  	
  Capitalization

  	
  5

  
	
  2.5.

  	
  Financial
  Statements

  	
  6

  
	
  2.6.

  	
  Absence of
  Certain Developments

  	
  7

  
	
  2.7.

  	
  Accounts
  Receivable and Back Log

  	
  7

  
	
  2.8.

  	
  Legal
  Proceedings

  	
  8

  
	
  2.9.

  	
  Assets;
  Title to Properties; Absence of Liens

  	
  8

  
	
  2.10.

  	
  Compliance
  with Laws

  	
  9

  
	
  2.11.

  	
  Intellectual
  Property

  	
  10

  
	
  2.12.

  	
  Non-Contravention

  	
  10

  
	
  2.13.

  	
  Consents and
  Approvals

  	
  11

  
	
  2.14.

  	
  Employee
  Benefit Plans

  	
  11

  
	
  2.15.

  	
  Company
  Contracts

  	
  12

  
	
  2.16.

  	
  Taxes

  	
  13

  
	
  2.17.

  	
  Environmental
  Matters

  	
  14

  
	
  2.18.

  	
  Real
  Property

  	
  15

  
	
  2.19.

  	
  Broker’s
  Fees

  	
  15

  
	
  2.20.

  	
  Insurance

  	
  15

  
	
  2.21.

  	
  Labor and
  Employment Matters

  	
  16

  
	
  2.22.

  	
  Bank
  Accounts

  	
  16

  
	
  2.23.

  	
  Interested
  Party Transactions

  	
  17

  
	
  2.24.

  	
  No
  Alternative Transaction

  	
  17

  
	
  2.25.

  	
  Minute Book
  Contents

  	
  17

  
	
  2.26.

  	
  Full
  Disclosure

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES
  OF THE SELLER

  	
  18

  
	
  3.1.

  	
  Marketable
  Title

  	
  18

  
	
  3.2.

  	
  No Liens

  	
  18

  
	
  3.3.

  	
  No
  Preemptive Rights

  	
  18

  
	
  3.4.

  	
  Entire
  Ownership Interest

  	
  18

  
	
  3.5.

  	
  No Conflicts

  	
  18

  
	
  3.6.

  	
  No Other
  Agreements with Respect to the Shares

  	
  18

  
	
  3.7.

  	
  Foreign
  Seller

  	
  18

  



 


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  ARTICLE IV REPRESENTATIONS AND WARRANTIES
  OF PURCHASER

  	
  18

  
	
  4.1.

  	
  Organization
  and Qualification; Subsidiaries

  	
  19

  
	
  4.2.

  	
  Authority to
  Execute and Perform Agreement

  	
  19

  
	
  4.3.

  	
  Binding
  Effect

  	
  19

  
	
  4.4.

  	
  Broker’s
  Fees

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE V ADDITIONAL AGREEMENTS OF THE
  PARTIES

  	
  19

  
	
  5.1.

  	
  Filing of
  Tax Returns; Payment of Taxes

  	
  19

  
	
  5.2.

  	
  Notification
  of Certain Matters

  	
  20

  
	
  5.3.

  	
  Exclusivity.
  Prior to the Closing Date:

  	
  20

  
	
  5.6.

  	
  Confidentiality

  	
  21

  
	
  5.7.

  	
  Reasonable
  Efforts

  	
  22

  
	
  5.8.

  	
  Further
  Assurances

  	
  22

  
	
  5.9.

  	
  Public
  Disclosure

  	
  22

  
	
  5.10.

  	
  Intercompany
  Contracts and Assets

  	
  22

  
	
  5.11.

  	
  Letter of
  Credit

  	
  23

  
	
  5.12.

  	
  Election of
  New Board and Discharge of Former Board

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI CONDITIONS TO CLOSING

  	
  23

  
	
  6.1.

  	
  Conditions
  to Each Party’s Obligations to Consummate the Transaction

  	
  23

  
	
  6.2.

  	
  Conditions
  to Obligations of Purchaser to Consummate the Transaction

  	
  23

  
	
  6.3.

  	
  Conditions
  to Obligations of the Seller to Consummate the Transaction

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII INDEMNIFICATION

  	
  25

  
	
  7.1.

  	
  Survival of
  Representations and Warranties

  	
  25

  
	
  7.2.

  	
  Indemnification

  	
  26

  
	
  7.3.

  	
  Claims for
  Indemnification

  	
  26

  
	
  7.4.

  	
  Challenge of
  Third Party Claims

  	
  27

  
	
  7.5.

  	
  No
  Contribution

  	
  27

  
	
  7.6.

  	
  Limitation
  on Indemnification; Right to Offset

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TERMINATION

  	
  28

  
	
  8.1.

  	
  Termination

  	
  28

  
	
  8.2.

  	
  Effect of
  Termination

  	
  28

  
	
  8.3.

  	
  Expenses

  	
  29

  
	
  8.4.

  	
  No
  Rescission

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX MISCELLANEOUS

  	
  29

  
	
  9.1.

  	
  Certain
  Definitions; Rules of Construction

  	
  29

  
	
  9.2.

  	
  Arbitration

  	
  34

  
	
  9.3.

  	
  Waivers and
  Amendments

  	
  34

  
	
  9.4.

  	
  Governing
  Law

  	
  34

  
	
  9.5.

  	
  Notices

  	
  34

  
	
  9.6.

  	
  Section
  Headings

  	
  35

  
	
  9.7.

  	
  Counterparts

  	
  35

  
	
  9.8.

  	
  Assignments

  	
  35

  
	
  9.9.

  	
  Entire
  Agreement; Enforceability

  	
  35

  
	
  9.10.

  	
  Equitable
  Relief

  	
  36

  



 


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  9.11.

  	
  Severability

  	
  36

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A PROMISSORY NOTE

  	
  1

  
	
   

  	
   

  
	
  EXHIBIT B FORM NET WORKING CAPITAL
  CERTIFICATE

  	
   

  



 


iii

















 


SECURITIES PURCHASE AGREEMENT


 


THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of October 31, 2007,
is entered into by and between Averion International Corp., a Delaware
corporation (the “Purchaser”), on the one hand, and Cerep S.A., a French
corporation (the “Seller”) and on the other hand.


 


W I T N E S S E T H:


 


WHEREAS,
the capital stock of Hesperion Ltd., a Swiss corporation (the “Company”),
amounts to CHF 140,000.00 (divided into 140,000 registered shares with a par
value of CHF 1.00 each);


 


WHEREAS,
Seller owns all of the outstanding capital stock of the Company, and the
Company owns all of the outstanding capital stock of each of its Subsidiaries
(each a “Company Subsidiary”);


 


WHEREAS,
Purchaser desires to purchase and Seller desires to sell all of the outstanding
capital stock of the Company (collectively, the “Shares”), in accordance with
the terms of this Agreement (the “Transaction”);


 


WHEREAS,
the parties hereto desire to make certain representations, warranties,
covenants and agreements in connection with the Transaction and to prescribe
various conditions to the completion of the Transaction, all as more fully set
forth herein; and


 


WHEREAS,
capitalized terms not otherwise defined in the Section referencing such term
shall have the meanings ascribed to such terms in Section 9.1.


 


NOW
THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:


 


ARTICLE I


 


THE PURCHASE AND SALE


 


1.1.                              The
Purchase and Sale.  Subject to the
terms and conditions hereof, including, without limitation, Section 1.2 and
Article VII below, at the Closing (as hereinafter defined) Seller hereby agrees
to sell and transfer to the Purchaser, and the Purchaser hereby agrees to
purchase and acquire from Seller, the Shares for an aggregate purchase price of
Twenty Five Million Euros (€25,000,000) (the “Purchase Price”) payable as
follows:


 


(a)                                  Twenty Million Euros (€20,000,000) to be paid
in cash at the Closing as follows: a net sum of €20,000,000 shall be received
by Seller on its bank account at BNP Paribas – Sud Atlantique in Poitiers IBAN
n° FR 76 3000 4003 5700 0205 8077 067; and


 


(b)                                 Five Million Euros (€5,000,000) to be paid
within thirty (30) days after the Closing Date as follows:  (i) Purchaser shall issue a promissory note
in the form 


 

















 


attached hereto as Exhibit A
(the “Note”) to Seller in the principal amount of Five Million Euros
(€5,000,000) that is secured by an irrevocable and on demand stand-by letter of
credit (a “LOC”) issued by a reputable international bank selected by the
Purchaser and reasonably acceptable to the Seller; or (ii) Purchaser shall (x)
issue a Note to Seller in the principal amount of Two Million Five Hundred
Thousand Euros (€2,500,000), and (y) make a cash payment to Seller in the
amount of Two Million Five Hundred Thousand Euros (€2,500,000).


 


1.2.                              Purchase Price Adjustment.


 


(a)                                  The Purchase Price assumes that the Company
will transfer negative Net Working Capital at the Closing Date of no more than
One Million One Hundred Thousand Swiss Francs (CHF 1,100,000) (the “Estimated
Net Working Capital”). The Purchase Price shall be adjusted on a dollar-for-dollar
basis to reflect any increase or decrease in the Estimated Net Working Capital
above or below the Threshold Amount (as defined below) as of the Closing Date.
For purposes of this Agreement, the term “Net Working Capital” shall be
determined by subtracting current liabilities of the Company on a consolidated
basis, including trade accounts payable, prepayments (unearned or deferred
revenue and customer advances), accrued expenses, short-term liabilities and
charges, and other payables, from current assets of the Company on a
consolidated basis, including cash and cash equivalents, gross trade accounts
receivable net of provision for bad debts, work in progress (or unbilled
accounts receivable), and other receivables, all as defined by the
International Financial Reporting Standards (“IFRS”) adopted by the
International Accounting Standards Board (IASB).


 


(b)                                 Not later than ten (10) Business Days after
to the Closing Date, the Seller shall prepare and deliver to the Purchaser a
certificate (the “Seller Closing Statement”), in the form attached hereto as
Exhibit B-1, certifying the Seller’s good faith estimate of the Net Working
Capital as of the Closing Date (the “Closing Net Working Capital”), and the
resulting final Purchase Price determined with respect thereto (which shall be
calculated with reference to the adjustment provisions set forth in subsection
1.2(e) below), together with copies of such working papers (whether generated
by the Seller or its representatives or accountants) related to those calculations
as may be reasonably necessary to permit the Purchaser to review in detail the
manner in which such Seller Closing Statement was prepared and the final
Purchase Price was calculated.


 


(c)                                  Not later than fifteen (15) days following
the Closing Date, the Purchaser shall prepare and deliver to the Seller the
Purchaser’s closing statement (the “Purchaser Closing Statement”) certifying
the Purchaser’s good faith calculations of the Closing Net Working Capital and
the resulting final Purchase Price determined with respect thereto (which shall
be calculated with reference to the adjustment provisions set forth in
subsection 1.2(e) below), together with copies of such working papers (whether
generated by the Purchaser or its representatives or accountants) related to
those calculations as may be reasonably necessary to permit the Seller to
review in detail the manner in which the Purchaser Closing Statement was
prepared and the final Purchase Price was calculated.


