Stock Purchase Agreement

15 SEPTEMBER 1994


AKZO NOBEL A.B.


AKZO NOBEL N.V.


CAMBREX CORPORATION


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AGREEMENT
FOR THE SALE AND PURCHASE OF
THE ISSUED QUOTA CAPITAL OF
PROFARMACO NOBEL S.R.L.


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FRESHFIELDS 2
CONTENTS


CLAUSE PAGE - - ------ ---- 1. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Sale and Purchase of the quotas and price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4. Pre-Closing undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 6. Closing accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 7. Post-Closing undertakings and use of the "Nobel" and "Profarmaco" names . . . . . . . . . . . . . . . 18 8. Restrictions on Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 9. Seller's Warranties and Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 10. Limitations on Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 11. Buyer' s and cambrex' rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 12. Buyer's warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 13. Environmental indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 14. Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 15. Pension schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 16. Grossing up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 17. Entire agreement and Deed of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 18. Variation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 19. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 20. Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 21. Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 22. Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 3 23. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 24. Parent company guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 25. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 26. Further assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 27. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 28. Governing law and jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 SCHEDULE 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 SCHEDULE 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
THE WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
PART A : GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
PART B: PROPERTY WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
PART C: ENVIRONMENTAL WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
PART D: TAX WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 SCHEDULE 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
CLOSING ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Closing Accounts Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Provisional Working Capital Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 SCHEDULE 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
31 December 1993 Working Capital Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
(Lira Million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 SCHEDULE 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
DEED OF TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 SCHEDULE 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
THE BANK ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 SCHEDULE 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
CLOSING EXCHANGE RATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 SCHEDULE 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 SCHEDULE 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
KEY EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 4
SALE AND PURCHASE AGREEMENT


THIS AGREEMENT is made on 15 September 1994 between


(1) Akzo Nobel A.B. a corporation organised and existing under the laws of
Sweden having its principal office at Stockholm, Sweden (the SELLER);


(2) Akzo Nobel N.V. a corporation organised and existing under the laws of
the Netherlands, having its principal office at Arnhem, the
Netherlands (AKZO);


(3) Cambrex Corporation, a corporation organised and existing under the
laws of the State of Delaware, having its principal office at One
Meadowlands Plaza, East Rutherford, New Jersey, USA (CAMBREX).


(A) Whereas the Seller will own at Closing the entire corporate capital of Profarmaco Nobel S.r.l. (the COMPANY), a corporation organised and existing under the laws of Italy having its principal office at Milan (Italy), via Cucchiari 17, fiscal code n. 01580770244, V.A.T. number 09745170150 and having a corporate capital of Lire 41,000,000,000 divided into quotas in accordance with Italian law.


(B) Whereas Akzo owns, indirectly, ninety-nine per cent (99%) of the entire corporate capital of the Seller which at the date hereof, owns indirectly, the entire corporate capital of the Company.


(C) Whereas the Seller desires to sell, pro quota, to the Buyer, and the Buyer desires to purchase, all of the issued quota capital of the Company for the consideration and upon the terms set out in this Agreement.


(D) Whereas Akzo further desires to procure the sale to Cambrex and Cambrex desires to purchase, directly or indirectly, all of the issued corporate capital of Nobel Chemicals International A.B. (NOBEL INTERNATIONAL), a corporation organised and existing under the laws of Sweden as well as all of the issued and outstanding capital of Nobel Chemicals GmbH, Nobel Chemicals Limited and Nobel Chemicals Inc. (the SALES COMPANIES).


NOW THEREFORE, in consideration of the promises, and the mutual covenants, agreements, representations and warranties contained in this Agreement, the parties agree as follows:


INTERPRETATION


1.1 In this Agreement, the following expressions shall have the meanings hereby assigned to them:


ACCOUNTS means in relation to any financial year of the Company:


Page No. 1 5 (a) the audited balance sheet of the Company as at the Accounts Date in
respect of that financial year; and


(b) the audited profit and loss account of the Company in respect of that
financial year,


together with any notes, reports or statements included in or annexed to them;


ACCOUNTS DATE means December 31 in any financial year;


ACQUIRED GROUP means those companies to be acquired by Cambrex under the Nobel International Agreement;


APPLICABLE LAWS means the following each as in existence at the date of Closing or as thereafter enacted:


(a) all European Community, national, state or local statutes, codes, or
other laws or legislation concerning Environmental Matters which are
applicable to the businesses of the Company or to any of the
Properties and all rules, regulations, ordinances, orders, notices and
directives made thereunder;


(b) judicial and administrative interpretation of each of the foregoing;


