EXHIBIT 4.40
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30 May 2002
(1) CENES PHARMACEUTICALS PLC
(2) CAMBRIDGE COGNITION GUARANTEE LIMITED
(3) M&R 850 LIMITED
(4) CAMBRIDGE COGNITION LIMITED
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AGREEMENT
for the sale and purchase of shares in
CAMBRIDGE COGNITION LIMITED
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WEIL, GOTSHAL & XXXXXX
One Xxxxx Xxxxx Xxxxxx XX0X 0XX
Tel: x00 (0) 00 0000 0000 Fax: x00 (0) 00 0000 0000
xxx.xxxx.xxx
TABLE OF CONTENTS
Page
1 INTERPRETATION....................................................2
2 SALE AND PURCHASE.................................................7
3 CONSIDERATION.....................................................7
4 CONDITIONS........................................................7
5 COMPLETION........................................................8
6 POST-COMPLETION OBLIGATIONS.......................................9
7 WARRANTIES........................................................9
8 LIMITATIONS ON WARRANTY CLAIMS...................................10
10 ANNOUNCEMENTS....................................................12
11 ASSIGNMENT.......................................................12
12 RIGHTS OF THIRD PARTIES..........................................12
13 VARIATION........................................................13
14 WAIVER...........................................................13
15 ENTIRE AGREEMENT.................................................13
16 COSTS............................................................13
17 COUNTERPARTS.....................................................13
18 NOTICES..........................................................14
19 GOVERNING LAW....................................................15
20 JURISDICTION.....................................................15
SCHEDULE 1 INFORMATION ABOUT THE COMPANY AND MDCL.........................16
Part A The Company........................................................16
Part B MDCL...............................................................17
SCHEDULE 2 DETAILS OF SELLERS AND THEIR SHAREHOLDINGS.....................18
SCHEDULE 3 WARRANTIES.....................................................19
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THIS AGREEMENT is made on 30 May 2002 between the following parties:
(1) CENES PHARMACEUTICALS PLC, a company incorporated in Scotland
(registered number SC166791) whose registered office is at Xxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx XX00 0XX ("CeNeS");
(2) CAMBRIDGE COGNITION GUARANTEE LIMITED, a company incorporated in
England and Wales (registered number 04234029), whose registered office
is at Xxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxx Xxx, Xxxxxx, Xxxxxxxxx XX0
0XX ("CCGL");
(3) M&R 850 LIMITED a company incorporated in England and Wales (registered
number 4338746), whose registered office is at 000 Xxxxx Xxxx,
Xxxxxxxxx XX0 0XX (the "Buyer"); and
(4) CAMBRIDGE COGNITION LIMITED a company incorporated in England and Wales
(registered number 4213437) whose registered office is at Compass
House, Vision Park, Xxxxxxx Way, Histon, Cambridge CB4 9ZR (the
"Company").
RECITALS
(A) The Company was incorporated in England and Wales on 10 May 2001 under
the Companies Acts 1985 and 1989 with registered number 04213437 and is
a private company limited by shares.
(B) On 2 July 2001 the Cognition Business (as defined below) was sold by
CeNeS Limited to the Company under the terms of a business and asset
transfer agreement of the same date (the "Cognition Transfer
Agreement").
(C) On 2 July 2001, the Company purchased the MDC Business from Xx Xxxx
Xxxxxxx and Dr Xxxx Xxxxxxx under the terms of a business and asset
transfer agreement of the same date (the "MDC Transfer Agreement").
(D) The Sellers have agreed to sell and the Buyer has agreed to buy the
Shares (as defined below) for the Consideration (as defined below) and
upon the terms and subject to the conditions set out in this Agreement
(the "Transaction").
IT IS AGREED as follows:
1 INTERPRETATION
1.1 In this Agreement, the following expressions have the following
meanings:
"Business Day" means any day other than a Saturday or Sunday
on which banks are normally open for general
business in London;
"Business Sale" means the sale of the whole or substantially
the whole of the business and assets of the
Company (whether by the Company itself or by
another Buyer's Group Company to whom assets
have been sold or transferred) to a third
party for consideration in excess
of(pound)5,000,000 which shall include any
deferred consideration and any guaranteed
payments or royalties on the sale of products
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or the use of processes by the Buyer;
"Buyer's Group" means the Buyer and any subsidiary or parent
undertaking of the Buyer and any subsidiary of
such parent from time to time;
"Buyer's Group Company" means the Company, its holding company or a
subsidiary of the Buyer or its holding
company;
"Buyer's Solicitors" means Xxxxx & Xxxxx of 000 Xxxxx Xxxx,
Xxxxxxxxx XX0 0XX;
"CANTAB" means the Cambridge Neuropsychological Test
Automated Battery ;
"CANTAB Licence" means the licence to be granted to CeNeS
Limited by the Company in the agreed form in
respect of CANTAB at Completion;
"CeNeS Loan" means the sum of (pound)372,073 as at 30 May
2002 which CeNeS has advanced to the Company
by way of an unsecured inter company loan;
"Claim" means a claim by the Buyer for a breach of
Warranty;
"Cognition Business" means the Cognition business comprising the
manufacture, research, development and sale of
hardware, software, consultancy and other
general services related to cognitive function
carried on by CeNeS Limited on 2 July 2001 and
transferred to the Company pursuant to the
Cognition Transfer Agreement;
"Completion" means completion of the sale and purchase of
the Shares in accordance with Clause 5 of this
Agreement;
"Conditions" means the conditions set out in Clause 4;
"Consideration" means the consideration payable for the Shares
as set out in Clause 3;
"Disclosure Letter" means the letter in an agreed form dated the
date of this Agreement from the Sellers to the
Buyer for the purpose of making disclosures
against the Warranties in accordance with
Clause 7.3;
"Encumbrance" means a mortgage, charge, pledge, lien,
option, restriction, right of set off, right
of first refusal, third party right or
interest or other security interest securing
any obligation of any person or other
arrangement or agreement having similar effect
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in existence prior to the Completion Date;
"Intellectual means the intellectual property owned by,
Property Rights" developed by and/or transferred to the Company