 


(d)                                 The Seller shall then have ten (10) days
following its receipt of the Purchaser Closing Statement to notify the
Purchaser in writing of any objections as well as any proposed adjustments to
the Purchaser Closing Statement (the “Seller’s Adjustment Notice”) it may
request. The Seller shall be deemed to have agreed with all items and amounts
contained 


 


2

















 


in the Purchaser Closing
Statement that are not expressly objected to in the Seller’s Adjustment Notice,
and if the Seller’s Adjustment Notice is not delivered to Purchaser within such
ten (10) day period, then the Seller shall be deemed to have agreed with the
entire Purchaser Closing Statement. The Purchaser will promptly modify the
Purchaser Closing Statement with such of the items contained within the
Seller’s Adjustment Notice as the Purchaser accepts (or as they otherwise are
determined to be correct by the procedures set forth in this Section). For
avoidance of doubt, the failure of the Seller to deliver the Seller’s
Adjustment Notice within such ten (10) day period shall constitute approval by
the Seller of the Purchaser Closing Statement and the amounts stated therein
shall be conclusive and binding upon all of the parties. If at any time the
Purchaser and Seller are in agreement as to the final Purchase Price and (i) a
Closing Surplus (as hereafter defined) exists, then the Purchaser shall pay to
the Seller the Closing Surplus as set forth in Section 1.2(e), or (ii) a
Closing Deficit (as hereafter defined) exists, then the Seller shall pay to the
Purchaser the Closing Deficit as set forth in Section 1.2(e). The Purchaser and
the Seller shall use their commercially reasonable efforts to resolve any
differences in writing with respect to the Seller’s Adjustments, if any. In
furtherance thereof, following delivery of any Seller’s Adjustment Notice, the
parties shall be permitted to review the working papers and books and records
relating to the preparation of the other party’s certificate as may be
reasonably necessary to permit it to review in detail the manner in which such
certificate was prepared. If the Purchaser and the Seller are unable to reach
agreement within ten (10) days following the delivery of the Seller’s
Adjustment Notice to the Purchaser, the Purchaser and the Seller shall promptly
submit the Seller Closing Statement, the Purchaser Closing Statement and the
Seller’s Adjustment Notice to a mutually agreed upon independent public
accounting firm (the “Accountants”) for final determination of such disputed
amounts. The Parties hereby agree that such Accountant shall be Mr Jürg Zürcher
Ernst & Young Audit  located at
Aeshengraben n°9 – 4002 Basel – Switzerland. In making such calculation, such
Accountants shall consider only those items or amounts as to which the parties
have disagreed; except to the extent consideration of other matters or
supporting records is necessary to determine the items or amounts as to which
the parties have disagreed. In each case, the Accountants shall calculate the
disputed items of Closing Net Working Capital, final Purchase Price, and
Closing Deficit or Closing Surplus in accordance with the terms of this
Agreement. The parties will cooperate with the Accountants during the term of
their engagement and provide them access to such supporting documents and books
and records as they may request. In resolving any matters in dispute, the
Accountants may not assign a value to any item in dispute greater than the
greatest value for such item assigned by the Purchaser or the Seller or less
than the smallest value for such item assigned by the Purchaser or the Seller.
The Accountants shall deliver to the Purchaser and Seller a report setting
forth such calculations, as promptly as practicable, but no later than thirty
(30) days after receipt by the Accountants of the disputed items. In the
absence of fraud or manifest error, the parties agree that the Accountants’
determination shall constitute the final determination of the Closing Net
Working Capital, final Purchase Price, and Closing Deficit or Closing Surplus,
and shall be binding upon all of the parties hereto. Judgment may be entered
upon the determination of such Accountants in any court having jurisdiction
over the party against which such determination is to be enforced. The fees and
expenses of the Accountants incurred as a result of this Section shall be
borne equally by the parties.


 


(e)                                  The Closing Net Working Capital amount
determined in accordance with Section 1.2(d) (the “Actual Working
Capital”) shall be used to determine adjustments to the Purchase Price in order
to arrive at the final Purchase Price. If the Actual 


 


3

















 


Working Capital is greater
than the Estimated Net Working Capital by more than Two Hundred and Fifty
Thousand Swiss Francs (CHF 250,000) (the “Threshold Amount”), the Purchase
Price shall be increased by the amount by which the difference between the
Actual Working Capital and the Estimated Net Working Capital exceeds the
Threshold Amount (the “Closing Surplus”) and if the Actual Working Capital is
less than the Estimated Net Working Capital (i.e., a greater negative Net
Working Capital) by more than the Threshold Amount, the Purchase Price will be
decreased by the amount by which the difference between the Actual Working
Capital and the Estimated Net Working Capital exceeds the Threshold Amount (the
“Closing Deficit”). Any amount of Closing Surplus that is expressed in Swiss
Francs shall be converted into Euro (using the applicable exchange rate set
forth in the Wall Street Journal, Eastern Edition
on the day such payment is due) and paid in Euro. Any amount of Closing Deficit
that is expressed in Swiss Francs shall be converted into United States Dollars
(using the applicable exchange rate set forth in the Wall Street Journal, Eastern Edition on the day such payment
is due) and paid in United States Dollars. Payment of the Closing Deficit or
Closing Surplus shall be made by wire transfer of immediately available funds
not later than ten (10) days after the final determination of the Actual Working
Capital pursuant to this Section.


 


1.3.                              Closing; Effective Time.  Subject
to the satisfaction or waiver of all the conditions to Closing contained in
Article VI, the closing of the Transaction (the “Closing”), shall take place at
the offices of the Company on October 31, 2007 after the satisfaction or waiver
of the conditions to Closing contained in Article VI (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the fulfillment or waiver of those conditions), unless another date or place
is agreed to in writing by the parties hereto. The date on which the Closing
actually occurs is hereinafter referred to as the “Closing Date.”


 


ARTICLE II


 


REPRESENTATIONS AND WARRANTIES OF THE SELLER


 


The
Seller (on behalf of itself and, with respect to those representations and
warranties relating to the Company, on behalf of the Company in its capacity as
sole shareholder thereof), hereby represents and warrants to Purchaser as of
the date hereof and as of the Closing Date (subject to such exceptions or
qualifications as are disclosed in writing in the disclosure schedule certified
by the Seller and supplied by the Seller to Purchaser dated as of the date
hereof, which schedules shall provide an exception to or otherwise qualify only
those representations and warranties contained in the section of this
Agreement, references disclosure schedule to sections of this Agreement or to
other documents are inserted for convenience only and the disclosures made in
the disclosure schedule, whether made generally or by reference to a particular
section, are disclosures made for the purpose of all the representations and
warranties which are qualified accordingly. The Purchaser shall not be entitled
to claim that any fact or matter has not been disclosed to it by reason of the
relevant disclosure not being specifically related to any particular section or
paragraph of this Agreement (the “Disclosure Schedule”) and as updated pursuant
to Section 6.2(f)) as follows:


 


2.1.                              Organization
and Qualification.  The Company and
each Company Subsidiary is a corporation duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has requisite power and 


 


4

















 


authority and
governmental approvals to own, lease and operate its properties and to carry on
its business as currently conducted. The Company and each Company Subsidiary
has delivered to Purchaser true and correct copies of its Certificate of
Incorporation or other organizational and charter documents, as amended to
date. The Company and each Company Subsidiary is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the ownership
or leasing of its property or the conduct of its business requires such
qualification or licensing, except where the failure to be so qualified or
licensed or in good standing would not, individually or in the aggregate, have
a Company Material Adverse Effect. Except as set forth on Schedule 2.1, the
Company does not have any Company Subsidiaries.


 


2.2.                              Authority
to Execute and Perform Agreement.  The
Seller has the requisite power and all authority required to enter into,
execute and deliver this Agreement and the Transaction Documents to which it is
a party, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance by each of the Seller of this Agreement and the consummation by the
Seller of the Transaction have been duly authorized by all necessary corporate
action.


 


2.3.                              Binding
Effect.  This Agreement and the
related Transaction Documents has been, or will be, validly executed and
delivered by the Seller and, assuming the due execution and delivery hereof by
Purchaser, constitutes, or will constitute, a legal, valid and binding
obligation of the Seller, as the case may be, enforceable against the Seller in
accordance with its terms, except to the extent such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general applicability affecting or relating to enforcement of
creditors’ rights generally, (ii) general equitable principles (regardless of
whether such enforceability is considered in equity or at law), and (iii)
principles of public policy with respect to the enforcement of any
indemnification or contribution provisions contained in this Agreement and the
related Transaction Documents.


 


2.4.                              Capitalization.


 


(a)                                  As of the date hereof, 140,000 registered
shares of Company common stock are authorized, all of which are issued,
outstanding and owned by the Seller. All issued and outstanding common stock
has been duly authorized, validly issued and is fully paid and non-assessable,
and none of which is subject to preemptive rights or rights of first refusal
created by statute, the Company’s organizational or charter documents or any
agreement to which the Company or Seller is a party or by which either is
bound. The Company has no other authorized, issued or outstanding class of
capital stock. All outstanding securities issued by the Company and each
Company Subsidiary were issued in compliance with all applicable laws. Neither
the Company, nor the Seller, is bound by any contract or other agreement
pursuant to which it is or may become obligated to repurchase, redeem or
otherwise acquire any outstanding shares of Company capital stock. All Company
Subsidiaries are wholly-owned subsidiaries of the Company and no securities of
any Company Subsidiary are held by any Person other than the Company.


 


(b)                                 There are no existing options, rights,
subscriptions, warrants, unsatisfied preemptive rights, calls or commitments
relating to (i) the authorized and unissued capital stock of the Company or any
Company Subsidiary, or (ii) any securities or obligations 


 


5

















 


convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire
from the Company or any Company Subsidiary, any shares of capital stock of the
Company or any Company Subsidiary, as the case may be, and no such convertible
or exchangeable securities or obligations are outstanding. There are no
contracts, commitments or agreements relating to voting, purchase or sale of
any Company capital stock between the Company and the Seller or any third
party. Neither the Company nor any Company Subsidiary has any stock option
plan, stock purchase plan or other equity incentive plan.


 


2.5.                              Financial Statements.


 


(a)                                  The Company has delivered to Purchaser its
audited consolidated balance sheet as of December 31, 2006 and December 31,
2005 and the audited consolidated statements of income and cash flow for the
twelve month period ended on December 31, 2006 and the twelve month period
ended on December 31, 2005 (the “Annual Financial Statements”). The Annual
Financial Statements and any notes related thereto comply as to form in all
material respects with applicable accounting requirements and have been
prepared in accordance with  IFRS applied
on a consistent basis throughout the periods involved, except as may be
indicated in the notes thereto and are complete and accurate and fairly present
in all material respects the financial position of the Company and its
consolidated Company Subsidiaries as at the dates thereof and the results of
its operations and cash flows for the periods then ended. The Company maintains
a standard system of accounting and internal controls established and administered
in accordance with good business practices sufficient to permit the preparation
of consolidated financial statements in accordance with IFRS. All of the
Company’s accounts receivable and accounts payable as of the date of the Annual
Financial Statements are reflected on the balance sheet included with the
Annual Financial Statements. All underlying ledgers, journals, and books of
account, are accurate, complete, true and correct in accordance with IFRS.


 


(b)                                 The Company has delivered to Purchaser its unaudited
consolidated balance sheet of the Company for the nine (9) month period ended
as of September 30, 2007, and the unaudited consolidated statements of income
and cash flow for the period ended as of September 30, 2007 (collectively, the
“Interim Financial Statements” and together with the Annual Financial
Statements, the “Financial Statements”). The Interim Financial Statements and
any notes related thereto comply as to form in all material respects with
applicable accounting requirements and have been prepared in accordance with
IFRS applied on a consistent basis throughout the periods involved, except as
may be indicated in the notes thereto, or except as otherwise permitted for
interim financial statements, and are complete and accurate and fairly present
in all material respects (subject, in the case of the unaudited interim
financial statements, to the absence of footnotes and to normal, recurring
year-end adjustments none of which are or will be material in amount,
individually or in the aggregate) the financial position of the Company and its
consolidated Company Subsidiaries as at the dates thereof and the results of
its operations and cash flows for the periods then ended. All of the Company’s
accounts receivable and accounts payable as of the date of the Interim
Financial Statements are reflected on the balance sheet included with the
Interim Financial Statements. All underlying ledgers and journals are accurate,
complete, true and correct in all material respects in accordance with IFRS.


 


(c)                                  Neither the Company nor any Company
Subsidiary has any direct or indirect indebtedness, liability, claim, loss,
damage, deficiency or obligation or 


 


6

















 


responsibility, known, fixed
or unfixed, choate or inchoate, liquidated or unliquidated, secured or
unsecured, joint or severed, due or to become due, vested or unvested,
executory, determined, determinable, accrued, absolute, contingent or otherwise
(“Liabilities”), that were not fully and adequately reflected or reserved
against on the Financial Statements. Neither the Company nor any Company
Subsidiary has any Knowledge of any circumstance, condition, event or
arrangement that may hereafter give rise to any Liabilities which are
reasonably likely to have a Company Material Adverse Effect.


 


2.6.                              Absence
of Certain Developments.  Since the
date of the unaudited consolidated balance sheet of the Company, and the
unaudited consolidated statements of income and cash flow for the period ended
as of June 30, 2007,


 


(a)                                  The Company and each Company Subsidiary has
conducted its businesses in the ordinary course, consistent with past practice,
and there has been no: (i) change in the business, properties, assets,
prospects, operations or condition (financial or otherwise) of the Company or
any Company Subsidiary which has resulted or reasonably could be expected to
result in or which the Company or any Company Subsidiary has reason to believe
could reasonably be expected to result in a Company Material Adverse Effect, and
the Company has no Knowledge of any such change that is threatened, nor has
there been any damage, destruction or loss affecting the business, properties,
assets, prospects, operations or condition (financial or otherwise) of the
Company or any Company Subsidiary, which has resulted or reasonably could be
expected to result in or which the Company has reason to believe could
reasonably be expected to result in a Company Material Adverse Effect; (ii)
change in accounting methods or practices (including any change in depreciation
or amortization policies or rates) by the Company or any revaluation by the
Company of any Company asset; or (iii) increase in or modification or
acceleration of the compensation or benefits paid, payable or to become payable
by the Company or any Company Subsidiary to any of its officers, directors or
employees, pursuant to any Benefit Plan, stock option plan, stock option
agreement or any other agreement or arrangement.