BALANCE SHEET means the management accounts which form the basis of the Last Accounts and which are attached hereto as Schedule 4;


BALANCE SHEET DATE means 31 December 1993;


BANK ACCOUNTS means those bank accounts of the Company details of which are set out in Schedule 6;


BORROWINGS means all borrowings or indebtedness (other than Inter-Group Indebtedness) owed by the Company to any third party under or pursuant to any loan or other financial instrument but excluding any liabilities in respect of trading activities in the ordinary and normal course of business;


BUSINESS DAY means a day (excluding Saturdays) on which banks generally are open in London, New York, Stockholm and Milan for the transaction of normal banking business;


BUYER means Cambrex or (if Cambrex exercises its right under clause 2.6) such Subsidiary of Cambrex as Cambrex shall nominate for the purpose of acquiring the Company and which shall enter into the Deed of Adherence at Closing;


BUYER'S SOLICITORS means Freshfields, 65 Fleet Street, London EC4Y 1HS;


Page No. 2 6 CLAIM means any claim for breach of a Warranty (except for paragraph 2.1 of Part D of Schedule 2) and any claim under any indemnity (except for the Indemnities);


CLOSING means closing of the sale and purchase of the Quotas under this Agreement;


CLOSING ACCOUNTS means the balance sheet of the Company as at Closing, to be prepared in accordance with clause 6 and Schedule 3;


CLOSING CASH means those amounts of cash reflected on the Company's balance sheet in the Closing Accounts and representing cash held within the Bank Accounts adjusted for issued but uncleared cheques and uncleared lodgements;


CLOSING DATE means the date upon which Closing shall occur, such date to be within five (5) Business Days following notification by the Buyer to the Seller of the fulfilment (or waiver) of all the conditions precedent listed in clause 3.1 or such other date no later than December 31, 1994 as the parties may otherwise agree in writing;


CLOSING EXCHANGE RATE means in respect of any exchange rate the rate as determined in accordance with Schedule 7;


CONDITIONS means the conditions precedent and subsequent specified, respectively, in clauses 3.1 and 3.2;


COSTS means liabilities, losses, damages, costs, claims and expenses in each case of any nature whatsoever including any tax liability as defined in the Tax Warranties;


DATA ROOM INDEX means the index of documents which were made available to Cambrex in the data room in Milan, Italy;


DEED OF ADHERENCE means a deed between the Seller, Akzo, Cambrex, the Buyer and the Company providing for the Subsidiary nominated under clause 2.6 to be a party hereto as the Buyer, and for the Company to have the benefit of the matters referred to herein in its favour;


DEED OF TRANSFER means a deed of transfer of the Quotas substantially in the form of the draft attached hereto as Schedule 5;


DIRECTORS means those directors of the Company whose names are set out in Schedule 8 together with, at the option of Cambrex and/or the Buyer, any other director whose name does not appear in either Schedule 1 or Schedule 8;


DISCLOSURE LETTER means the letter in the agreed form from the Seller to the Buyer executed and delivered immediately before the signing of this Agreement;


Page No. 3 7 ENVIRONMENTAL INDEMNITIES means the indemnities set out in clause 13;


ENVIRONMENTAL MATTERS means all matters related to pollution or protection of the environment including noise, emissions, discharges and releases of any substances or energy into air, water (including underground water), sewage systems and land (or any combination of these); the environmental aspects of the manufacture, processing, distribution, use, treatment, storage, disposal, transport and handling of any substances or form of energy; and related matters pertaining to the protection of human health and safety;


ENVIRONMENTAL PERMIT means the permits, consents, licences, certificates and other authorisations and approvals required under the Applicable Laws to be obtained and maintained in connection with the activities carried out on the Properties or in relation to the conduct of the business of the Company;


ENVIRONMENTAL WARRANTIES means the representations and warranties set out in Part C of Schedule 2 (but excluding for the avoidance of doubt, the Environmental Indemnities);


EXISTING CONDITIONS means any and all conditions existing at or relating to the Properties before or at Closing or attributable to:


(a) the ownership, use, handling, control or operation of the Properties
before or at Closing; or


(b) the use of any building, equipment, container or other property from
which any substance was released into the environment at or from the
Properties before or at Closing,


and the term release means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment. The term environment means any of air, water (including underground water), sewage systems and land (or any combination of these);


FINANCIAL YEAR means the period of time from when the company opens to when it closes its yearly financial accounts in accordance with its by-laws and with applicable laws;


INDEMNIFIED PARTY means the Buyer, Cambrex and the Company;