as described in the Cognition Transfer
Agreement and the MDC Transfer Agreement and
shall further include but not be limited to
all patents, trademarks, trade names, services
marks, registered designs, design rights,
copyright, know-how and all other intellectual
property whether or not registered or capable
of registration and applications for the same
and whether subsisting in the United Kingdom
or any other part of the world together with
all or any goodwill relating thereto;
"Listing" means the becoming effective of a listing of
any class of share in the capital of the
Buyer's Group Company on the Official List of
the United Kingdom Listing Authority or the
granting of permission for any of the Buyer's
Group Company's shares to be dealt in on a
Recognised Investment Exchange (as defined in
Section 285 of the Financial Services and
Markets Act 2000) and including, without
limitation, the NASDAQ Europe, the Alternative
Investment Market of the London Stock Exchange
plc, NASDAQ and any other exchange which will
provide an immediate liquid market for shares
in the relevant Buyer's Group Company in all
cases where the market capitalisation of the
Buyer's Group Company on the impact date of
the listing is in excess of(pound)5,000,000;
"MDC Business" means the business operated by Xx Xxxx Xxxxxxx
and Dr Xxxx Xxxxxxx under the name Management
Dynamics Cambridge and transferred to the
Company on 2 July 2001 pursuant to the MDC
Transfer Agreement comprising organisational
psychology consultancy;
"MDCL" means Management Dynamics Cambridge Limited;
"Managers" means Xx Xxxx Xxxxxxx, Dr Xxxx Xxxxxxx, Xxx
Xxxxx and Xxxxxx Xxxxxx;
"Sale" means the sale of the entire issued share
capital of the Buyer or the Company or a
Buyers Group Company to which the business and
assets of the Company has been transferred for
a consideration in excess of(pound)5,000,000,
and including any deferred consideration which
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shall include any guaranteed payments or
royalties on the sale of products or the use
of processes by the buyer however satisfied;
"Sale of a means the sale of an interest in shares (as
Controlling Interest" defined in Schedule 13, Part 1 and Section 324
of the Companies Act 1985) of the Buyer or the
Company or a Buyers Group Company to which the
business and assets of the Company has been
transferred conferring in aggregate 50 per
cent. or more of the total voting rights
conferred by all the issued shares of the
Buyer or the Company or a Buyers Group Company
to which the business and assets of the
Company has been transferred where the
acquisition values the total issued equity of
the Buyer or the Company or a Buyers Group
Company to which the business and assets of
the Company has been transferred as in excess
of (pound)5,000,000;
"Sellers" means CeNeS and CCGL;
"Sellers' Solicitors" means Weil, Gotshal & Xxxxxx of Xxx Xxxxx
Xxxxx, Xxxxxx XX0X 0XX;
"Shares" means the 8,699 of fully-paid ordinary shares
of (pound)1 each of the Company held by CeNeS
and the 1 fully-paid ordinary share of
(pound)1 of the Company held by CCGL,
comprising approximately 87 per cent. of the
allotted and issued share capital of the
Company;
"Tangible Net Asset means the value of the assets of the Company
Value" (other than intangible assets as defined by
FRS 10) shown in the balance sheet of the
Company as at Completion (being the cost of
such assets less aggregate depreciation to
date) together net of the current liabilities
of the Company at the relevant date at cost;
"Tax" or "Taxation" shall have the meaning set out in the Tax
Deed;
"Tax Claim" means any claim by the Buyer against the
Sellers for breach of any of the tax
warranties set out in Schedule 3, Part 2 of
this Agreement or under the Tax Deed;
"Tax Deed" means a deed relating to Taxation made between
the Sellers and the Buyer in the agreed form;
"VAT" means value added tax as provided for in the
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VATA and other tax of a similar nature;
"VATA" means in the UK, the Value Added Tax Xxx 0000
and, in a jurisdiction outside the UK, any
equivalent legislation;
"Warranty" means a statement set out in Schedule 3 and
"Warranties" means all such statements.
1.2 In this Agreement:
1.2.1 a "subsidiary undertaking" or "parent undertaking" is to be
construed in accordance with S258 of the Act and a
"subsidiary" or "holding company" is to be construed in
accordance with S736 of the Act;
1.2.2 references to a "person" include an individual, body corporate
(wherever incorporated), unincorporated association, trust or
partnership (whether or not having separate legal
personality), government, state or agency of a state, or two
or more of the foregoing;
1.2.3 references to a document in the "agreed form" are to that
document in the form agreed to and initialled for the purposes
of identification by or on behalf of the parties;
1.2.4 references to a clause or schedule are to a clause or schedule
of this Agreement, and references to this Agreement include
the schedules and the schedules form part of this Agreement
and will have the same effect as if in the body of this
Agreement;
1.2.5 the headings in this Agreement do not affect its construction
or interpretation;
1.2.6 references to a statute or a statutory provision are to
include references to such statute or provision as amended or
re-enacted whether before or after the date of this Agreement
and include all subordinate legislation made under the
relevant statute whether before or after the date of this
Agreement save where that amendment or re-enactment would
extend or increase the liability on any party under this
Agreement;
1.2.7 a reference to a document is a reference to that document as
amended or modified from time to time in writing by the mutual
consent of the parties;
1.2.8 a person shall be deemed to be connected with another if that
person is connected with another within the meaning of section
839 of the Taxes Act;
1.2.9 the singular includes the plural and vice versa and any gender
includes any other gender;
1.2.10 the "winding-up", "dissolution" or "administration" of a
company or corporation shall be construed so as to include any
equivalent or analogous proceedings under the law of the
jurisdiction in which such company or corporation is
incorporated or any jurisdiction in which such company or
corporation carries on business, including proceedings whereby
liquidation, winding-up, reorganisation, dissolution,
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administration, arrangement, adjustment, protection or
debtor's relief is sought;
1.2.11 All obligations of the Sellers under this Agreement, including
any liability in respect of any Claims or any other breach of
this Agreement, are joint and several.