 


(b)                                 Neither the Company nor any Company
Subsidiary has (i) declared, accrued, set aside or paid any dividend or made
any other distribution in respect of any shares of capital stock, (ii)
repurchased, redeemed or otherwise reacquired any shares of capital stock or
other securities,  (iii) sold, issued or
granted, or authorized the issuance of, (A) any capital stock or other
security, (B) any option, warrant or right to acquire any capital stock or any
other security, (C) any instrument convertible into or exchangeable for any
capital stock or other security, (iv) made any capital expenditure or purchase
commitment which exceeds CHF120,000 or, when added to all other capital
expenditures or purchase commitments made on behalf of the Company or any
Company Subsidiary since the date of the unaudited consolidated statements as
of June 30, 2007, exceeds CHF 300,000 in the aggregate, (v) made any material
Tax election, (vi) terminated, or received termination of any Company Material
Contract, or (vii) agreed to do any of the foregoing.


 


2.7.                              Accounts Receivable and Back Log.


 


(a)                                  All accounts receivable of the Company and
each Company Subsidiary that are reflected on the balance sheet included within
the Interim Financial Statements or on the accounting records of the Company or
any Company Subsidiary


 


7

















 


(collectively, the “Accounts
Receivable”) represent or will represent valid obligations arising from sales
actually made or services actually rendered in the ordinary course of business.
Unless paid prior to the Closing Date, the Accounts Receivable are or will be
as of the Closing Date current and collectible net of the respective reserves
shown on the balance sheet included within the Interim Financial Statements or
on the accounting records of the Company and each Company Subsidiary adequate
in accordance with IFRS. Subject to such reserves, each of the Accounts
Receivable has been or is expected to be (and neither the Seller nor the
Company have any reason to believe that any such Accounts Receivable will not
be) collected in full, without any set-off, within ninety (90) days after the
day on which it first becomes due and payable. Schedule 2.7(a) contains a
complete and accurate aged schedule of accounts receivable as of the date of
the balance sheet included within the Interim Financial Statements and as of
the date hereof, which schedule shall be updated as of the Closing Date in
accordance with Section 6.2(f) hereof.


 


(b)                                 Schedule 2.7(b) is a complete and accurate
schedule of all back log, as of the Closing Date, defined as follows: the value
(i.e., expected revenues) of Company and Company Subsidiary services, exclusive
of any pass through costs, of all executed and signed agreements with
customers, and where the value can be reasonably calculated, less the revenues
already recognized in prior periods for such agreements with such customers
(“Back Log”). All Back Log
represents or will represent valid obligations arising from sales actually made
or services actually rendered in the ordinary course of business. No event has
occurred or circumstance exists that (with or without notice or lapse of time)
has resulted in or may result in any stoppage, delay, termination or other
change with respect to any work performed or to be performed with respect to
any Back Log which will constitute a Company Material Adverse Effect. Neither
the Seller, the Company nor any Company Subsidiary has given nor has any of
them received from any other Person any notice regarding any actual, alleged,
possible or potential stoppage, delay, termination or other material change
with respect to any work performed or to be performed with respect to any
Material Contract included in the Back Log.


 


2.8.                              Legal
Proceedings.  Except as set forth on
Schedule 2.8, there are no civil, criminal judicial, governmental,
administrative or arbitral actions, suits or proceedings or investigations
(collectively, “Legal Proceedings”) pending or, to the Knowledge of the
Company, threatened against or involving the Company or any Company Subsidiary
or any of their respective properties, assets, officers or directors (in their
capacities as such) or that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with the transactions
contemplated by this Agreement. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, governmental or regulatory body or
arbitration tribunal against or involving the Company or any Company
Subsidiary.


 


2.9.                              Assets;
Title to Properties; Absence of Liens. 
The assets (whether tangible or intangible) of the Company and the
Company Subsidiaries constitute all the assets necessary to conduct the
Company’s business as currently conducted. The Company or the Company
Subsidiary, as the case may be, has good and marketable title to all of its
assets (whether tangible or intangible) and properties, whether real, personal
or fixed, that are used in the conduct of the Company’s business or that are
reflected in the most recent balance sheet included in the Financial
Statements, free and clear of all Liens, except (i) for Liens set forth on
Schedule 2.9, (ii) for Liens for Taxes not yet due and payable or which the
Company or a Company Subsidiary is contesting in good faith and for which
adequate reserves have been 


 


8

















 


established,
and (iii) for such properties and assets as may have been sold since the date
hereof in the ordinary course of business (collectively, “Permitted Liens”).
The tangible assets of the Company and each Company Subsidiary are in good
operating condition and repair, except for reasonable wear and tear that does
not materially affect the use or operation of such asset.


 


2.10.                        Compliance with Laws.


 


(a)                                  Each of the Company and each Company
Subsidiary is in compliance with all Applicable Laws, and to the Knowledge of
the Company is not in violation of, default under, or conflict with, any
applicable order, judgment, injunction, award, decree or writ of any
Governmental Body or court of competent jurisdiction (collectively, “Orders”).


 


(b)                                 No event has occurred or circumstance exists
that to the Knowledge of the Company 
(with or without notice or lapse of time) (A) may constitute or result
in a violation by the Company or any Company Subsidiary of, or a failure on the
part of the Company or any Company Subsidiary to comply with, any Applicable
Law, or (B) may give rise to any obligation on the part of the Company or any
Company Subsidiary to undertake, or to bear all or any portion of the cost of,
any remedial action of any nature.


 


(c)                                  Neither the Company nor any Company
Subsidiary has received, at any time since January 1, 2005, any notice or other
communication from any Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of, or failure to comply
with, any Applicable Law, or (B) any actual, alleged, possible, or potential
obligation on the part of the Company or any Company Subsidiary to undertake,
or to bear all or any portion of the cost of, any remedial action of any nature,
except to the extent such notice or other communication has not had, or is not
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect.


 


(d)                                 Schedule 2.10(d) contains a complete and
accurate list of each material consent, license, permit, grant or other
authorization from each Governmental Agency or Governmental Body that is
required or necessary for the operation of the Company’s or any Company
Subsidiary’s business as presently conducted (each, a “Company Authorization”),
except for such Company Authorizations the lack of which could not reasonably
be expected, individually or in the aggregate, to result in a Company Material
Adverse Effect. Each Company Authorization listed or required to be listed on
Schedule 2.10(d) is valid and in full force and effect.


 


(e)                                  The Company and each Company Subsidiary is,
in full compliance with all of the terms and requirements of each Company
Authorization.


 


(f)                                    To the Knowledge of the Company no event has
occurred or circumstance exists that may (with or without notice or lapse of
time) (A) constitute or result directly or indirectly in a violation of or a
failure to comply with any term or requirement of any Company Authorization or
(B) result directly or indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification to, any Company
Authorization. To the Knowledge of the Company, no specific authorization is
required to have a pharmacy in Russia as the Company Subsidiary does in Russia.


 


9

















 


(g)                                 Neither the Company nor any Company
Subsidiary has received, at any time since January 1, 2005, any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible, or potential violation of
or failure to comply with any term or requirement of any Company Authorization,
or (B) any actual, proposed, possible, or potential revocation, withdrawal,
suspension, cancellation, termination of, or modification to any Company
Authorization.


 


(h)                                 All applications required to have been filed
for the renewal of each Company Authorization have been duly filed on a timely
basis with the appropriate Governmental Body, and all other filings required to
have been made with respect to such Company Authorizations have been duly made
on a timely basis with the appropriate Governmental Body.


 


2.11.                        Intellectual Property.


 


(a)                                  Except as set forth on Schedule 2.11(a): (i)
To the Knowledge of the Company, none of the Intellectual Property owned or
controlled by the Company or any Company Subsidiary, or products or services
owned, used, sold or licensed by the Company or any Company Subsidiary
infringes upon or otherwise violates or conflicts with the use or registration
of any Intellectual Property rights of any third party, and to the Knowledge of
the Company, no other Person’s operations or activities infringe upon or
otherwise violates or conflicts with the use or registration of the Intellectual
Property owned or controlled by the Company or any Company Subsidiary; (ii)
neither the Company nor any Company Subsidiary has received notice of any Claim
contesting the right of the Company or any Company Subsidiary to use or sell,
license or make available to any Person any of the Company’s or any Company
Subsidiary’s products or services, and to the Knowledge of the Company, no such
Claim has been threatened against the Company or any Company Subsidiary; (iii)
the Company or a Company Subsidiary owns the Intellectual Property owned by the
Company or such Company Subsidiary, as the case may be, free and clear of all
Liens, except for Permitted Liens.


 


(b)                                 To the Knowledge of the Company, the Company
and each Company Subsidiary has at all times used reasonable efforts to protect
its proprietary information and trade secrets and to prevent the same from
being released into the public domain. To the Knowledge of the Company, no
person currently or formerly employed by the Company or any Company Subsidiary,
as the case may be, has  any claim, right
or interest with respect to any Intellectual Property owned by the Company or
any Company Subsidiary.


 


2.12.                        Non-Contravention.  The execution and delivery of this Agreement
and the Transaction Documents by each of the Seller and the Company, the
performance by each of the Seller and the Company of their respective
obligations hereunder and thereunder, and the consummation of the Transactions
by each of the Seller and the Company will not (with or without notice or lapse
of time) (i) violate or conflict with any provision of any charter or other
organizational document of the Seller, the Company or any Company Subsidiary,
in each case as amended as of the Closing Date or any resolutions adopted by
the board of directors or shareholders of either of the Seller or the Company;
(ii) except as set forth on Schedule 2.12 and subject to obtaining the
consents, approvals and authorizations or making such filings or giving such
notices referred to in Section 2.13 and on Schedule 2.13, the execution and
delivery of the Transaction Documents by the Seller and the Company and the
performance by each of them of 


 


10

















 


their
respective obligations set forth thereunder will not violate, conflict with or
result in the breach of any provision of, or result in a modification of or
otherwise entitle any party to terminate, accelerate, amend, cancel or
constitute (whether after the filing of notice or lease of time or both) a
default under or impair or alter the rights of the Company or any Company
Subsidiary or any third party under, any Material Contract to which the Company
or any Company Subsidiary is a party or by which or to which any of the
Company’s or any Company Subsidiary’s assets or properties may be bound or
subject (each, a “Company Material Contract”); (iii)subject to the exceptions
set forth in Section 2.13 and on Schedule 2.13, violate, conflict with or
contravene any Applicable Laws; (iv) violate or result in the revocation or
suspension of any Company Authorization or give any Governmental Body the right
to revoke or cancel any Company Authorization; or (v) result in the creation or
imposition of any Lien upon any of the Shares or the property or assets of the
Company or any Company Subsidiary.


 


2.13.                        Consents
and Approvals.  Except for (i) those
consents, approvals, authorizations, filings or notices set forth on Schedule
2.13; and (ii) applicable requirements of applicable securities laws in the
jurisdiction of the Seller and the Company, no consent, approval or
authorization of, filing with, or notice to, any Governmental Body or any third
party is required by the Company or any Company Subsidiary in connection with
the execution, delivery and performance by the Company of this Agreement, each
and every agreement contemplated hereby, and the consummation by the Company of
the Transactions.


 


2.14.                        Employee Benefit Plans.


 


(a)                                  Set forth on Schedule 2.14(a) is a true and
complete list of each Benefit Plan sponsored, maintained, or contributed to, or
required to be contributed to by the Company or any Company Subsidiary, in
which present or former employees of the Company or any Company Subsidiary
participate, or with respect to which the Company or any Company Subsidiary has
any liability, whether direct or indirect, actual or contingent, whether formal
or informal, and whether legally binding or not (each, a “Company Benefit
Plan”).


 


(b)                                 Except as disclosed on Schedule 2.14(b): (i)
each of the Company Benefit Plans has been maintained and is in compliance with
the terms of such Benefit Plans and all Applicable Laws; (ii) none of the
Company Benefit Plans is being investigated or has been notified of an
investigation by any Governmental Body or Governmental Agency; and (iii) no Governmental
Body or Governmental Agency is assessing or proposing to assess any penalties
or interest in connection with the operation of any of the Company Benefit
Plans.


