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Delaware
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56-1668867
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(State or other jurisdiction of
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(IRS Employer
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incorporation)
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Identification No.)
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On July 16, 2009 Encorium Group, Inc. ("Encorium" or the "Company") entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Pierrel Research USA Inc. ("Pierrel"), a wholly-owned subsidiary of Pierrel SpA, an international contract research organization traded on Milano's stock exchange pursuant to which Pierrel purchased the assets of the Company's US line of business on July 16, 2009 (the "Asset Sale"). The purchase price was approximately $2.6 million, comprised of $80,000 in cash paid at closing and the assumption of approximately $2.5 million of liabilities. The foregoing description is qualified in its entirety by reference to the Asset Purchase Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.
Pledge Agreement
Pursuant to the terms of the Asset Purchase Agreement, the Company has agreed to indemnify Pierrel for claims made after closing and for which written notice has been given to Encorium prior to October 31, 2009 relating to, among other things: liabilities retained by Encorium, breaches of the Asset Purchase Agreement by Encorium, and breaches of the representations and warranties made by Encorium. Except in cases of fraud, the cumulative aggregate indemnification obligation of Encorium under the Asset Purchase Agreement is capped at $200,000. To secure the Company's indemnification obligations under the Asset Purchase Agreement, the Company has pledged 649 shares of Common Stock of Encorium Oy, its wholly owned subsidiary (the "Pledged Shares"), pursuant to the terms of the Pledge Agreement between Encorium and Pierrel dated July 16, 2009 (the "Pledge Agreement"). Among other things, the Pledge Agreement provides that if the Pledged Shares are sold by Encorium prior to the termination of the Pledge Agreement, the Company will substitute $200,000 cash collateral for the Pledged Shares.
The foregoing description is qualified in its entirety by reference to the Pledge Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report of Form 8-K and incorporated herein by reference.
Separation and Mutual Release Agreement with Dr. Ginsberg
In connection with the closing of the Asset Sale, the Board of Directors of the Company requested that Dr. Ginsberg resign as Chief Executive Officer of the Company and join Pierrel as its Chief Executive Officer. On July 16, 2009 the Company entered into a Separation and Mutual Release Agreement with Dr. Ginsberg pursuant to which, in connection with Dr. Ginsberg's resignation, and in settlement of any amounts that may otherwise be due pursuant to the Employment Agreement between the Company and Dr. Ginsberg dated December 3, 2008 and the Severance Agreement between the Company and Dr. Ginsberg dated December 3, 2008, the Company has agreed to pay Dr. Ginsberg $250,000, payable in installments. The foregoing description is qualified in its entirety by reference to the Separation and Mutual Release Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report of Form 8-K and incorporated herein by reference.
Eighth Amendment of Lease
In connection with the consummation of the Asset Sale, on July 19, 2009 the Company entered into an Eighth Amendment of Lease (the "Eighth Amendment of Lease") with Glenhardie Partners, LP (the "Landlord") pursuant to which the Landlord has agreed to release the Company from its remaining lease obligations relating to the lease of the Company's U.S. headquarters in Wayne, Pennsylvania for a termination fee of $235,000 and the waiver of any rights to the Company's security deposit of approximately $20,000. The foregoing description is qualified in its entirety by reference to the Eighth Amendment of Lease, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
In connection with the consumation of the Asset Sale, the Company's remaining lease obligations under its lease with Glenhardie Partners, LP for its headquarters located in Wayne, Pennsylvania were terminated. See description of "Eighth Amendment of Lease" in Item 1.01 which is incorporated in this Item 1.02 by reference.
On July 16, 2009 Dr. Ginsberg resigned as Chief Executive Officer of the Company. On July 16, 2009 the Company entered into a Separation and Mutual Release Agreement with Dr. Ginsberg. See description of "Separation and Mutual Release Agreement with Dr. Ginsberg" in Item 1.01 which is incorporated in this Item 5.02 by reference.
Termination of Dr. Linda Nardone, Ph.D., Chief Operating Officer
In connection with closing of the Asset Sale Dr. Linda Nardone's employment with the Company was terminated effective as of July 15, 2009.
2.1 Asset Purchase Agreement between Encorium Group, Inc. and Pierrel Research USA Inc. dated July 16, 2009.
10.1 Pledge Agreeement between Encorium Group, Inc. and Pierrel Research USA Inc. dated July 16, 2009.
10.2 Separation and Mutual Release Agreement between Encorium Group, Inc. and Dr. David Ginsberg dated July 16, 2009.
10.3 Eighth Amendment of Lease by and among Glenhardie Partners, LP, Encorium Group, Inc., and Pierrel Research USA Inc. dated July 16, 2009.
99.1 Press Release dated July 17, 2009.
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Encorium Group, Inc.
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Date: July 22, 2009
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By:
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/s/ Philip L. Calamia
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Philip L. Calamia
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Chief Financial Officer
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Exhibit No.
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Description
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EX-2.1
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Asset Purchase Agreement between Encorium Group, Inc. and Pierrel Research USA Inc. dated July 16, 2009.
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EX-10.1
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Pledge Agreement between Encorium Group, Inc. and Pierrel Research USA Inc. dated July 16, 2009
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EX-10.2
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Separation and Mutual Release Agreement between Encorium Group, Inc. and Dr. David Ginsberg dated July 16, 2009
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EX-10.3
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Eighth Amendment to Lease by and among Glenhardie Partners, LP, Encorium Group, Inc. and Pierrel Research USA Inc. dated July 16, 2009
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EX-99.1
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Press Release dated July 17, 2009
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