2 SALE AND PURCHASE
2.1 Each of the Sellers agrees to sell with full title guarantee and free
from any Encumbrance and the Buyer agrees to buy the Shares set
opposite that Sellers name in column 2 of Schedule 2, with all rights
attaching or accruing to the Shares as at or after the date of this
Agreement including all rights to any dividends or other distributions
paid after the execution of this Agreement.
2.2 The Buyer shall not be obliged to purchase any of the Shares unless the
purchase of all the Shares is completed simultaneously.
2.3 Title to, and beneficial ownership of, the Shares shall pass on
Completion.
3 CONSIDERATION
3.1 The consideration for the sale and purchase of the Shares shall be the
sum of(pound)1,000,000 (one million pounds) of which:-
3.1.1 (pound)500,000 (five hundred thousand pounds) shall be due and
payable to the Sellers by telegraphic transfer on the
Completion Date to the account detailed in Clause 5.3.1;
3.1.2 (pound)200,000 (two hundred thousand pounds) shall be due and
payable to the Sellers by telegraphic transfer on the second
anniversary of Completion to the account detailed in Clause
5.3.1 (the "Second Instalment");
3.1.3 (pound)300,000 (three hundred thousand pounds) shall be due
and payable to the Sellers by telegraphic transfer within five
Business Days of the first to occur of the following events to
the account detailed in Clause 5.3.1:
(a) a Sale;
(b) a Sale of a Controlling Interest;
(c) a Business Sale; or
(d) a Listing;
3.2 Notwithstanding Clause 3.1, in the event of a Sale, Business Sale or
the Sale of a Controlling Interest, to the extent that the Second
Instalment has not been made such payment shall be made by the Buyer to
the Sellers within 5 Business Days from the date of such event.
4 CONDITIONS
4.1 Completion is conditional on the following conditions being satisfied
on or before the date set for Completion in Clause 5.1:
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4.1.1 the execution of a subscription agreement between the Buyer
and certain investors to raise (pound)1,565,000 by the issue
of new shares in the capital of the Buyer; and
4.1.2 the execution of a waiver of any right of pre-emption (if
applicable) by the shareholders of the Company (including the
Sellers) in respect of the transfer of the Shares to the
Buyer.
5 COMPLETION
5.1 Subject to satisfaction of the conditions set out in Clause 4
Completion shall take place at the office of the Buyers' Solicitors on
30 May 2002.
5.2 At Completion, the Sellers shall deliver or procure the delivery to the
Buyer or the Buyer's Solicitors of the following:
5.2.1 duly executed transfers of the Shares to the Buyer and the
relevant share certificates;
5.2.2 an executed irrevocable power of attorney in favour of the
Buyer empowering the Buyer to exercise the Sellers' rights as
shareholders of the Company pending stamping and registration
of the transfers referred to in 5.2.1;
5.2.3 resignation letters in the agreed form signed by Xxxx Xxxxx in
respect of the Company and MDCL acknowledging that Xxxx Xxxxx
has no claim against the Company and/or MDCL in respect of
breach of contract, compensation for loss of office,
redundancy or unfair dismissal or on any other grounds
whatsoever;
5.2.4 the Disclosure Letter duly executed by each Seller;
5.2.5 the CANTAB Licence duly executed by CeNeS Limited; and
5.2.6 a counterpart of the Tax Deed duly executed by the Sellers.
5.3 At Completion:
5.3.1 the Buyer shall pay (pound)500,000 (five hundred thousand
pounds) by way of telegraphic transfer of funds to the account
set out below or such other account as the Sellers shall have
specified in writing to the Buyer prior to Completion and
shall provide the Sellers' counterpart of the Tax Deed duly
executed by the Buyer.
Bank: Barclays Bank plc
Address: Broadgate Corporate Banking Centre
155 Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
Account no: 00000000
Sort code: 20-19-90
Account name: Weil, Gotshal & Xxxxxx
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5.3.2 the Buyer shall deliver to CeNeS the CANTAB Licence duly
executed by the Company;
5.3.3 the Seller shall procure that duly convened meetings are held
at which the transfers referred to in Clause 5.2.1 are
approved, subject only to stamping, for registration in the
books of the Company;
5.3.4 all existing instructions to the bankers of the Company are
revoked and new instructions given in such form as the Buyer
directs.
6 POST-COMPLETION OBLIGATIONS
6.1 The Sellers hereby jointly and severally warrant that as at Completion
the Tangible Net Asset Value shall not be less than(pound)205,000.
6.2 Within 14 days of Completion the Buyer shall calculate the Tangible Net
Asset Value and deliver a copy together with the calculations to the
Sellers for the attention of Xxxx Xxxxx. The Sellers shall have 14 days
from delivery of such to agree the Tangible Net Asset Value failing
which an independent accountant shall be appointed by agreement between
the parties and in the absence of agreement by the President for the
time being of the Institute of Chartered Accountants who shall act as
an independent expert and not as arbiter, who shall apply the
accounting principals used by the accountants of CeNeS in preparing the
statutory accounts of CeNeS and whose decision shall be binding on the
parties. The costs of such expert shall follow the determination.
6.3 In the event that the Tangible Net Asset Value shall be less than
(pound)190,000 the Seller shall, unless otherwise agreed between the
parties, repay to the Buyer any difference between the Tangible Net
Asset Value and (pound)190,000 and the Consideration shall be abated
accordingly.
6.4 The Buyer shall, following Completion, provide CeNeS with a copy of the
Buyer's Group monthly management accounts at the end of each financial
quarter, commencing with effect for the period ending 30 June 2002,
until such time as the Consideration has been fully paid.
6.5 With effect from Completion, the Sellers shall release and write off
the CeNeS Loan.
6.6 The Sellers shall, following Completion, give the Buyer access to
information, documents and records as the Buyer may reasonably require
for the purposes only of fulfilling its compliance obligations in
respect of Taxation.
7 WARRANTIES
7.1 The Warranties are given by each of the Sellers as set out in this
Agreement at the date of this Agreement.
7.2 Each of the Sellers warrants to the Buyer that each Warranty is true
and accurate and not misleading at the date of this Agreement and that
the Buyer is entering this Agreement in reliance on each of the
Warranties.