 


(c)                                  Except as disclosed on Schedule 2.14(c) or as
required by applicable law or regulation, no Company Benefit Plan provides, or
reflects or represents any liability to provide, post termination or retiree
life insurance, health or other employee welfare benefits to any person for any
reason, and neither the Company nor any Company Subsidiary has ever
represented, promised, or contracted (whether orally or in writing) to any
employee (either individually or to employees as a group) or any other person
that such employee(s) or other persons would be provided with life insurance,
health or other employee benefits after termination or retirement.


 


(d)                                 Except as disclosed on Schedule 2.14(d), to
the Company’s and each Company Subsidiary’s Knowledge, no officer, executive
management team member or 


 


11

















 


operational team member
(referred to as “EMT” and “OMT” members in the Company chart and organization)
has informed the Company of her/his intention to terminate his or her
employment with the Company or any Company Subsidiary for any reason.


 


(e)                                  Except as set forth on Schedule 2.14(e) or as
required by applicable law, the Company is not a party to any agreement with
respect to which the execution and delivery of this Agreement, the Transaction
Documents or the consummation of the Transaction or any termination of
employment or service in connection therewith will: (i) result in any payment
(including severance, golden parachute, vacation, sick leave, bonus or
otherwise), becoming due and payable to any employee or former employee of the
Company or any Company Subsidiary, (ii) result in any forgiveness of
indebtedness payable by any employee or former employee to the Company or any
Company Subsidiary, (iii) materially increase any benefits otherwise payable by
the Company or any Company Subsidiary, or (iv) result in the acceleration of
the time of payment or vesting of any such benefits.


 


2.15.                        Company
Contracts.  A complete and accurate
list of all Company Material Contracts is set forth on Schedule 2.15.1. Except
as set forth on Schedule 2.15.2, none of the Company Material Contracts is a
Loss Contract. To the Knowledge of the Company each Company Material Contract
is the legal, valid, binding and enforceable agreement of the Company or a
Company Subsidiary, as the case may be, in full force and effect, except to the
extent such enforceability may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general applicability
affecting or relating to enforcement of creditors’ rights generally, and (B)
general equitable principles (regardless of whether such enforceability is
considered in equity or at law). Neither the Company nor any Company Subsidiary
is in default under any Company Material Contract, nor does any condition exist
that, to the Knowledge of the Company, with notice or lapse of time, or both,
would constitute a default thereunder. Each of the Company and each Company
Subsidiary is in compliance with all terms and requirements of each Company
Material Contract under which the Company or such Company Subsidiary has any
obligation or liability or by which the Company’s or any Company Subsidiary’s
asset is bound. Each other Person that has or had any obligation or liability
under any Company Material Contract under which the Company or any Company
Subsidiary has any rights is, in compliance with all applicable terms and
requirements of such Company Material Contract. Notwithstanding the parties
execution and delivery of the Transaction Documents and the consummation of the
Transaction contemplated thereunder and without regard to the same (it being
understood that any conflict, violation, breach or other contradiction
resulting therefrom is referenced and disclosed pursuant to Section 2.12,
above), no event has occurred or circumstance exists  that (with or without notice or lapse of
time) may contravene, conflict with, or result in a violation or breach of, or
give the Company or any Company Subsidiary or any other Person the right to
declare a default or exercise any remedy under, or to accelerate the maturity
or performance of, or to cancel, terminate or modify any Company Material
Contract. Neither the Company nor any Company Subsidiary has given to or to the
Knowledge of the Company received from any other Person, any notice regarding
any actual, alleged, possible or potential violation or breach of, or default
under, any Company Material Contract. To the Knowledge of the Company no event
has occurred or circumstance exists that (with or without notice or lapse of
time) has or may result in any stoppage, delay, termination or other change
with respect to any work performed or to be performed under any Company
Material Contract. Neither the Company nor any Company Subsidiary has given to
or to the Knowledge of the Company received from any other Person, any notice
regarding any 


 


12

















 


actual,
alleged, possible or potential stoppage, delay, termination or other material
change with respect to any work performed or to be performed under any Company
Material Contract. Except as otherwise mentioned in Schedules 2.15.1 and
2.15.2, there are no renegotiations of, attempts to renegotiate, or outstanding
rights to renegotiate any material amounts paid or payable to the Company or
any Company Subsidiary under any current or contemplated Company Material
Contract, and no such Person has made a written demand for such renegotiation.
Except as separately identified on Schedules 2.14(a), 2.14(b), 2.14(c), 2.14(d)
and 2.14(e), no approval or consent of any Person is needed in order that each
Company Material Contract continue in full force and effect following the
consummation of the Transaction.


 


2.16.                        Taxes.  Except as set forth in Schedule 2.16:


 


(a)                                  Filing of Tax Returns. The Company and each Company Subsidiary has
timely filed, or has had timely filed on its behalf, with the appropriate
taxing authorities all Tax Returns in respect of Taxes required to be filed by
the Company and each Company Subsidiary, as the case may be. The Tax Returns
filed (including any amendments thereof) are complete and accurate in all
material respects. The Company and each Company Subsidiary has on file all
material documents and records legally required to be established with respect
to such Taxes and Tax Returns. Except as set forth on Schedule 2.16(a), neither
the Company nor any Company Subsidiary has requested any extension of time
within which to file any Tax Return in respect of any Taxes, which Tax Return
has not since been filed in a timely manner. No claim has ever been made in
writing by any taxing authority in a jurisdiction where the Company or any
Company Subsidiary does not file Tax Returns, or has Tax Returns filed on its
behalf, that it is or may be subject to taxation by that jurisdiction, or
liable for Taxes owing to that jurisdiction. Except as set forth on Schedule
2.16(a), the Company and each Company Subsidiary (other than Hesperion Inc.) is
classified as a separate legal entity for tax purposes and Hesperion Inc. is
classified as a “C corporation” within the meaning of the Code (and any
comparable provisions of any applicable national or local tax laws).


 


(b)                                 Payment of Taxes. All Taxes owed by the Company and each
Company Subsidiary (whether or not shown as due on any Tax Returns for the
Subsidiary in the United States) have been paid in full and on time or adequate
reserves on the books and/or records have been established (for avoidance of
doubt, such reserves include, without limitation, all liability for Taxes
accruing in the nine (9) month period ended September 30, 2007). The Company
and each Company Subsidiary has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, shareholder, or other third party.
Where applicable, the Company and each Company Subsidiary has made all required
estimated Tax payments sufficient to avoid any underpayment penalties. The
unpaid Taxes of the Company or any Company Subsidiary (A) do not, as of the
Closing Date, exceed the reserve for Tax liability (rather than any reserve for
deferred Taxes established to reflect the timing differences between book and
Tax income) set forth on the face of the Company’s most recent consolidated
balance sheets (rather than any notes thereto) and (B) do not exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Company or the applicable
Company Subsidiary in filing, or having filed on its behalf, its Tax Returns.
The charges, accruals and reserves on the books of the Company and each Company
Subsidiary in respect of any liability for Taxes (x) based on or measured by
net income for any years or periods not finally determined (including, without
limitation, the nine (9) month period ended September 30, 2007), 


 


13

















 


(y) with respect to which
the applicable statute of limitations has not expired or (z) that has been
previously deferred, are adequate to satisfy any assessment for such Taxes for
any such years.


 


(c)                                  Audits, Investigations or Claims. The Company and each Company Subsidiary is
not currently a party to any Legal Proceeding or other dispute with any Swiss
federal, cantonal or communal authority or any foreign agency, authority or tribunal
for assessment or collection or enforcement of Taxes; nor has any claim for
assessment or collection of Taxes been asserted or threatened against the
Company or any Company Subsidiary and to the Knowledge of the Company there are
no outstanding or threatened issues relating to any Taxes. There is no
currently ongoing audit of any Tax Return of the Company or any Company
Subsidiary by any taxing authority, and neither the Company nor any Company
Subsidiary has been notified in writing that any taxing authority intends to
audit any outstanding Tax Return of the Company or any Company Subsidiary.
Neither the Company nor any Company Subsidiary has executed any outstanding
waivers or consents regarding the application of the statute of limitations
with respect to any Taxes or Tax Returns.


 


(d)                                 Lien. There are no encumbrances for Taxes (other than for current Taxes not
yet due and payable) on any assets of the Company or any Company Subsidiary.


 


(e)                                  Partnerships. Neither the Company nor any Company
Subsidiary owns an interest in a partnership for Tax purposes.


 


(f)                                    Dividends. Neither the Company nor any Company Subsidiary has declared, accrued,
set aside or paid any dividend or made any other distribution in respect of any
shares of capital stock since January 1st, 2004.


 


2.17.                        Environmental
Matters.  The Company and each
Company Subsidiary is in compliance with applicable Environmental Laws. The
Company and each Company Subsidiary has all Permits required pursuant to
Environmental Laws and are in compliance with the terms thereof. There are no
past or present events, activities, practices, incidents, actions or plans in
connection with the operations of the Company or any Company Subsidiary which
have given rise to any liability on the part of the Company or any Company
Subsidiary under any Environmental Law. Neither the Company nor any Company
Subsidiary has generated, used, transported, treated, stored, released or
disposed of, or has suffered or permitted anyone else (including, without
limitation, any subtenants or sublessees) to generate, use, transport, treat,
store, release or dispose of any Hazardous Substance in violation of any
Environmental Laws. There has not been any generation, use, transportation,
treatment, storage, release or disposal of any Hazardous Substance in
connection with the conduct of the business of the Company or any Company
Subsidiary or the use of any property or facility by the Company or any Company
Subsidiary, which has created or might reasonably be expected to create any
material liability under any Environmental Law or which would require reporting
to or notification of any Governmental Body. No asbestos containing materials
or polychlorinated biphenyl or underground storage tank is contained in or
located at any facility now or previously owned or leased by the Company or any
Company Subsidiary.


 


14

















 


2.18.                        Real Property.


 


(a)                                  Neither the Company nor any Company
Subsidiary owns any real property or any interest in any real property.


 


(b)                                 Each lease, sublease, license and other
agreements (collectively, the “Company Real Property Leases”) under which the
Company or any Company Subsidiary uses or occupies or has the right or
obligation to use or occupy or pay rent or other fees for use thereof, now or
in the future, any real property (the land, buildings and other improvements
covered by the Company Real Property Leases being hereinafter referred to as
the “Company Leased Real Property”) is valid, binding and in full force and
effect, and as of the Closing, all amounts owing pursuant to the Company Real
Property Leases will have been paid in full or accrued in full.


 


2.19.                        Broker’s
Fees.  No broker, finder, agent or
similar intermediary has acted on behalf of the Seller, the Company or any
Company Subsidiary in connection with this Agreement, the Transaction Documents
or the Transaction, and there are no brokerage commissions, finders’ fees or
similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with the Company or any Company
Subsidiary.


 


2.20.                        Insurance.  Schedule 2.20 contains a complete and
accurate list of all insurance policies to which the Company or any Company
Subsidiary is a party or that provides coverage to the Company or any Company
Subsidiary, or any director or officer of the Company or any Company Subsidiary
(collectively, the “Company Insurance Policies”).


 


(a)                                  Seller has delivered to Purchaser:


 


(i)                                     true and complete copies of all Company
Insurance Policies;


 


(ii)                                  true and complete copies of all pending
applications for material policies of insurance.


 


(b)                                 All Company Insurance Policies:


 


(A)                              are valid, outstanding, and enforceable;


 


(B)                                taken together, provide reasonably adequate
insurance coverage for the assets and the operations of the Company and each
Company Subsidiary for all reasonable risks to which the Company is exposed;


 


(C)                                are sufficient in light of industry standards
for compliance with all legal requirements and Material Company Contracts to
which any of the Company or any Company Subsidiary is a party or by which any
of them is bound;


 


(D)                               will continue in full force and effect
following the consummation of the Transaction, except for the Directors and
Officers insurance taken by the Seller on behalf of the group; and


 


15

















 


(E)                                 do not provide for any retrospective premium
adjustment or other experienced-based liability on the part of any Company or
Company Subsidiary.


 


(c)                                  None of the Seller, the Company or any
Company Subsidiary has received (A) any refusal of coverage or any notice that
a defense will be afforded with reservation of rights, or (B) any notice of
cancellation or any other indication that any insurance policy is no longer in
full force or effect or will not be renewed or that the issuer or any policy is
not willing or able to perform its obligations thereunder. Notwithstanding the
foregoing, and due to local practice, there is no insurance coverage for the
Company Subsidiary in Russia.


 


(d)                                 Each of the Seller, the Company and each
Company Subsidiary has paid all premiums due, and has otherwise performed all
of their respective obligations, under each Company Insurance Policy.