INDEMNITIES means those undertakings, agreements and indemnities set out in clauses 2.1, 4 (other than in respect of those matters set out in clauses 4.1(d) and (e)), 7.1(a), 9.3, 9.9, 9.13, 10.6(a)(i), 10.7(a)(ii) 13.1 and 15.2;


INFORMATION MEMORANDUM means the confidential information relating to the Acquired Group and the Company;


Page No. 4 8 INTELLECTUAL PROPERTY RIGHTS means patents, trade marks, service marks, trade names, design rights, copyright (including rights in computer software), rights in know-how and other intellectual property rights, in each case whether registered or unregistered and including applications for the grant of any such rights and all rights or forms of protection having equivalent or similar effect anywhere in the world;


INTER-GROUP GUARANTEES means all guarantees, indemnities, counter-indemnities and letters of comfort of any nature whatsoever:


(a) given to any third party by the Company in respect of a liability of
any member of the Retained Group; and/or


(b) given to any third party by any member of the Retained Group in
respect of a liability of the Company;


INTER-GROUP INDEBTEDNESS means the aggregate amount outstanding between the Company and members of the Retained Group (other than Inter-Group Trading Indebtedness);


INTER-GROUP TRADING INDEBTEDNESS means the aggregate amount outstanding between the Company and members of the Retained Group in respect of Inter-Group trading activities in the ordinary and usual course of business;


KEY EMPLOYEE means each of those persons whose names are set out in Schedule 9;


LAST ACCOUNTS means, in relation to the Company, its Accounts in respect of its financial year ended on the Last Accounts Date;


LAST ACCOUNTS DATE means December 31, 1993;


NOBEL INTERNATIONAL AGREEMENT means the Sale and Purchase Agreement in relation to the entire corporate capital of Nobel International as well as of the Sales Companies to be executed on even date herewith between the Seller and Akzo on the one hand and Cambrex on the other hand;


PARENT COMPANY means any company which has Subsidiaries and which is not subject to the control of any other companies as this term is defined in section 2359 of the Italian Civil Code;


PENSION WARRANTIES means the representations and warranties set out, inter alia, in paragraph 11 of Part A of Schedule 2;


PROPERTIES means the freehold and leasehold real properties at Paullo, Italy, including buildings, plant and facilities thereon owned and leased by the Company at Closing as set out in the Data Room Index;


Page No. 5 9 PROPERTY WARRANTIES means the representations and warranties set out in Part B of Schedule 2;


PROVISIONAL CLOSING CASH means those amounts of cash reflected on the Company's balance sheet in the accounts prepared pursuant to clause 2.4(a) and representing cash held within the Bank Accounts adjusted for issued but uncleared cheques and uncleared lodgements;


QUOTAS means all the issued and outstanding corporate capital of the Company;


REMEDIAL ACTION PROGRAMME means any clean-up, containment or other programme of remedial action undertaken by the Indemnified Parties at the Properties which is:


(i) legally required by the competent authorities pursuant to and in
accordance with Applicable Laws including, but not limited to, where
such remedial action is required as a term or condition of, or is
carried out as a necessary precondition to the issue of, any
Environmental Permit; or


(ii) necessary in order to avoid, limit, reduce or otherwise mitigate the
risk of incurring Costs which might give rise to a claim or claims
against the Seller under the Environmental Indemnities;


REMEDIAL ACTION PROGRAMME COSTS means those Costs incurred within the period of ten (10) years after the Closing Date or within such longer period as the parties, acting reasonably, may agree, by the Indemnified Parties in carrying out any Remedial Action Programme including both third party costs and, where agreed in advance by the Seller, Costs internal to the Indemnified Parties;


RETAINED GROUP means Akzo, the Seller, any other subsidiary or affiliate of Akzo (but excluding the Company, Nobel International, Nobel Chemicals A.B. and the Sales Companies);


SCHEDULES means Schedules 1 to 9 to this Agreement and SCHEDULE shall be construed accordingly;


SECURITY INTEREST means any security interest of any nature whatsoever including, without limitation, any mortgage, charge, pledge, lien, assignment by way of security or other encumbrance;


SUBSIDIARY has the meaning set out in section 2359 of the Italian Civil Code;


TAX includes (without limitation) corporate income tax (IRPEG), local income tax (ILOR) or property capital gains tax (INVIM), measured by reference to actual or deemed taxable profits (including both income and chargeable gains) made or deemed to be made on or before Closing, and any other direct or indirect taxes, duties or other fiscal impositions of any kind whatsoever chargeable by any tax authority (including Bollo, Registro, Fabbricazione, Stamp