7.3 The Warranties are qualified by matters fairly disclosed in the
Disclosure Letter and for this purpose "fairly disclosed" means
disclosed in such manner as to enable the Buyer to make a fair
assessment of the nature of the matters concerned.
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7.4 Each of the Warranties shall be construed as a separate and independent
warranty and (except where this Agreement provides otherwise) shall not
be limited or restricted in its scope by reference to or inference from
any other term of another Warranty or this Agreement.
7.5 Where a Warranty is qualified by the expression "so far as the Sellers
are aware", or "to the best of the knowledge of the Sellers", or any
similar expression, the awareness of the Sellers is limited to the
knowledge of the Sellers having made reasonable enquiries only of the
Managers, Xxxx Xxxxx and the Company's audit partner of Xxxxxx Xxxxxxxx
at the date hereof.
7.6 Each of the Sellers agrees with the Buyer:
7.6.1 to waive any right or claim which he may have against the
Company and/or any of its directors, employees agents or
advisers for any error, omission or misrepresentation in any
such information or opinion; and;
7.6.2 that any such right or claim shall not constitute a defence to
any claim by the Buyer under or in relation to this Agreement
(including the Warranties).
8 LIMITATIONS ON WARRANTY CLAIMS
8.1 Subject to Clause 8.2 the aggregate liability of the Sellers for all
Claims and Tax Claims shall not exceed (pound)1,000,000.
8.2 The Sellers liability for all Claims and Tax Claims may not exceed the
amount actually received from the Buyer pursuant to Clause 3. In the
event that a Claim or Tax Claim for which the Sellers are liable under
the terms of this Agreement exceeds the consideration received under
and pursuant to Clause 3 (the "Excess") to the extent that further
payments become due to the Sellers, the Buyer may offset the Excess
against the payment of the sum due. In the event that the condition for
the payment of a sum under Clause 3 is not satisfied and there is an
Excess the Buyer will have no right to claim the Excess from the
Sellers.
8.3 The Sellers shall not be liable for any Claim or Tax Claim:
8.3.1 unless the aggregate amount of any Claim or Tax Claim shall
exceed (pound)50,000 (in which case the Buyer shall be
entitled to claim the whole of such sum and not merely the
excess);
8.3.2 unless the amount of any individual Claim or Tax Claim,
described in Clause 8.3.1, together with all such other claims
exceeds (pound)10,000. For the avoidance of doubt, amounts for
which the Sellers have no liability as a consequence of the
operation of this Clause, shall not be capable of constituting
a Claim or Tax Claim or increasing the amount of such Claim or
Tax Claim for the purpose of this Clause;
8.3.3 unless the Buyer notifies the Sellers in writing in reasonable
detail of the Claim or Tax Claim on or before the expiry of 24
months from Completion and 6 years from Completion in the case
of a Tax Claim.
8.3.4 which is not satisfied, settled or withdrawn within 6 months
of the date of notification of such Claim or Tax Claim under
paragraph 8.2.3 unless proceedings in respect of it have been
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commenced by being both issued and served on the Buyers or
formal alternative dispute resolution procedures have been
commenced with the Buyers. Time shall be of the essence for
this purpose.
8.4 The amount of the liability for each of the Sellers in respect of any
Claim or Tax Claim shall not exceed such proportion of the amount of
the Claim or Tax Claim as the consideration receivable by each under
this Agreement bears to the total amount of the consideration
receivable by all of the Sellers under this Agreement.
8.5 The limitations set out and referred to in Clauses 8.1, 8.2 and 8.3 do
not apply to a breach of any Warranty resulting from fraud or in
respect of a Warranty, set out in paragraph 1 of Schedule 3.
8.6 If the Buyer becomes aware of a matter which is likely to give rise to
a Claim or Tax Claim or of any claim, action or demand against it or
matter likely to give rise to any of these which may result in a Claim
(a "Third Party Claim"), the Buyer shall:
8.6.1 as soon as reasonably practicable thereafter give notice
thereof in writing to the Sellers, stating in reasonable
detail the nature of the matter on a without prejudice basis,
if practicable, the amount claimed, and the provisions of this
Agreement which the Buyer alleges have been or may have been
breached;
8.6.2 make available to accountants and other professional advisers
appointed by the Sellers such access to the personnel of the
Company and to any relevant records and information as the
Sellers reasonably request in connection with such Claim or
Tax Claim or Third Party Claim; and
8.6.3 use its reasonable endeavours to procure that the auditors
(both past and then current) of the Company make available
their audit working papers in respect of audits of the
Company's accounts for any relevant accounting period in
connection with such Claim or Tax Claim or Third Party.
8.7 If the Buyer becomes aware of a Third Party Claim of which notice has
been or may be given by the Buyer under Clause 8.6.1, the Buyer shall,
subject to being indemnified by the Sellers against all reasonable
costs and liabilities incurred in doing so:
8.7.1 take or procure such action to be taken as the Sellers shall
reasonably request (having regard in particular to the Buyer's
continuing business) to avoid, dispute, resist, appeal,
compromise or defend such Third Party Claim or any
adjudication in respect of a Third Party Claim;
8.7.2 if so requested by the Sellers maintain consultation with the
Sellers on all aspects of any proceedings in defence of a
Third Party Claim;
8.7.3 not admit liability in respect of a Third Party Claim, nor
compromise, nor settle any proceedings in defence of a Third
Party Claim, without the written consent of the Sellers (such
consent not to be unreasonably withheld or delayed);
8.7.4 if so required by the Sellers in writing, ensure (or, as
appropriate, shall co-operate to procure that the Company
shall ensure), at the request in writing of the Sellers, that
the Sellers are placed in a position to take on or take over
the conduct of all proceedings and/or negotiations of
whatsoever nature arising in connection with the Third Party
11
Claim in question and provide (or, as appropriate, co-operate
to procure that the Company provides) such information and
assistance as the Sellers may reasonably require in connection
with the preparation for and conduct of such proceedings
and/or negotiations provided that the Sellers shall, if
requested, by the Buyer:
(a) maintain consultation with the Buyer on all aspects
of any proceedings in defence of a Third Party Claim
and take into account all reasonable requests of the
Buyer in relation to the conduct of such Third Party
Claim;
(b) not admit liability in respect of a Third Party Claim
nor compromise nor settle any proceedings in defence
of a Third Party Claim without the prior written
consent of the Buyer (such consent not to be
unreasonably withheld or delayed).