 


(e)                                  Each of the Seller, the Company and each
Company Subsidiary has given notice to the insurer of all claims that may be
insured under any Company Insurance Policy.


 


2.21.                        Labor
and Employment Matters.  Neither the
Company nor any Company Subsidiary is now bound by or party to any collective
bargaining agreement and, to the Knowledge of the Company, no application for
certification of a collective bargaining agent is pending. The Company and each
Company Subsidiary is, and at all times has been, in compliance with all
Applicable Laws affecting employment practices and terms and conditions of
employment including, without limitation, laws and regulations that relate to
employment generally, equal opportunity employment, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining, the payment of
taxes, occupational safety and health and plant closings. The services provided
by each employee of the Company or any Company Subsidiary are terminable at
will (where such legal concept is known and in effect and subject to local
laws) by the Company or such Company Subsidiary, as the case may be, in
accordance with the corresponding contractual termination periods and
Applicable Laws and such termination would result in no liability to the
Company or any such Company Subsidiary except – for the avoidance of doubt – as
provided by contractual termination provisions and Applicable Laws or as
otherwise accepted by Purchaser after the Closing Date.


 


2.22.                        Bank
Accounts.  Schedule 2.22 sets forth a
complete and accurate list of all (i) bank accounts or similar accounts maintained
by the Company and each Company Subsidiary, including a list of the names of
each bank or other financial institution at which such account is maintained,
the number of such account, the names of all persons authorized to make
withdrawals or to write checks on such accounts and the balance of each such
account as of date of this Agreement and as of the Closing, (ii) certificates
of deposit or similar cash equivalents held by the Company and each Company
Subsidiary, including a list of the names of each bank or other financial
institution at which such certificate of deposit or other cash equivalent is
maintained, the nature and type of such certificate of deposit or other cash
equivalent, the names of all persons authorized to withdraw, transfer or sell
any such certificate of deposit or cash equivalent and the total market value
of such certificate of deposit or cash equivalent as of the date of this
Agreement and as of the Closing.


 


16

















 


2.23.                        Interested
Party Transactions.  No current
officer or director of the Company, any Company Subsidiary, or Seller, or
Seller itself and, to the reasonable Knowledge of the Company no former officer
or director or current or former employee of the Company, any Company
Subsidiary, or Seller, has any interest in: (i) any equipment or other property
or asset, real or personal, tangible or intangible, including, without
limitation, any Intellectual Property owned or controlled by the Company or any
Company Subsidiary, used in connection with the Company’s or any Company
Subsidiary’s business, or in (ii) any agreement, obligation or commitment to
which the Company or any Company Subsidiary is a party. The Seller has not been
informed of any interest in: (iii) any creditor, supplier, customer,
manufacturer, or distributor of any of the Company or any Company Subsidiary
products, or in (iv) any entity that competes with the Company or any Company
Subsidiary, owned by current officer or director of the Company, any Company Subsidiary,
or Seller, or former officer or director or current or former employee of the
Company, any Company Subsidiary, or Seller; the Seller itself has no such
interest.


 


2.24.                        No
Alternative Transaction.  As of the
date hereof, neither the Company nor any Company Subsidiary, nor the Seller, is
engaged in any discussions or negotiations with any party other than Purchaser
with respect to any proposed acquisition transaction related to the Company or
any Company Subsidiary or sale of the Shares.


 


2.25.                        Minute
Book Contents.  The Company has
delivered to Purchaser, or its designated representative, copies of: (i) all
minutes of the meetings or actions by written consent of the shareholders of
the Company and each Company Subsidiary, (ii) all minutes of the meetings or
actions by unanimous written consent of the Company’s and each Company
Subsidiary’s board of directors, and (iii) the stock records of the Company and
each Company Subsidiary (collectively, the “Minute Book Contents”), except with
respect to the Company’s subsidiaries in the United States and the United
Kingdom for which the Company has delivered to Purchaser such Minute Book
Contents as are in the Company’s possession. The Minute Book Contents are
complete and accurate in all material respects and reflect all corporate action
taken to date the consummation of which required the approval of the directors
and/or the shareholders of the Company and each Company Subsidiary, as the case
may be, provided, however, that (i) with respect to the Company’s subsidiary in
the United States the representations in this sentence are limited to the time
period from August 29, 2006 to date; and (ii) with respect to the Company’s
subsidiary in the United Kingdom the representations in this sentence are
limited to the time period from October 7, 2004 to date.


 


2.26.                        Full
Disclosure.  This Agreement
(including the Disclosure Schedules) does not (i) contain any representation,
warranty or information that is false, inaccurate, incorrect or materially
incomplete. There is no fact known to Seller or the Company that has specific
application to the Company or any Company Subsidiary and that materially
adversely affects the assets, business, prospects, financial condition or
results of operation of the Company or any Company Subsidiary.


 


17

















 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES OF THE SELLER


 


The
Seller hereby further represents and warrants to the Purchaser as of the date
hereof as follows:


 


3.1.                              Marketable
Title.  Seller has good, marketable
and indefeasible ownership to, sole power of disposition over, and full right
to sell, transfer and convey to Purchaser, the Shares held by such Seller.


 


3.2.                              No
Liens.  The Shares held by the Seller
are, and shall be transferred to Purchaser, free and clear of any and all
Liens.


 


3.3.                              No
Preemptive Rights.  The Shares are
not subject to any right of first refusal, preemptive right or similar right in
favor of any third party, and Seller has not granted any third party any option
to purchase or other right to acquire any Shares.


 


3.4.                              Entire
Ownership Interest.  The Shares
constitute the Seller’s entire ownership interest in the Company.


 


3.5.                              No
Conflicts.  The sale, conveyance and
transfer of the Shares held by the Seller to Purchaser in accordance with the
terms of this Agreement will not conflict with or violate the terms of any
agreement with any third party.


 


3.6.                              No
Other Agreements with Respect to the Shares.  Seller is not a party to any agreement with
respect to voting or disposition or that otherwise relates to any of the
Shares, other than this Agreement.


 


3.7.                              Foreign
Seller.  Seller hereby represents
that it has satisfied itself as to the full observance of the all Applicable
Laws of Seller’s jurisdiction in connection with the sale of the Shares,
including (i) the legal requirements within its jurisdiction for the sale of the
Shares, (ii) any foreign exchange restrictions applicable to such sale, (iii)
any government or other consents that may need to be obtained, and (iv) the
income tax and other tax consequences (TO BE CHECKED), if any, that may be
relevant to the purchase, holding, redemption, sale or transfer of the Shares.
The Purchaser’s purchase of the Shares in accordance with the terms of this
Agreement will not violate any Applicable Laws of the Seller’s jurisdiction.


 


ARTICLE IV


 


REPRESENTATIONS AND WARRANTIES OF PURCHASER


 


Purchaser
hereby represents and warrants to the Seller as of the date hereof as follows:


 


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4.1.                              Organization and
Qualification; Subsidiaries. Purchaser
is a corporation duly incorporated or organized, validly existing and in good
standing under the laws of the State of Delaware, has requisite power and
authority and governmental approvals to own, lease and operate its properties
and to carry on its business as currently conducted.


 


4.2.                              Authority to Execute
and Perform Agreement. Purchaser
has the requisite power and all authority required to enter into, execute and
deliver this Agreement and the Transaction Documents to which it is a party, to
perform its obligations hereunder and thereunder and to consummate the
Transaction. The execution, delivery and performance by Purchaser of this
Agreement and the consummation by Purchaser of the Transaction have been duly
authorized by all necessary corporate action.


 


4.3.                              Binding Effect. This Agreement and the Transaction Documents
has been, or will be, validly executed and delivered by Purchaser and, assuming
the due execution and delivery hereof by the Seller, constitutes, or will
constitute, a valid and binding obligation of each of Purchaser, enforceable
against Purchaser in accordance with its terms, except to the extent such
enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general applicability
affecting or relating to enforcement of creditors’ rights generally, (ii) general
equitable principles (regardless of whether such enforceability is considered
in equity or at law), and (iii) principles of public policy with respect
to the enforcement of any indemnification or contribution provisions contained
in this Agreement and the Transaction Documents.


 


4.4.                              Broker’s Fees. No broker, finder, agent or similar
intermediary has acted on behalf of Purchaser in connection with this Agreement
or the Transaction, and there are no brokerage commissions, finders’ fees or
similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with Purchaser.


 


ARTICLE V



ADDITIONAL AGREEMENTS OF THE PARTIES


 


5.1.                              Filing of Tax Returns;
Payment of Taxes.


 


(a)                                  Seller shall, at Seller’s expense, prepare or
cause to be prepared and file or cause to be filed all tax returns of the
Company or any Company Subsidiary which are due on or before the Closing Date,
and Seller or the Company shall pay, or the Company shall accrue in accordance
with applicable Laws, all Taxes due with respect to such periods.
Notwithstanding the foregoing, Seller agrees not to, and agrees to cause the
Company and each Company Subsidiary not to, (a) take any actions on or as
of the Closing Date with respect to any such entity which are not in the
ordinary course of business, or (b) make any tax elections which are
effective on or before the Closing Date. Seller shall prepare and file such tax
returns in a manner consistent with prior practice, except as required by a
change in Applicable Law.


 


(b)                                 Seller and Purchaser agree, upon request from
the other party, to use their commercially reasonable best efforts to obtain
any certificate or other document from any Governmental Body or any other
Person as may be necessary to mitigate, reduce or 


 


19

















 


eliminate any Tax that could
be imposed (including, but not limited to, with respect to the Transaction).


 


(c)                                  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 party
incurring such Taxes and fees.


 


5.2.                              Notification of
Certain Matters. The Seller shall
give prompt notice to the Purchaser if it becomes aware of any of the following
after the date of this Agreement: (i) any notice of, or other
communication relating to, a default, or event which with notice or lapse of
time or both would become a default, under any Company Material Contract; (ii) receipt
of any notice or other communication in writing from any person alleging that
the consent of such person is or may be required in connection with the
Transaction; (iii) receipt of any notice or other communication from any
Governmental Agency or Governmental Body in connection with the Transaction; (iv) the
occurrence or non-occurrence of any fact or event which could reasonably be
expected to cause any covenant, condition or agreement hereunder not to be
complied with or satisfied in any material respect; (v) the commencement
or threat of any litigation involving or affecting the Company or any Company
Subsidiary, or any of their respective properties or assets; (vi) the
occurrence or non-occurrence of any fact or event that causes a breach by
Company of any provision of this Agreement, and (vii) the occurrence of
any event that, had it occurred prior to the date of this Agreement without any
additional disclosure hereunder, would have constituted a Company Material
Adverse Effect.


 


5.3.                              Exclusivity. Prior
to the Closing Date:


 


(a)                                  Neither the Seller nor the Company, nor any
of their- respective officers, directors, employees, agents, affiliates,
shareholders, accountants, counsel, investment bankers, financial advisors or
other representatives (collectively, “Representatives”) shall, (i) directly
or indirectly, initiate, solicit or encourage, or take any action to facilitate
the making of, any Acquisition Proposal, (ii) enter into any agreement or
take any other action that by its terms could reasonably be expected to
adversely affect the ability of the parties hereto consummate the Transaction,
or (iii) directly or indirectly engage or otherwise participate in any
discussions or negotiations with, or provide any information or data to, or
afford any access to the properties, books or records of the Company to, or
otherwise assist, facilitate or encourage, any person (other than the Purchaser
or any affiliate or associate thereof) relating to any Acquisition Proposal.


 


(b)                                 The Company and each of its Representatives
shall immediately cease and cause to be terminated all existing discussions and
negotiations, if any, with any other persons conducted heretofore with respect
to any Acquisition Proposal.


 


(c)                                  For purposes of this Agreement, an “Acquisition
Proposal” means any inquiry, proposal or offer from any person relating to (i) any
direct or indirect acquisition or purchase of any of the assets of the Company
or any Company Subsidiary out of the ordinary course of business or any of the
capital stock or voting power (or of securities or rights convertible into or
exercisable for such capital stock or voting power) of the Company or any
Company Subsidiary, (ii) any tender offer or exchange offer that if
consummated would result in any person beneficially owning any capital stock or
voting power (or of securities or 


 


20

















 


rights convertible into or
exercisable for such capital stock or voting power) of the Company or any
Company Subsidiary, or (iii) any merger, consolidation, business
combination, recapitalization, liquidation, dissolution, sale of Shares or
similar transaction involving the Company or any of the Company Subsidiaries.
Each of the transactions referred to in clauses (i) - (iii) of the
foregoing definition of Acquisition Proposal, other than the Transaction
proposed by this Agreement, is referred to herein as an “Acquisition
Transaction.”