Page No. 6 10 Duties, Consumo, Pubblicita, Affissioni, ICI, ICIAP), however denominated and whether still in force or abolished or amended, including any interest on any such amounts, whether arising under any law of the Republic of Italy or any Regional, Provincial, Municipal or any other local authority, or any law of any other jurisdiction, and whether incurred as principal or tax substitute, and any payment whatsoever which the Company may be or become bound to make to any person as a result of the discharge by that person of any tax which the Company has failed to discharge, together with all penalties and charges relating to any of the foregoing or to any late or incorrect return in respect of any of them, and regardless of whether any such taxes, levies, duties, imposts, charges, withholdings, penalties and are chargeable directly or primarily against or attributable directly or primarily to the Company or any other person and of whether any amount in respect of any of them is recoverable from any other person;


TAX AUTHORITY means any taxing or other authority in any relevant jurisdiction competent to impose any tax liability;


TAX WARRANTIES means the representations and warranties set out in Part D of Schedule 2;


UNCITRAL ARBITRATION RULES means the arbitration rules of the United Nations Commission on International Trade Law adopted by the General Assembly on 15 December 1976 pursuant to Resolution 31/98;


WARBURGS means S.G. Warburg & Co. Ltd. of 2 Finsbury Avenue, London EC2M 2PA;


WARRANTIES means the representations and warranties on the part of the Seller and Akzo set out in Schedule 2;


WORKING CAPITAL IN THE BALANCE SHEET means the amount shown in the Balance Sheet being Italian Lire twenty-three billion six hundred and sixty-seven million (ITL 23,667,000,000);


WORKING CAPITAL IN THE CLOSING ACCOUNTS means the aggregate of the values of all the items shown in the Closing Accounts determined in accordance with clause 6 and Schedule 3.


1.2 In this Agreement, unless the context otherwise requires:


(a) references to PERSONS shall include individuals, bodies corporate
(wherever incorporated), unincorporated associations and partnerships;


(b) the HEADINGS are inserted for convenience only and shall not affect
the construction of this Agreement;


Page No. 7 11 (c) any reference to an ENACTMENT is a reference to it as from time to
time amended, consolidated or re-enacted (with or without
modification) and includes all instruments or orders made under such
enactment;


(d) any statement qualified by the expression TO THE BEST KNOWLEDGE OF THE
SELLER or SO FAR AS THE SELLER IS AWARE shall be deemed to include an
additional statement that it has been made after due and careful
enquiry and shall be deemed to include the knowledge of Akzo, Nobel
Industries Holding B.V., and Trimetal Finance S.A.;


(e) any reference to a document IN AN AGREED FORM is to the form of the
relevant document agreed between the parties hereto and for the
purpose of identification initialled by each of them or on their
behalf (in each case with such amendments as may be agreed by or on
behalf of the Seller and the Buyer);


(f) references to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or
any other legal concept shall, in respect of any jurisdiction other
than England, be deemed to include the legal concept which most nearly
approximates in that jurisdiction to the English legal term.


SALE AND PURCHASE OF THE QUOTAS AND PRICE


2.1 The Seller as legal and beneficial owner agrees to sell, and the Buyer agrees to purchase, all the Quotas with effect from the close of business on the Closing Date. The Quotas shall be sold free from all security interests, options, equities, pledges, rights of usufruct, claims or other third party rights (including rights of pre-emption) of any nature whatsoever, together with all rights attaching to them.


2.2 The total price payable by the Buyer to the Seller for the Quotas shall be the aggregate of:


(a) the amount calculated in accordance with clause 2.3 (which amount
shall be paid by the Buyer at Closing in accordance with clause 5.3)
plus or minus (as the case may be):


(b) the amount (if any) calculated in accordance with clause 6 to take
account of any change in Working Capital between the Balance Sheet
Date, Borrowings as at the Closing Date and Closing Cash (a
provisional amount of which shall be paid by the Buyer to the Seller
at Closing in accordance with clauses 2.4 and 5.3).


Page No. 8 12 2.3 The portion of the purchase price to be paid by the Buyer at Closing pursuant to clause 2.2 (a) shall be calculated on the basis of the following formula:


A = ((83.785 X R + 150.8)/(2X R))


where:


A means the total dollar amount payable by the Buyer to the
Seller, provided that A shall not exceed the sum of eighty
four million, nine hundred and fifty five thousand dollars (US
$ 84,955,000);


R means the US Dollar : Dutch Guilders Closing Exchange Rate.
2.4 The amount of the purchase price to be paid by the Buyer at Closing pursuant to clause 2.2(b) shall be determined as follows:


(a) the Seller shall procure that the Company shall prepare as at the last
day of the month preceding the month in which the Closing Date occurs,
a set of the accounts of the Company in accordance with the provisions
of paragraph of Schedul ...