8.8 The Buyer is not entitled to recover more than once in respect of any
one matter giving rise to a Claim or a Tax Claim whether pursuant to
this Agreement or otherwise. For the avoidance of doubt the Sellers
shall not be liable under this Agreement in respect of any Claim if any
adjustment is made to the Consideration pursuant to Clause 6 in respect
of the matter or thing giving rise to the Claim.
9 RESTRICTIVE COVENANTS
9.1 Each of the Sellers hereby undertakes with each of the Company and the
Buyer that neither it nor any of its subsidiary undertakings nor its
parent undertaking shall for the duration of this Agreement and for a
period of 12 months following termination or expiry of this Agreement
for any reason whatsoever carry on or be engaged or interested in or in
any way assist in the research, development or the supply of goods or
services which is similar to or which conflicts or competes with
research and development work or the supply of goods or services
relating to the Cognition Business or any other business of the Company
conducted during such period provided that this shall not prohibit the
holding (directly or through nominees) of investments listed on the
London Stock Exchange plc or any recognised investment exchange as long
as not more than 5 per cent. of the issued shares or other securities
of any class of any one company shall be so held.
9.2 Each of the Sellers hereby undertakes with each of the Company and the
Buyer that it shall not at any time during this Agreement and for a
period of 12 months following termination or expiry of this Agreement
for any reason whatsoever either solely or jointly with or as agent for
any person, directly or indirectly canvass or solicit for employment or
employ any person who is, or has at any time whilst the Sellers have
held shares in the Company, been an employee of the Company or
endeavour to induce any such person to cease being an employee of the
Company.
9.3 Each undertaking contained in this clause 9 shall be construed
independently so that if one or more should be held to be invalid to
any extent as an unreasonable restraint of trade or for any other
reason then it shall be valid to the extent that it is not held to be
so invalid and the rest shall remain unaffected and shall apply with
such modifications as may be necessary to make the rest valid and
effective.
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10 ANNOUNCEMENTS
10.1 Subject to Clause 10.2, no announcement or public statement concerning
the existence, subject matter or any term of this Agreement shall be
made by or on behalf of any party without the prior written approval of
the other such approval not to be unreasonably withheld or delayed.
10.2 This Clause shall not apply to any announcement or public statement by
any party required by law, or the rules of any regulatory or
governmental body to which such party is subject, including the rules
of a recognised investment exchange (as defined in the Financial
Services and Markets Act 2000) any stock exchange on which any
securities of the relevant party are listed, in which case the party
concerned shall make all reasonable attempts to agree the contents of
such announcement or statement with the other party before it is made.
11 ASSIGNMENT
Neither party shall be entitled to assign or transfer all or any of its
rights, benefits or obligations under this Agreement without the prior
written consent of the other party.
12 RIGHTS OF THIRD PARTIES
12.1 A person who is not a party to this Agreement has no rights under the
Contracts (Rights of Third Parties) Xxx 0000 or otherwise to enforce
any term of this Agreement but this does not affect any right or remedy
of a third party which exists or is available apart from the Act.
13 VARIATION
Any variation of this Agreement must be in writing and signed by each
party or, in the case of a body corporate, a duly authorised officer or
representative of such party.
14 WAIVER
A delay in exercising, or failure to exercise, any right or remedy
under this Agreement does not constitute a waiver of such right or
remedy or other rights or remedies nor shall either operate so as to
bar the exercise or enforcement thereof.
15 ENTIRE AGREEMENT
15.1 Each party acknowledges and agrees that:
15.1.1 this Agreement constitutes the whole and only agreement and
understanding between the parties in connection with the sale
of the Shares;
15.1.2 it has not entered into the Agreement or any of them in
reliance on any pre-contractual statement which is not
expressly set out in this Agreement and, to the extent any
pre-contractual statement was made or given and is not
expressly set out in this Agreement, it irrevocably and
unconditionally waives any claims, rights or remedies which it
may otherwise have in relation to any such pre-contractual
statement; and
15.1.3 the only rights and remedies available to it in connection
with the Agreement is damages for breach of contract and, for
the avoidance of doubt, no party has any right to rescind
13
(except in the case of fraud) or terminate the Agreement for
breach of contract or for negligent or innocent
misrepresentation or otherwise except as provided in this
Agreement,
provided always that this clause 15.1 shall not exclude or limit any
liability or any right which any party may have in respect of
pre-contractual statements made or given fraudulently or dishonestly in
circumstances where there has been wilful concealment.
16 COSTS
Save as otherwise expressly stated in this Agreement, each party shall
pay its own costs in connection with the negotiation, preparation and
implementation of this Agreement and all agreements ancillary to it.
17 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered constitutes an original of this
Agreement, but all the counterparts shall together constitute one and
the same agreement. No counterpart shall be effective until each party
has executed at least one counterpart.
18 NOTICES
18.1 A notice or other communication given under this Agreement shall be in
writing and shall be served by delivering it to the party due to
receive it at the address set out in this Clause 18 and shall be deemed
to have been delivered in accordance with this Clause 18.
18.2 The parties' addresses and fax numbers for the purposes of this
Agreement are:
M&R 850 Limited
000 Xxxxx Xxxx
Xxxxxxxxx XX0 0XX
For the attention of : Hew Xxxxx
Fax number: 00000 000000
CeNeS Pharmaceuticals Plc
Compass House
Vision Park
Xxxxxxx Xxx
Xxxxxx
Xxxxxxxxx
XX0 0XX
For the attention of : Xxxx Xxxxx
Fax number: 00000 000000
Cambridge Cognition Guarantee Limited
Compass House
Vision Park
Xxxxxxx Xxx
Xxxxxx
Xxxxxxxxx
XX0 0XX
Fax number: 00000 000000
14
Cambridge Cognition Limited
Compass House
Vision Park
Xxxxxxx Xxx
Xxxxxx
Xxxxxxxxx
XX0 0XX
Fax number: 00000 000000
or such other address or fax number as the relevant party notifies to
the other parties, which change of address shall only take effect if
delivered and received in accordance with this Clause.