 


5.4.                              Non-Competition. For a period of three (3) years after
the Closing Date, the Seller shall not, directly or indirectly, engage or
invest in, own, manage, operate, or control, or participate in the ownership,
management, operation, or control of, any business whose products or activities
compete in the Territory with the Purchaser and/or Company or any affiliate of
Purchaser and/or Company within the Business Scope as defined herein. For
purposes of this non-competition covenant, the term “Territory” shall mean the
whole world and the term “Business Scope” shall mean regulatory services and
clinical project management in areas such as contract services related to the
conduct of Phase I through Phase IV human clinical trials including project
management, monitoring, data management, biostatistics, and medical writing of
the nature provided by the Purchaser and Company at the Closing Date. For the
avoidance of doubt, the following shall not be considered as a competition
under the terms of this Article 5.4. :


 


•                  collaborative
or services agreement signed by Seller with a third party involved in the
Business Scope;


 


•                  acquisition
of Seller by a third party involved in the Business Scope.


 


5.5.                              Non-Solicitation of Employees.                           For a period of three (3) years after
the Closing Date, the Seller shall not solicit or entice away from their
employment or engagement with Company, its subsidiaries or affiliates, any
employee, contractor, consultant or contract partner. For the avoidance of
doubt, the terms of the present Article 5.5 shall not be interpreted as
preventing Seller to work with any consultant and contract partner engaged by
Company or Company Subsidiaries.


 


5.6.                              Confidentiality. Unless (i) otherwise expressly provided
in this Agreement, (ii) required by Applicable Law, (iii) necessary
to secure any required consents as to which the other party has been advised,
or (iv) consented to in writing by Purchaser and the Company, this
Agreement and any information or documents furnished in connection herewith
shall be kept strictly confidential by the parties hereto and their respective
Representatives. Prior to any disclosure pursuant to the preceding sentence,
the party intending to make such disclosure shall consult with the other party
to the extent practicable regarding the nature and extent of the disclosure.
Subject to the preceding sentence, nothing contained herein shall preclude
disclosures to the extent necessary to comply with accounting, SEC and other
disclosure obligations imposed by Applicable Law or in connection with the due
diligence or other investigation of the Purchaser by potential third party
investors or lenders in Purchaser if such third party is bound by similar
confidentiality restrictions. In the event the Transaction is not consummated,
Purchaser, Seller and the Company shall return to the other all documents
furnished by the other and all copies thereof made by such party and will hold
in absolute confidence all information obtained from the other party except to
the extent (i) such party is required to disclose such information by
Applicable Law or such disclosure is necessary in 


 


21

















 


connection
with the pursuit or defense of a claim, (ii) such information was known by
such party prior to such disclosure or was thereafter developed or obtained by
such party entirely independent of and without reference to such disclosure, (iii) such
party received such information on a non-confidential basis from a source,
other than the other party, which is not known by such party to be bound by a
confidentiality obligation with respect thereto or (iv) such information
becomes generally available to the public or is otherwise no longer
confidential. Prior to any disclosure of information pursuant to the exception
in clause (i) of the preceding sentence, the party intending to disclose
the same shall so notify the party which provided the same to the extent
practicable in order that such party may seek a protective order or other
appropriate remedy should it choose to do so.


 


5.7.                              Reasonable Efforts.
Each party hereto shall, and shall
cause its respective Subsidiaries to, take or cause to be taken all actions
necessary, proper or advisable to consummate the Transaction. Without limiting
the generality of the foregoing, each of the parties hereto shall, and shall
cause its respective Subsidiaries to, obtain all authorizations, consents,
orders and approvals of federal, state, and local regulatory bodies, that are
or may become necessary for the performance of its respective obligations
pursuant to this Agreement, the Transactions Documents and the consummation of
the Transaction, and shall cooperate fully in promptly seeking to obtain such
authorizations, consents, orders and approvals as may be necessary for the
performance of its respective obligations pursuant to this Agreement and the
Transaction Documents. The parties shall not take, and shall cause their
respective subsidiaries not to take, any action which would have the effect of
delaying, impairing or impeding the receipt of any required regulatory
approvals, and the parties shall use, and shall cause their respective
subsidiaries to use, commercially reasonable efforts to secure such approvals
as promptly as possible. The parties shall use, and shall cause their
respective subsidiaries to use, commercially reasonable efforts not to take any
action or enter into any transaction which would result in a breach of any
covenant made by such party in this Agreement.


 


5.8.                              Further Assurances.
At any time and from time to time after
the Closing, each party to this Agreement agrees to cooperate with each other
party and to execute and deliver such other documents, instruments of transfer
or assignment, files, books and records and do all such further acts as may be
reasonably required to consummate the Transaction.


 


5.9.                              Public Disclosure.
Prior to the Closing, each party to
this Agreement shall consult with each other party before issuing any press
release or otherwise making any public statements, announcements or
communications with respect to this Agreement or the Transaction and shall not
issue any such press release or make any such public statement, announcement or
communication without the prior consent of the other parties, which consent
shall not be unreasonably withheld. If any public statement, announcement or
communication is required by Applicable Law to be made by any party to this
Agreement, prior to making such statement, announcement or communication, such
party will deliver a draft thereof to the other parties and shall give the
other parties an opportunity to comment thereon.


 


5.10.                        Intercompany Contracts and
Assets. To the extent that Seller
or any of its affiliates provides the Company or any Company Subsidiary any
service or use of assets pursuant to a contract or other arrangement between
Seller (or any of its affiliates) and a third party, upon request by Purchaser,
the parties agree to cooperate to cause the Company or the applicable Company
Subsidiary to directly enter into a new contract with such third party with 


 


22

















 


respect
to such services or assets prior to the Closing. Prior to the Closing, Seller
agrees to transfer or assign, as applicable, to the Company or the applicable
Company Subsidiary any contracts and assets that are used or necessary solely
for the benefit of the business of the Company or any Company Subsidiary, but
which are held by Seller or any of its affiliates other than the Company or any
Company Subsidiary.


 


5.11.                        Letter of Credit. For the thirty (30) days following the
Closing Date, Purchaser shall use its commercially reasonable efforts in good
faith to obtain an irrevocable stand-by letter of credit from a reputable
international bank for the purpose of securing payment under the Note.


 


5.12.                        Election of New Board and
Discharge of Former Board. At
Closing Purchaser shall elect new Board members of the Company and grant
discharge to the leaving Board members of the Company.


 


ARTICLE VI



CONDITIONS TO CLOSING


 


6.1.                              Conditions to Each
Party’s Obligations to Consummate the Transaction. The respective obligations of each party to this Agreement to
consummate the Transaction shall be subject to the following conditions, unless
waived in writing prior to the Closing Date by such party:


 


(a)                                  All consents, approvals, authorizations,
orders and action of any Governmental Body required to permit the consummation
of the Transactions shall have been obtained or made and shall be in full force
and effect.


 


(b)                                 No action shall have been taken, and no
statute, rule, regulation, executive order, judgment, decree, or injunction
shall have been enacted, entered, promulgated or enforced (and not repealed,
superseded, lifted or otherwise made inapplicable), by any court or governmental
or regulatory agency of competent jurisdiction which restrains, enjoins or
otherwise prohibits the consummation of the Transaction (each party agreeing to
use its reasonable best efforts to avoid the effect of any such statute, rule,
regulation or order or to have any such order, judgment, decree or injunction
lifted).


 


6.2.                              Conditions to
Obligations of Purchaser to Consummate the Transaction. The obligation of Purchaser to consummate the
Transaction shall be subject to the satisfaction of the following conditions,
unless waived in writing prior to the Closing Date by Purchaser:


 


(a)                                  The representations and warranties of the
Seller and the Company contained herein that are qualified as to materiality or
a Company Material Adverse Effect (or similar concept) shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, in each case at and as of the Closing with the same force and effect
as though made at and as of the Closing (except to the extent a representation
or warranty speaks specifically as of an earlier date, in which case as of such
date).


 


23

















 


(b)                                 The Seller and the Company shall have
performed, in all material respects, all obligations and complied with all
covenants required by this Agreement to be performed or complied with, in all
material respects, by it prior to the Closing.


 


(c)                                  No event has occurred or circumstance exists
that (with or without notice or lapse of time) has resulted in or may result
in any material change with respect to any work performed or to be performed
with respect to any Back Log described in Schedule 2.7 (b).


 


(d)                                 All consents, approvals, authorizations, or
action of any third party required to permit the consummation of the Transactions
shall have been obtained or made and shall be in full force and effect.


 


(e)                                  The Seller shall have executed and delivered
to the Purchaser a certificate, dated the Closing Date evidencing compliance
with Sections 6.2(a)-(d) hereof.


 


(f)                                    The Seller shall have delivered to Purchaser
the certificate representing its Shares, duly endorsed to Purchaser.


 


(g)                                 The Seller shall have delivered to Purchaser
a resolution of the Company’s board of directors approving the transfer of the
Shares to Purchaser and entering Purchaser into the stock ledger of the Company
as owner of Shares.


 


(h)                                 The Seller shall have delivered to Purchaser
the original stock ledger wherein the transfer of the Shares by Seller to
Purchaser has been duly registered.


 


(i)                                     The Seller shall have delivered to Purchaser
the original resignation letters of each member of the Board of Directors with
the exception of Markus Weissbach, M.D., Ph.D.


 


6.3.                              Conditions to
Obligations of the Seller to Consummate the Transaction.  The
obligation of the Seller to consummate the Transaction shall be subject to the
satisfaction of the following conditions, unless waived in writing prior to the
Closing Date by the Seller:


 


(a)                                  The representations and warranties of
Purchaser contained herein that are qualified as to materiality or a Purchaser
Material Adverse Effect (or similar concept) shall be true and correct, and
those not so qualified shall be true and correct in all material respects.


 


(b)                                 Purchaser shall have performed, in all
material respects, all obligations and complied with all covenants required by
this Agreement to be performed or complied with, in all material respects, by
each of them prior to the Closing.


 


(c)                                  All consents, approvals, authorizations, or
action of any third party required to permit the consummation of the
Transactions shall have been obtained or made and shall be in full force and
effect.


 


24

















 


ARTICLE VII



INDEMNIFICATION


 


7.1.                              Survival of
Representations and Warranties.


 


(a)                                  All of the representations and warranties
contained in Article II and Article III of this Agreement shall
survive until eighteen (18) months after the Closing Date (the “Termination
Date”), at which time liability therefor shall cease, except as provided in the
last sentence of this Section 7.1. Notwithstanding the foregoing, the
representations and warranties contained in Section 2.1, Section 2.2,
Section 2.3 and Section 2.4 shall survive indefinitely and the
representations and warranties in Section 2.12, Section 2.16 and Section 2.17
shall survive until the lapsing of the appropriate statute of limitations, at
which time liability therefor shall cease. If at any time prior to the
applicable Termination Date or expiration of the appropriate statue of limitations,
as applicable, an Indemnified Party (as defined below) delivers to the Seller a
written notice alleging, in good faith, the existence of an inaccuracy in or
breach of any the representations and warranties of the Company or the Seller
(and setting forth in reasonable detail the basis for such Indemnified Party’s
belief that such an inaccuracy or breach may exist) and asserting a claim
for recovery under Section 7.2 based on such alleged inaccuracy or breach,
then the representation or warranty underlying the claim asserted in such
notice shall survive the applicable Termination Date or expiration of the
appropriate statute of limitations, as applicable, solely for the purposes of
resolving such claim and only until such time as such claim is fully and finally
resolved. All of the covenants, agreements and obligations of the parties
contained in this Agreement or any other document, certificate, schedule or
instrument delivered or executed in connection herewith shall survive (i) until
fully performed or fulfilled, unless non-compliance with such covenants,
agreements or obligations is waived in writing by the party or parties entitled
to such performance or (ii) if not fully performed, until the expiration
of the relevant statute of limitations.


 


(b)                                 The representations, warranties, covenants
and obligations of the Company and the Seller, and the rights and remedies that
may be exercised by the Indemnified Parties, shall not be limited or
otherwise affected by or as a result of any information furnished to, or any
investigation made by or knowledge of, any of the Indemnified Parties or any of
their representatives. The parties recognize and agree that the representations
and warranties also operate as bargained for promises and risk allocation
devices and that, accordingly, any party’s knowledge, and the waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, shall not affect
the right to indemnification or payment of Losses pursuant to this Article VII,
or other remedy based on such representations, warranties, covenants and
obligations, except to the extent set forth in a written agreement waiving such
rights executed by the party giving such waiver.