18.3 A notice so addressed shall be deemed to have been received:
18.3.1 if personally delivered, at the time delivery;
18.3.2 if sent by pre-paid first class post, recorded delivery or
registered post, two Business Days after the date of posting
to the relevant address;
18.3.3 if sent by registered air-mail, five Business Days after the
date of posting to the relevant address; and
18.3.4 if sent by fax, on successful completion of its transmission
as per a transmission report from the machine from which the
fax was sent, save that if such notice of communication is
received after the end of normal working hours (and "normal
working hours" shall be deemed to be 8.30 am to 5.30 pm on any
Business Day in the country of the recipient), such notice or
communication shall be deemed to have been received on the
next Business Day.
18.4 For the avoidance of doubt, notice given under this Agreement shall not
be validly served if sent by electronic mail.
19 GOVERNING LAW
This Agreement is governed by, and shall be construed in accordance
with, English law.
20 JURISDICTION
Each party irrevocably agrees that the courts of England have exclusive
jurisdiction to decide and to settle any dispute or claim arising out
of or in connection with this Agreement ("Proceedings").
15
SCHEDULE 1
INFORMATION ABOUT THE COMPANY AND MDCL
Part A
The Company
1 Registered number: 04213437
2 Date of incorporation: 10/05/01
3 Place of incorporation: United Kingdom
4 Registered office address: Compass House, Vision Park, Xxxxxxx Xxx, Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxxx XX0 0XX
5 Type of company: Private Limited Company
6 Authorised share capital:
(a) amount: (pound)10,000
(b) number and class of shares: 10,000 ordinary shares
7 Issued share capital:
(a) amount: (pound)10,000
(b) number and class of shares: 10,000 ordinary shares
8 Directors: Xxxx Xxxxx, Dr. Xxxx Xxxxxxx, Xx. Xxxx Xxxxxxx, Xxx
Xxxxx, Xxxxxx Xxxxxx
9 Secretary: Xxx Xxxxx
10 Accounting reference date: 31 December
11 Auditors: Xxxxxx Xxxxxxxx
12 Outstanding Charges: None
16
Part B
MDCL
Management Dynamics Cambridge Limited
1 Registered number: 02853619
2 Date of incorporation: 15 September 1993
3 Place of incorporation: United Kingdom
4 Registered office address: Compass House, Vision Park, Xxxxxxx Xxx, Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxxx XX0 0XX
5 Type of company: Private Limited Company
6 Authorised share capital:
(a) amount: (pound)1,000
(b) number and class of shares: 1,000 Ordinary shares of(pound)1 each
7 Issued share capital:
(a) amount: (pound)2
(b) number and class of shares: 2 Ordinary shares of(pound)1 each
8 Percentage owned by Company 100%
9 Directors: Xxxx Xxxxx, Xx. Xxxxxx Xxxxxxx
10 Secretary: Xxxx Xxxxx
11 Accounting reference date: 31 December
12 Outstanding Charges: None
17
SCHEDULE 2
DETAILS OF SELLERS AND THEIR SHAREHOLDINGS
============================================================ ============================================
1 2
Name of Seller Number of Shares legally and beneficially
at date of this Agreement
============================================================ ============================================
CeNeS Pharmaceuticals PLC 8699
------------------------------------------------------------ --------------------------------------------
Cambridge Cognition Guarantee Limited 1
============================================================ ============================================
18
SCHEDULE 3
WARRANTIES
Part 1
1 Each of the Sellers is the sole legal and beneficial owner of the
Shares set out opposite his name in Schedule 2 and such Shares are
owned free of Encumbrances.
2 Each of the Shares have been properly issued and allotted and are fully
paid or credited as fully paid and the Sellers have at all times prior
to Completion had the share certificates for the Shares in their
possession or control.
3 No Agreement or arrangement has been entered into which requires or may
require the Company to allot, issue or transfer or to grant any person
the right (whether conditional or otherwise) to call for the allotment,
issue or transfer of any share or loan capital.
4 Each of the Sellers have full power and authority without requiring the
consent of any other person, and has taken all necessary corporate or
other actions, to enter into and exercise its rights and perform its
obligations under this Agreement and all other documents to be
exercised by it at Completion.
5 All information set out in this Agreement (including annexures) is
true, accurate and not misleading in any material respect.
6 So far as the Sellers are aware, since 2 July 2001 ("Accounts Date")
the Cognition Business has been carried on in the ordinary and usual
course, without interruption or alteration in nature, scope or manner
so as to maintain it as a going concern and so far as the Sellers are
aware there has been no material adverse change in the turnover or
financial position of the Cognition Business and, so far as the Sellers
are aware there are no factors likely to have such an effect specific
to the Cognition Business and not affecting similar businesses.
7 The Company has at all times carried on its business and affairs in all
respects in accordance with its memorandum and articles of association.
8 All returns, resolutions and other documents required to be filed with
or delivered to the Registrar of Companies in respect of the Company
have been properly filed or delivered.
9 The accounting records of the Company have been properly written up on
a consistent basis and the Company has complied with the obligations
under section 221 of the Companies Xxx 0000. All relevant financial
books and records of the Company are in its possession or otherwise
under its direct control and are up to date.
10 As far as the Sellers are aware, the Company has not entered into a
material, unusual or long term contract in connection with the
Cognition Business.
11 As far as the Sellers are aware, the Company has obtained all material
licences, permissions and consents and other approvals necessary to
carry on the Cognition Business, all such licences and consents are
valid and in full force and effect and not limited in duration so far
as the Sellers are aware no event has occurred and there has been no
omission which shall or is reasonably likely to prejudice any such
licences, permissions, consents or other approvals remaining in full
force and effect.