 


(c)                                  For purposes of this Article VII, each
statement or other item of information set forth in the disclosure schedule delivered
by the Company pursuant to Article II hereof shall be deemed to be a
representation and warranty made by the Company in this Agreement.


 


25

















 


(d)                                 Nothing in this Article VII or elsewhere
in this Agreement shall be construed to limit Purchaser’s rights or remedies
with respect to any claim for fraud or intentional misrepresentation.


 


(e)                                  The Parties waive all notification and
examination requirements under article 201 CO. In particular, except as
otherwise provided in Section 7.1, Purchaser may assert claims for
misrepresentation or breaches of representations or warranties in any written form and
at any time prior to the lapse of the respective periods set forth in Section 7.1(a).
These time limits shall override the statutory time limits set in out in article 210
CO.


 


7.2.                              Indemnification. Subject to the terms and conditions contained
herein, the Seller shall indemnify, defend and hold harmless Purchaser, and its
Representatives (all such persons and entities being collectively referred to
as the “Indemnified Parties” and individually as an “Indemnified Party”) from,
against, for and in respect of any Losses (as defined below) to the extent
caused by or arising out of any inaccuracy in or breach of any of the
representations, warranties or covenants made by the Seller or the Company in
this Agreement; provided that no Indemnified Party shall be entitled to
indemnification pursuant to this Section for any Losses of an individual
amount under Thirty Thousand Euro (€30,000) until the aggregate amount of such
Losses under all claims for Indemnified Parties exceeds One Hundred and Twenty
Five Thousand Euro (€125,000) (the “Threshold”), at which time the Indemnified
Parties shall be entitled to indemnification for all Losses, not just those in
excess of the Threshold. Subject to compliance with this Article VII and
for so long as the Note is outstanding, the indemnification obligations of the
Seller and the repayment of any Losses shall be satisfied first by offsetting
the amount of any such Losses against the outstanding principal and interest
under the Note thereby reducing the amount of such principal and interest by an
amount equal to such Losses. In this Agreement, the term “Losses” shall refer
to any damages (including consequential, indirect and special damages), claim,
demand, settlement, judgment, award, fine, penalty, Tax, costs (including costs
of investigation) and expenses (including legal fees and expenses, whether
relating to a third-party claim, an action by an Indemnified Party to enforce
its rights under the Agreement or any other action, proceeding or claim),
injury, decline or diminution in value, lost opportunity, lost profits,
liability (contingent or otherwise) that any Indemnified Party may sustain
or incur.


 


7.3.                              Claims for
Indemnification.


 


(a)                                  If any Indemnified Party becomes aware of any
Losses for which such Indemnified Party will seek indemnification, such
Indemnified Party shall deliver to the Seller, on or before the Termination
Date, a certificate signed by any authorized signatory of the Indemnified Party
(a “Claim Certificate”) stating that with respect to the indemnification
obligations set forth in Section 7.2, Losses exist and specifying in
reasonable detail the individual items of such Losses included in the amount so
stated, the date each such item was paid, properly accrued or arose, the nature
of the inaccuracy in, or breach of warranty, representation or covenant to
which such item is related and an estimate of attorney’s fees and expenses
necessary to conclude the matter. If the Seller does not object to such
claim(s) within fifteen (15) business days after the delivery of the Claim
Certificate to the Seller, then Purchaser shall be entitled to be reimbursed for
such Losses as set forth herein and to exercise Purchaser’s right of offset.


 


26

















 


(b)                                 The Seller may object to the claim in
the Claim Certificate by delivery to the Indemnified Party of such objection in
writing within fifteen (15) business days after the delivery of the Claim
Certificate to the Seller. In case the Seller shall so object in writing to any
claim or claims by an Indemnified Party made in any Claim Certificate, the
Indemnified Party shall have fifteen (15) business days to respond in a written
statement to the objection of the Seller. If after such second fifteen (15)
business day period there remains a dispute as to any claims set forth in a
Claim Certificate, the Seller and the relevant Indemnified Party shall attempt
in good faith for sixty (60) days to agree upon the rights of the respective
parties with respect to each of such claims. If the Seller and Indemnified
Party should so agree, a memorandum setting forth such agreement shall be prepared
and signed by both the Seller and the Indemnified Party, and the Indemnified
Party shall be entitled to reimbursement for such Losses as set forth herein.


 


(c)                                  If no agreement can be reached after good
faith negotiation between the parties pursuant to subsection (b) above,
the Indemnified Party or the Seller may, by written notice to the other, demand
binding arbitration of the matter. Any conflicts arbitrated pursuant to this Section 7.3
shall be arbitrated in accordance with the provisions of Section 9.2 of
this Agreement.


 


7.4.                              Challenge of Third
Party Claims.


 


(a)                                  Promptly after receipt by an Indemnified
Party of notice of the assertion or commencement by any third party of any
claim, investigation, proceeding or action with respect to which the Seller may become
obligated to indemnify, hold harmless, compensate or reimburse an Indemnified
Party pursuant to this Article VII, such Indemnified Party will give
notice to the Seller of the commencement of such claim (“Claim Notice”), but
the failure to notify the Seller will not relieve the Seller of any liability
that it may have to any Indemnified Party, except to the extent that the
Seller demonstrates that the defense of such action is prejudiced by
Indemnified Party’s failure to give such notice.


 


(b)                                 The Seller may elect to participate, at
its sole cost and expense, with such Indemnified Party to challenge any claims
that are asserted by a third party for which Indemnified Party has delivered
the Claim Notice to the Seller. If the Seller elects to participate, the Seller
must deliver a notice to the Indemnified Party within twenty (20) calendar days
after the receipt of the Claim Notice. The Seller shall not, without the
Indemnified Party’s prior written consent, settle or compromise any third party
claims or consent to entry of any judgment. The Indemnified Party shall consult
with the Seller with respect to any claims asserted by a third party, and will
inform the Seller of all material developments with respect to such
claims, but the Indemnified Party shall have the right in its sole discretion
to settle any claim.


 


(c)                                  For avoidance of doubt, notwithstanding the
provisions of this Section 7.4, as between the parties, claims for
indemnification shall remain subject to the claims procedure set forth in Section 7.3.


 


7.5.                              No Contribution. The Seller shall not have and shall not
exercise or assert (or attempt to exercise or assert), any right of
contribution, right of indemnity or other right or remedy against the Company
in connection with any indemnification obligations or any other liability to
which the Seller may become subject to in connection with this Agreement.


 


27

















 


7.6.                              Limitation on
Indemnification; Right to Offset.


 


(a)                                  Amount Limitation. The Seller shall not have any obligation to
indemnify any Indemnified Party under this Article VII to the extent the
aggregate amount of the Claims for which the Indemnified Parties are entitled
to indemnification hereunder exceeds an amount equal to Two Million Five
Hundred Thousand Euro (€2,500,000) (after which point the Seller will have no
obligation to indemnify any Indemnified Party from and against any further
Claims).


 


(b)                                 Right to Offset. The Purchaser shall have the right, in
addition to any other rights of the Indemnified Parties hereunder and in law or
equity, to offset the outstanding balance of unpaid principal and interest
under the Note against any amounts due to the Purchaser or any other
Indemnified Party from the Seller under this Article VII. For avoidance of
doubt, the Purchaser’s right to offset shall be subject to the amount
limitation set forth in Section 7.6(a) and the eighteen month
Termination Date provision set forth in Section 7.1(a).


 


ARTICLE VIII



TERMINATION


 


8.1.                              Termination. This Agreement may be terminated at any
time, upon the earlier of any one of the following prior to the Effective Time:


 


(a)                                  by the mutual written consent of the parties
to this Agreement;


 


(b)                                 by either the Seller or Purchaser, by written
notice to the other if, for any reason, the Closing has not occurred prior to
the close of business on October 31, 2007; provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(b) shall
not be available to the Seller or Purchaser, as applicable, if the party
seeking to terminate the Agreement is responsible for the delay;


 


(c)                                  by Seller or Purchaser, by written notice to
the other, if prior to Closing any court of competent jurisdiction shall have
issued an order, judgment or decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the Transaction and such order,
judgment or decree shall have become final and non-appealable;


 


(d)                                 at the election of Seller or Purchaser, if
prior to Closing the other has breached any representation, warranty, covenant
or agreement contained in this Agreement, which breach has not been cured on or
before thirty (30) Business Days following delivery of written notice of such
breach by the non-breaching party; provided, however, that the right to
terminate this Agreement pursuant to this Section 8.1(d) shall not be
available to the Seller or Purchaser if such party at such time, is in breach
of any representation, warranty, covenant or agreement set forth in this
Agreement.


 


8.2.                              Effect of Termination.
In the event of the termination of this
Agreement by either the Seller or Purchaser pursuant to Section 8.1, (i) this
Agreement shall forthwith 


 


28

















 


become
void and have no further force or effect, and (ii) there shall be no
liability under this Agreement on the part of Purchaser, the Seller or the
Company.


 


8.3.                              Expenses. All costs and expenses incurred in connection
with this Agreement and the Transaction shall be paid by the party incurring
such costs and expenses, whether or not the Transaction is consummated. At the
closing, the Seller shall pay all costs and expenses incurred in connection
with this Agreement and the Transaction by the Seller, including, without
limitation, all attorney’s fees incurred by the Seller or the Company in
connection with the Transaction.


 


8.4.                              No Rescission. Any rescission of this Agreement after
Closing (including but not limited to Wandelung in
the sense of Art. 207 CO or invocation of error in the sense of art. 24 CO )
shall be excluded.


 


ARTICLE IX



MISCELLANEOUS


 


9.1.                              Certain Definitions; Rules of
Construction. Definitions shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed to be references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. All Exhibits and Schedules attached hereto
shall be deemed incorporated herein as if set forth in full herein and, unless
otherwise defined therein, all terms used in any Exhibit or Schedule shall
have the meaning ascribed to such term in this Agreement. The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The words “hereof,” “herein”
and “hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise expressly provided herein, any agreement, plan,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, plan, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. For the purposes of
this Agreement, the following terms shall have the following meanings:


 


“Applicable Law” means any national, federal,
state or local law, regulation, code, ordinance, statute, rule, Order,
judgment, decree or other requirement of a Governmental Body applicable to the
business of the Seller, Company, any Company Subsidiary or Purchaser as the
context may require.


 


“Benefit Plan” means each deferred
compensation, executive compensation, incentive compensation, stock purchase or
other stock-based compensation plan, severance or termination pay, sick leave
insurance, occupational and non-occupational insurance, holiday, vacation or
other bonus plan or practice, hospitalization or other medical, life or other
insurance, supplemental unemployment benefits, profit sharing, mandatory and
nonmandatory pension, or 


 


29

















 


retirement
plan, program, agreement, commitment or arrangement, and each other employee
Benefit Plan, program, agreement or arrangement.


 


“Business Day” means any day other than
Saturday or Sunday or any other day on which banks in Zurich/Switzerland are
permitted or obligated to be closed for business, provided, however, that with
respect to the giving of notice hereunder, the term “Business Day” shall also
exclude nationally recognized holidays in the country where notice is received.


 


“Claim” means any action, suit, claim,
complaint, demand, litigation or similar proceeding.


 


“CO” means Swiss Code of Obligations, as
amended.


 


“Company Material Adverse Effect” means any
change, effect, event or occurrence that is materially adverse to the condition
(financial or otherwise), assets, properties, business, or operations of the
Company or any Company Subsidiary.


 


“Environmental Laws” means all applicable
statutes, rules, regulations, ordinances, orders, decrees, judgments, permits,
licenses, consents, approvals, authorizations, and governmental requirements or
directives or other obligations lawfully imposed by any Governmental Body or
Governmental Agency under national, federal, state, local or common law,
indemnity agreements or other contractual obligations, in each case, pertaining
to the protection of the environment, protection of public health, protection
of worker health and safety, the treatment, emission and/or discharge of
gaseous, particulate and/or effluent pollutants, and/or the handling of
hazardous materials.


 


“Environmental Matter” means any matter
arising out of, relating to, or resulting from pollution, contamination,
protection of the environment, human health or safety, health or safety of
employees, sanitation, and any matters relating to emissions, discharges,
disseminations, releases or threatened releases, of Hazardous Substances into
the air (indoor and outdoor), surface water, groundwater, soil, land surface or
subsurface, buildings, facilities, real or personal property or fixtures or
otherwise arising out of, relating to, or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, release or threatened release of Hazardous Substances.


 


“Exchange Act” means the Securities and
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.


 


“Governmental Body” means any court,
administrative or regulatory agency or commission or other governmental
authority of competent jurisdiction.