19
12 So far as the Sellers are aware the Company owns or has and will
following Completion have, the right to use all assets and rights that
it needs to carry on the Cognition Business as carried on immediately
prior to Completion.
13 So far as the Sellers are aware no circumstances exist which constitute
a ground on which any material contract to which the Company is a party
could be avoided, repudiated, rescinded, prematurely determined or
declared to be invalid and so far as the Sellers are aware the Company
has not received any notice of a claim to that effect or notice
indicating that such a claim is foreseeable.
14 As far as the Sellers are aware, no mortgages, charges, liens,
encumbrances or other security interests subsist over assets used in
the Cognition Business save for charges and liens arising in the
ordinary course of business.
15 So far as the Sellers are aware, no steps been taken or legal
proceedings been started or threatened against the Company, as the case
may be, for winding up, dissolution or reorganisation or for the
appointment of a receiver or administrative receiver or any
administrator, trustee or similar officer of its assets or revenues and
no meeting has been convened for the purpose of winding up the Company
and so far as the Sellers are aware (without making any enquiry of a
third party) the Company has not been a party to any transaction which
could be avoided in a winding up.
16 So far as the Sellers are aware (without making any enquiry of a third
party), the Company has not been party to any transactions at an
undervalue for the purposes of Section 238 of the Insolvency Xxx 0000
nor has it given or received any preference for the purposes of Section
239 of the Insolvency Xxx 0000 in either case since the Company's
incorporation.
17 None of the Sellers is unable to pay its debts as defined in section
123 of the Insolvency Xxx 0000 or is the subject of any order for the
winding up, dissolution or re-organisation or the appointment of a
receiver or administrative receiver.
18 So far as the Sellers are aware, the Cognition Business has been
conducted in accordance with applicable law or regulation, so far as
each Seller is aware the Cognition Business is not in breach of any
such law or regulation and so far as the Sellers are aware compliance
has been made with all legal and procedural requirements necessary for
the Company to undertake the Cognition Business.
19 As far as the Sellers are aware, the Company has maintained up-to-date,
adequate and suitable records regarding the service and terms and
conditions of employment, payments of statutory or other sick pay,
statutory or other maternity pay, disciplinary and health and safety
matters, income tax and social security contributions and termination
of employment of each of the Company's employees.
20 So far as the Sellers are aware the Company has not offered to employ
or engage any person where such employment or engagement will take
effect after Completion or made, agreed or proposed or entered into
negotiation or received any request for any change in the terms of
employment by the Company of any employee where such change is due or
expected within six months from the date of this Agreement.
21 As far as the Sellers are aware, no employee has given notice or is
under notice to terminate his employment.
20
22 The Sellers are not aware of any outstanding claims by any person who
is now or has been an employee of the Cognition Business or any dispute
between the Company and any employee or a material number or class of
the employees of the Cognition Business and no payments are due by the
Company under the provisions of the Employment Rights Xxx 0000, the
Equal Pay Xxx 0000, the Sex Discrimination Xxx 0000 and the Race
Relations Xxx 0000, the Disability Discrimination Xxx 0000 and the
Trade Union and Labour Relations (Consolidation) Xxx 0000 and so far as
the Sellers are aware there are no circumstances likely to give rise to
any such dispute.
23 As far as the Sellers are aware the Company has not entered into any
recognition agreement with a trade union nor has it done any act which
might be construed as recognition.
24 So far as the Sellers are aware, no gratuitous payment has been made or
promised by the Company in connection with the actual or proposed
termination, breach, suspension or variation of any employment or
engagement of any present or former director, officer or employee of or
consultant to the Company.
25 As far as the Sellers are aware, the Company is the sole beneficial
owner of the Intellectual Property Rights and (where such property is
registered) is the registered proprietor thereof free from and clear of
any restriction of use or Encumbrance and so far as the Sellers are
aware, the Company has not disclosed (except in the ordinary course of
its business and on the basis that such disclosure is to be treated as
being confidential in nature) any of the know-how nor any trade secrets
or list of customers relating to the Cognition Business to any other
person firm company or organisation.
26 As far as the Sellers are aware, the Company owns or has the right to
use the copyright in the designs of all the brochures, literature and
marketing material of the Cognition Business which were transferred
under the Cognition Transfer Agreement and as far as the Sellers are
aware, none of the said brochures, literature and marketing material or
any of the Intellectual Property Rights infringes any intellectual
property rights of any other person firm or company or involves the
unauthorised use of confidential information disclosed to the Company
by any person firm company or organisation.
27 As far as the Sellers are aware, no third party has any right over or
right to remuneration derived from the commercial exploitation of any
of the Cognition Intellectual Property Rights.
28 Except in the ordinary and usual course and save as set out in the
Disclosure Letter, the Company has not granted and is not obliged to
grant any licences under any Intellectual Property Rights owned by it
or licensed to it.
29 All application, renewal and other official statutory and regulatory
fees relating to the administration of the Intellectual Property Rights
or for the protection and enforcement thereof have been duly paid and
so far as the Sellers are aware all reasonable steps have been taken
for their maintenance and protection.
30 Save as set out in the Disclosure Letter, the fixed and loose plant,
machinery, furniture, fixtures, fittings, equipment, vehicles and all
other assets used in relation to the Cognition Business of the Company
are the property of the Company free from any hire or hire-purchase
agreement or agreement for payment on deferred terms or xxxx of sale or
any Encumbrance, and have at all material times been and are in the
possession of or under the control of the Company in the UK.
21
31 All plant, machinery vehicles and equipment owned or used by the
Company is in good repair and condition (fair wear and tear excepted)
and in working order, has been properly serviced and maintained on a
regular basis and complies with appropriate safety regulations.
32 As far as the Sellers are aware, the Company has effected all
insurances required by law to be effected by it and all premiums due on
the policies in respect of such insurance cover ("the Policies") have
been paid; so far as the Sellers are aware, all other conditions of the
Policies have been performed and observed; so far as the Sellers are
aware none of the Policies has or will be void or voidable as a result
of an act or omission of the Company and so far as the Sellers are
aware all Policies will continue in full force and effect
notwithstanding Completion.
33 Neither of the Sellers is aware of any circumstances which would
entitle the Company to make a claim under any of the Policies or which
would be required under any of the Policies to be notified to the
insurers.
34 So far as the Sellers are aware, the Company has not committed any
material breach of any agreement to which it is a party which, and no
party with whom the Company has entered into any agreement is in
default thereunder being a default which, would have an adverse effect
on its financial or trading position.
35 So far as the Sellers are aware, there is no liability in respect of
any claim against the Company arising out of any defect in design,
material or workmanship of any goods supplied by the Company before
Completion or out of any error or omission on the part of the Company
in the supply of any service.
36 Apart from the collection of debts in the ordinary course of the
business neither the Company nor any person for whose acts the Company
may be contractually or vicariously liable is engaged in any capacity
in any litigation, arbitration, prosecution or other legal proceedings
or in any proceedings or hearings before any statutory or Governmental
body, department, board or agency; so far as the Sellers are aware no
such matters are pending or threatened; and the Sellers are not aware
of any circumstances which are likely to give rise to any such matter.
37 So far as the Sellers are aware, there are no overdraft, loan and other
financial and leasing facilities available to the Company and so far as
the Sellers are aware, there is no other indebtedness of the Company
excluding trade creditors.
38 Complete and accurate copies of all licences, escrow agreements and
(where the warranties have not expired) development agreements in
respect of all computer software used or held by the Company have been
provided or are held by the Buyer. So far as the Sellers are aware, the
licences of such computer software are complied with in all material
respects in the operation of the business of the Company.
39 So far as the Sellers are aware, there are adequate maintenance
provisions in place in relation to the Company's computer systems and
the maintenance providers concerned have always fulfilled their
obligations under those agreements in accordance with their terms (and
those terms provide for the software concerned to be updated free of
charge and for errors to be corrected).
40 So far as the Sellers are aware, the Company has a prudent disaster
recovery plan in respect of its computer systems which would permit all
of the Company's critical functions which are run on the computer
22
systems to be restored within 24 hours, the balance of functions being
restored within 48 hours.
41 So far as the Sellers are aware, all necessary back-up systems are
utilised to ensure that in the event of any fault in any computer
system used by the Company, no more than one day's data might be lost.
42 So far as the Sellers are aware, the Company has prudent procedures in
place to ensure the security of its computer systems and the data
stored on them.
23
Part 2
43 As far as the Sellers are aware, all notices, returns, computations and
payments which should have been made by the Company for any Taxation
purpose have been made within the requisite time-periods and are
up-to-date, correct and on a proper basis.
44 As far as the Sellers are aware, the Company is not and does not expect
to be involved in any dispute with the Inland Revenue or HM Customs &
Excise concerning any matter likely to affect in any way the liability
of the Company to Taxation, and so far as the Sellers are aware there
are no circumstances which are likely to give rise to any such dispute
for the next twelve months.
45 The Company has not entered into any non-arm's length transaction with
any shareholder, employee or officer of the Company, present or former,
or any Company in the same group of companies as the Company for the
purposes of any form of Taxation.
46 The Company has as far as the Sellers are aware, complied fully with
all its obligations under the PAYE system and relating to National
Insurance Contributions in respect of all its present and former
employees and officers.
47 The Company has not entered into or been party to any scheme or
arrangement designed wholly or mainly for the purpose of avoiding or
deferring taxation.
48 The Company:
48.1 is duly registered and is a taxable person for the purposes of VAT and
has complied with all statutory requirements relating to VAT;
48.2 is not in arrears with any payment or returns under legislation
relating to VAT;
48.3 has fully maintained complete correct and up to date records, invoices
and other necessary documents;
48.4 has not been required by HM Customs & Excise to give any security;
48.5 is not and has never been or agreed to be an agent or manager or factor
or representative for the purposes of section 47 or 48 VATA; and
48.6 has not been a party to any transaction to which paragraph 1 of
Schedule 6 VATA applies.
49 Neither CeNeS nor the Company has been a relevant company in relation
to an exempt distribution for the purposes of section 213 ICTA 1988.
50 The Company has sufficient records relating to past events to calculate
its liability in respect of any form of taxation or relief which would
arise on any disposal or on the realisation of any of its assets.
51 The Company will not incur any liability to taxation under Section 190
of the Taxation of Chargeable Gains Xxx 0000 (tax on one member of a
group recoverable from another member) by reason of any unsatisfied
corporation tax liability of any other company.
52 The Company is not under any obligation to make at any time any
payments of interest or any annual payments for which no relief will be
received (whether as a deduction or charge on income) by reason of
24
Sections 125 (annual payments for non-taxable consideration) or 787
(restriction of relief for payment of interest) of the Taxes Xxx 0000
or by reason of its being a distribution].
53 The Company has not since its incorporation been a party to any
transaction in respect of which the Company, its officer directors or
advisers considered that there was a risk that the Company could be
liable to Taxation under the provisions of Part XVII of the Taxes Act
1988 (Anti-Avoidance) or as a result of the principles enunciated by
the House of Lords in Xxxxxxx v Xxxxxx 55 TC 324.
54 As far as the Sellers are aware, all documents which are liable to
stamp duty and which confer any right upon the Company have been duly
stamped and no document which confers any right upon the Company and
which is outside the UK would attract duty if it were brought into the
UK.
25
EXECUTED by the parties:
Signed by )
for and on behalf of )
CENES PHARMACEUTICALS PLC )
/s/ Xxxx Xxxxx
________________________ Signature
Signed by )
for and on behalf of )
CAMBRIDGE COGNITION )
GUARANTEE LIMITED )
/s/ Xxxx Xxxxx
________________________ Signature
Signed by )
for and on behalf of )
M&R 850 LIMITED )
/s/ X.X. Xxxxx
________________________ Signature
Signed by )
for and on behalf of )
CAMBRIDGE COGNITION LIMITED )
/s/ Xxxx Xxxxx
________________________ Signature
26