 


“Governmental Agency” means (i) the
Government of Switzerland, including all departments and agencies of any branch
of the Government of Switzerland, all independent agencies or
instrumentalities  and (ii) any
cantonal or communal government, including all departments, agents, agencies,
branches, independent agencies or instrumentalities, activities, and
non-appropriated fund activities of or within a regional or local government
and all regional or local government corporations.


 


30

















 


“Hazardous Substances” means any pollutants,
contaminants, toxic or hazardous or extremely hazardous substances, materials,
wastes, constituents, compounds, chemicals (including, without limitation,
petroleum or any by-products or fractions thereof, any form of natural
gas, Bevill Amendment materials, lead, asbestos and asbestos-containing
materials (“ACM”), building construction materials and debris, polychlorinated
biphenyls (“PCBs”) and PCB-containing equipment, radon and other radioactive
elements, ionizing radiation, electromagnetic field radiation and other
non-ionizing radiation, sonic forces and other natural forces, infectious,
carcinogenic, mutagenic, or etiologic agents, pesticides, defoliants,
explosives, flammables, corrosives and urea formaldehyde foam insulation) that
are regulated by any Environmental Laws. For the purpose of the present
Agreement “Hazardous Substance” shall not include drugs held by the Company or
the Company Subsidiary for the purpose of their business.


 


“Intellectual Property” means all of the
following as they are used in connection with the business of a Person as
presently conducted and as they exist in all jurisdictions or any treaty regime
throughout the world, in each case, to the extent owned or controlled by such
Person:


 


(a)                                  patents, patent applications and inventions,
designs and improvements described and claimed therein, patentable inventions
and other patent rights (including any divisions, continuations,
continuations-in-part, substitutions, or reissues thereof, whether or not
patents are issued on any such applications and whether or not any such
applications are modified, withdrawn, or resubmitted);


 


(b)                                 trademarks, service marks, trade dress, trade
names, brand names, designs, logos, or corporate names, whether registered or
unregistered, and all registrations and applications for registration thereof;


 


(c)                                  copyrights and mask works, including all
renewals and extensions thereof, copyright registrations and applications for
registration thereof;


 


(d)                                 trade secrets, confidential business
information and other proprietary information, concepts, ideas, designs,
research or development information, processes, procedures, techniques,
technical information, specifications, operating and maintenance manuals,
engineering drawings, methods, know-how, technical data and databases,
discoveries, inventions, modifications, extensions, improvements, and other
proprietary rights (whether or not patentable or subject to copyright, mask
work, or trade secret protection);


 


(e)                                  computer software programs, including, without
limitation, all source code, object code, and documentation related thereto;
and


 


(f)                                    Internet addresses, domain names, web sites,
web pages and similar rights and items.


 


“Knowledge” with respect to any Person, means
the actual knowledge of any individual or the officers, senior managers or
directors of such Person, in each case after reasonable inquiry.


 


31

















 


“Lien” means any mortgage, pledge, lien,
charge, easement, restrictive covenant, encumbrance, voting or transfer
restriction, or security interest.


 


“Loss Contract(s)” means  those Company
Material Contracts pursuant to which the Company will incur a Net Loss.


 


“Material Contracts” means all of the
following contracts, agreements, understanding or arrangements (each, a “Contract”):


 


(a)                                  any Contract relating to the employment of
any executive management team member or operational team member;


 


(b)                                 any Contract relating to the acquisition,
transfer, development, sharing or license of any material Intellectual Property
(except for any Contract pursuant to which any material Intellectual Property
is licensed to a Person under any third party software license generally
available to the public at a cost of no more than CHF 120,000);


 


(c)                                  any Contract which provides for
indemnification of any officer, director, employee or agent of a Person;


 


(d)                                 any Contract imposing any restriction on the
right or ability of a Person to (i) compete with any other Person, (ii) acquire
any material product or other material asset or any services from any other
Person, sell any material product or other material asset to or perform any
services for any other Person or transact business or deal in any other manner
with any other Person, (iii) develop or distribute any material technology,
(iv) make, have made, use or sell any current products or products under
development, or (v) acquire any capital stock or other security of any
Person;


 


(e)                                  any Contract that contemplates or involves
payment or delivery of cash or other consideration in an amount or having a
value in excess of CHF 150,000 in the aggregate, or contemplates or involves
the performance of services having a value in excess of CHF 150,000 in the
aggregate;


 


(f)                                    any other Contract, if a breach or
termination of such Contract would reasonably be expected to have a Material
Adverse Effect on a Person;


 


(g)                                 any Contract pursuant to which the Company or
any Company Subsidiary is required to give notice or provide information to or
otherwise obtain the consent of any Person prior to considering, negotiating,
accepting or consummating any Acquisition Proposal  or entering into any discussions, agreements,
arrangements relating to any Acquisition Transaction.


 


(h)                                 any Contract for the lease of real property;


 


(i)                                     any Contract guarantying the performance of
any Person or guarantying any indebtedness for borrowed money;


 


(j)                                     any Contract containing any covenant limiting
in any respect the right of a Person (1) to engage in any line of
business, (2) to develop, market or distribute any 


 


32

















 


products or services, or (3) to
compete with any Person or granting any exclusive distribution rights; and


 


(k)                                  any Contract granting to a Person any credit,
extending any loan or other borrowing facility.


 


“Net Loss(es)” means, with respect to any
applicable Company Material Contract, the revenue derived by the Company with
respect to such Company Material Contract is less than all direct and/or out of
pocket costs, fees and expenses incurred by the Company in connection with
performing its obligations thereunder.


 


“Purchaser Material Adverse Effect” means any
change, effect, event or occurrence that is materially adverse to the condition
(financial or otherwise), assets, properties, prospects, business or operations
of Purchaser or any Purchaser Subsidiary.


 


“Person” means any individual, corporation,
partnership, limited liability company or partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).


 


“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.


 


“Subsidiary” of any Person means any
corporation, partnership, joint venture or other legal entity of which such
Person (either directly or through or together with any other Subsidiary of
such Person), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or similar governing body of such
corporation, partnership, joint venture or other legal entity.


 


“Tax” or “Taxes” means any taxes,
charges, fees, imposts, levies or other assessments, including, without
limitation, all net income, indirect taxes and levies (including, without
limitation, VAT, stamp and withholding taxes), franchise, profits, gross
receipts, capital, sales, use, ad valorem, value added, transfer, transfer
gains, inventory, capital stock, license, withholding, payroll or salary source
tax, employment, social security (or similar), unemployment, excise, severance,
stamp, occupation, real or personal property, premium, windfall profits,
environmental, customs duties, registration, alternative or add-on minimum, and
estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to
tax or additional amounts thereon whether disputed or not, imposed by any
taxing authority (federal, cantonal, communal or foreign) and shall include any
transferee liability in respect of Taxes.


 


“Tax Return” means any returns, forms
declarations, reports, estimates, information returns or statements relating to
Taxes, including any schedule or attachment thereto, and including any
amendment thereof.


 


“Transaction Documents” means this Agreement
and each of the agreements and instruments contemplated hereby or thereby,
including, without limitation, all documents, instruments or agreements attached
to or contemplated by any of the foregoing.


 


33

















 


9.2.                              Arbitration. If a dispute arises between the parties
relating to the interpretation or performance of this Agreement, including the
resolutions of claims provided for in Section 7.3, and with the exception
of any claim for a temporary restraining order or preliminary or permanent
injunctive relief to enjoin any breach or threatened breach hereof, such
dispute shall be settled by arbitration in accordance with the Swiss Rules of
International Arbitration of the Swiss Chambers of Commerce in force on the
date when the notice of arbitration is submitted in accordance with these
Rules. The number of arbitrators shall be three. The seat of the arbitration shall
be in Zurich/Switzerland , and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The
arbitrators must be knowledgeable in the subject matter at issue in the
dispute. The arbitration shall be conducted in English. The arbitrators shall
make his or her decision in accordance with the terms of this Agreement and
Applicable Law. The decision of the arbitrator shall be final and may be
sued on or enforced by the party in whose favor it runs in any court of
competent jurisdiction at the option of the successful party. The rights and
obligations of the parties to arbitrate any dispute relating to the
interpretation or performance of this Agreement shall survive the expiration of
this Agreement for any reason. The arbitrator shall be empowered to award
specific performance, injunctive relief and other equitable remedies as well as
damages, but shall not be empowered to award punitive or exemplary damages.


 


9.3.                              Waivers and Amendments.
Subject to Applicable Law, this
Agreement may be amended, superseded, canceled, renewed or extended, and
the terms hereof may be waived, only by a written instrument signed by the
parties hereto or, in the case of a waiver, by or on behalf of the party
waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or
privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.


 


9.4.                              Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Switzerland (without regard to conflict
of law rules). The application of the Vienna Convention on the International
Sale of Goods dated April 11, 1980, shall be excluded.


 


9.5.                              Notices. Any notices or other communications required
under this Agreement shall be in writing and be effective upon delivery if
given by hand delivery or facsimile transmission or on the next day after given
if delivered by overnight courier, and shall be given at the addresses or
facsimile numbers set forth below, with copies provided as follows:


 


	
  (a)

  	
  if to the Seller:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Cerep S.A.

  
	
   

  	
  155 Boulevard Haussmann

  
	
   

  	
  75008 Paris, France

  
	
   

  	
  Attn: Thierry Jean, Ph.D.

  
	
   

  	
  Fax:                       

  
	
   

  	
   

  



 


34

















 


	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
                              

  
	
   

  	
                              

  
	
   

  	
  Attn:                     

  
	
   

  	
  Fax:                      

  
	
   

  	
   

  
	
  (c)

  	
  if to Purchaser:

  
	
   

  	
   

  
	
   

  	
  Averion International Corp.

  225 Turnpike Road

  Southborough, MA 01772

  Attn: Chief Executive Officer

  Fax: (508) 597-5765

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Foley & Lardner LLP

  402 W. Broadway

  21st Floor

  San Diego, CA 92101

  Attn: Adam Lenain, Esq.

  Fax: (619) 234-3510

  



 


or
at such other place or places or to such other person or persons as shall be
designated in writing by the parties to this Agreement in the manner herein
proved.


 


9.6.                              Section Headings.
The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not in
any way affect the meaning or interpretation of this Agreement.


 


9.7.                              Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which, together, shall constitute one and the same instrument. This Agreement may be
executed via facsimile.


 


9.8.                              Assignments. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the other
parties. Notwithstanding the foregoing, Purchaser may, without consent of any
other party, cause one or more subsidiaries of Purchaser to carry out all or part of
the transactions contemplated hereby; provided, however, that Purchaser shall,
nevertheless, remain liable for all of its obligations, and those of any such
Subsidiary, to Seller hereunder. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by the respective successors and permitted
assigns of the parties hereto. Nothing contained herein shall be deemed to
confer upon any other person any right or remedy under or by reason of this
Agreement.


 


9.9.                              Entire Agreement;
Enforceability. This Agreement and
the Transaction Documents, including the Exhibits and Schedules attached hereto
and thereto:  (i) constitute the
entire agreement among the parties with respect to the Transaction and
supersedes all prior 


 


35

















 


agreements
and understandings, both written and oral, among the parties, with respect to
the subject matter hereof and thereof; and (ii) shall be binding upon, and
are solely for the benefit of each party hereto and nothing in this Agreement
is intended to confer upon any other Person any rights or remedy of any nature
whatsoever hereunder or by reason of this Agreement or any of the Transaction
Documents.


 


9.10.                        Equitable Relief. Seller and Company agree that any breach of Article V
will result in irreparable injury to Purchaser for which a remedy at law would
be inadequate; and that, in addition to any relief at law which may be
available to Purchaser for such breach and regardless of any other provision
contained in this Agreement, Purchaser shall be entitled to injunctive and
other equitable relief as a court may grant. This Section shall not
be construed to limit Purchaser’s right to obtain equitable relief for other
breaches of this Agreement under general equitable standards.


 


9.11.                        Severability. Any term or provision of this Agreement which
is invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without rendering invalid, illegal or unenforceable the
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.


 


[Remainder of Page Intentionally Left Blank]


 


36

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first above written.


 


 


	
   

  	
  AVERION INTERNATIONAL CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip T. Lavin

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Philip T. Lavin

  	
   

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  CEREP S.A.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thierry Jean

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Thierry Jean

  	
   

  
	
   

  	
  Title:

  	
   Chairman & CEO

  	
   

  
									



 


[Signature Page to
Securities Purchase Agreement]


 

















 


EXHIBIT A

PROMISSORY NOTE


 


[See attached]


 


1

















 


EXHIBIT B

FORM NET WORKING CAPITAL CERTIFICATE


 


[See attached]